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Copyright, 1907, by 

George W. Jacobs & Company 

Published October^ igo^ 


Few introductory explanations and no excuses are 
required for a biography of Jay Cooke. Soon after 
the death of the great financier in February, 1905, the 
letters and papers which he had so carefully and method- 
ically preserved for some future compiler of the records 
of his life, were placed in my hands by his children, — 
Jay Cooke, Jr., Mrs. Charles D. Barney, Mrs. John M. 
^utler, and Rev. Henry E. Cooke. I have tried to be a 
reverent custodian of them. They filled several old 
wooden chests at "Eildon," the home of his daughter, 
Mrs. Barney, near Philadelphia, where he had so long 
resided in his last years, after the snows had fallen 
upon his hair and beard and he was at leisure to pon- 
der the world and its affairs, and to await the sum- 
mons to another world into which he always looked so 
confidently. Indeed, much of my work was done in the 
large room which he occupied and in which he died. 
Still more chests were found in the basement of the 
Philadelphia banking house of Charles D. Barney and 
Company, where Mr. Cooke had had a desk for many 
years. These rich sources of material have been sup- 
plemented by the Records of the Treasury Department 
at Washington; the large and valuable collection of 
Chase letters, recently acquired by the Historical Society 
of Pennsylvania ; many letters to his brother, Henry D. 

Cooke, kindly supplied by the latter's daughter, Mrs. 





Kate Moorhead Cooke Magruder, of Washington, D. C. ; 
and a number of letters of much earlier dates lent 
me by Pitt Cooke's daughter, Mrs. T. Morrison Sloane, 
of Sandusky, O. Besides this, it is a pleasure to make 
my acknowledgments to General A. B. Nettleton, of 
Chicago, who was so closely associated with Mr. 
Cooke's operations during the time he was construct- 
ing the Northern Pacific Railroad and who has most 
liberally aided and encouraged me; and to Stephen W. 
White of Philadelphia for a while the financier's private 

But the greatest debt of gratitude I owe, of course, 
to Mr. Cooke's children and more particularly to Mr. 
and Mrs. Barney, whose devotion to the undertaking 
has known no alloy at any time. Their generosity and 
goodness on every occasion in putting material at my 
disposal, in advising and coimselling me as to facts and 
judgments, and in pleasant words and kindly acts of 
many sorts as the work progressed can only be hinted 
at, not fully expressed, on a public page. I am also 
under obligations to J. Horace Harding, of New York, 
for assistance and advice. 

It will be well to state in this place that I came to 
the subject with much less knowledge of Mr. Cooke 
than many others would have had. Nothing I have 
set down therefore can be ascribed to olden sympathies 
or predilections. Moreover, in the preparation of the 
work I have been under no restrictions of any kind ex- 
cept my own sense of what was right and true, and 
whether I have judged well or ill is a matter I must 
now leave to public determination. There was nothing 
to conceal in a life of this sort and there have been 


no concealments. It was lived without guile and this 
is the record of it, put down plainly after a study of 
the ample evidence. 

Finally, I must testify to the pleasure it has given 
me personally to obtain a look into a career so open 
and good and honest, and hope that others may de- 
rive from the account of it a little more cheer, faith 
and philosophy. It was a life from beginning to end 
among difficulties that to most men would have seemed 
overwhelming; yet Jay Cooke's outlook was always 
clear and confident. He lighted his own way through 
mists and shadows and helped thousands of his fellows 
to find the sunshine. He was a marvelous financier, 
a firm patriot and a good man. 

E. P. O. 

Philadelphia, August, 1907. 


Chapter Page 





























COGSWELL ** ** 128 



-THE cedars" " "154 











HENRY D. COOKE " " 232 

MENT TO THE 5-20 AGENCY " " 234 

JAY Cooke's German advertisement, announcing his ap- 
pointment TO the 5-20 AGENCY " " 237 









FUND, 1864 " "366 




COOKE " " 414 











GARDING THE 7-30 LOAN " " 512 




ING Lincoln's okath " "532 

SON'S succession " "535 


SAIES OF 7-30 NOTES ** "54^ 


7-30 LOAN, IN AND ABOUT NEW YORK OTY .... " "584 







Jay Cooke came of English Puritan ancestors. He 
was descended from Henry Cook (the name later be- 
coming Cooke), the first mention of whom is found in 
the town records of Salem, Mass., in 1638, he having 
been, manifestly, an English Puritan emigre of that or 
a somewhat earlier year. In 1639 ^^ married Judith 
Burdsall and died in 1661, leaving nine children, the 
eldest, twenty-two and the youngest, four years of age/ 
The line is now straight through Henry's second son, 
Samuel, who went to New Haven, Conn., in 1663, two 
years after his father's death, there marrying Hope, the 
daughter of Edward Parker, and removing with the 
first planters about 1670 to Wallingford, Conn., where 
he was the only tanner and shoemaker in the settle- 
ment.^ This old patriarch had fifteen children — he was 
twice married — and our line is continued through his 
eldest son, Samuel; the latter's fourteenth child, Asaph, 
(1720-1792), who removed to Granville, a town in 

* Savage*s Dictionary of the First Settlers of New England, Vol. i, p. 
2 C. H. S. Davis, History of Wallingford, p. 672. 

1 1 


southern Massachusetts; Asaph's third son, Asaph, 
(174&-1826), who with his brothers bore arms at the 
battle of Lexington in the Revolutionary War and later 
emigrated to Granville, Washington County, N. Y., in 
the Lake George region, just across the border from 
Vermont, where his son Eleutheros, the father of Jay 
Cooke, was bom on Christmas Day, 1787, the year in 
which the Constitution of the United States was framed 
in Philadelphia. 

From Henry Cook have come many brave soldiers in 
the Revolution and the War of 1812, several wealthy 
New England mariners, and other men and women who 
have gained distinction in the world. Among the 
prominent names in this line are those of Captain 
Samuel Cook of Cheshire, Conn., whose ships went out 
from New Haven in the eighteenth century, bringing 
him a fortune that was largely used in charity ; Colonel 
Isaac Cook, who saw hard service in the Revolution, and 
his son, Captain Joel Cook, who also fought in that strug- 
gle, in several Indian wars and served under General 
Harrison in the War of 18 12; Colonel Thaddeus Cook, a 
soldier under General Gates in the Revolution; and Mrs. 
Rutherford B. Hayes, the wife of the sixteenth Presi- 
dent of the United States. 

Jay Cooke's father, Eleutheros Cooke, was one of a 
large family of sons and daughters, and the life upon the 
frontier, which northern New York was at that day, af- 
forded him few educational opportunities. He attended 
the schools of the neighborhood and read law, enjoying 
instruction for a time under the famous Chancellor 
Kent. His practice began at his home in and about 
Granville. During the War of 1812, his son Jay used 


to relate, he was reported to have been killed. Having 
been drafted, he procured a substitute. As substitutes 
in those days usually fought in the names of those who 
sent them forth, and as Eleutheros Cooke's was killed in 
a battle near Niagara Falls, in 1813, he himself was 
numbered among the slain in the published accounts of 
the engagement, thereby greatly alarming many of his 

On December 12, 1812, Eleutheros Cooke had mar- 
ried Martha Car swell or Caswell, the daughter of David 
Carswell, of Fort Edward, in Washington County, a 
Revolutionary soldier who was taken prisoner and sent 
with a large party of Americans to Canada, where he 
was kept in close confinement for nearly two years, 
being for a part of the time loaded with irons at 
Montreal. Having contracted the scurvy through the 
exposure and inhumanities incident to his imprisonment, 
he was afterward pensioned by the government. Thus 
Eleutheros Cooke, the son of a patriot who had fought 
at Lexington, married a daughter of a Revolutionary 
soldier of New York, who had long languished in King 
George's Canadian dungeons, thereby establishing a loyal 
American ancestry for their descendants. 

Their first child, Sarah E., afterward Mrs. William 
G. Moorhead, was born on January 15, 18 16, and soon 
the young lawyer, his wife, and infant daughter emi- 
grated into what was at that time considered the far 
West. Judge Samuel B. Caldwell and his family, the 
Porters, and several friends and neighbors whose names 
are not recorded, joined the party. The trip was at- 
tended with great difficulty, discomfort, and risk. **It 
took months to accomplish the journey through an al- 


most unbroken wilderness," Jay Cooke writes in his 
manuscript Memoirs, and continues : 

''Fortunately after reaching a point on the upper 
waters of the Allegheny River, now called Olean, they 
ascertained that by means of a small flat boat, manned 
by Indians, they could reach Fort Du Quesne (now 
Pittsburg). They therefore, with the help of the In- 
dians, constructed the boat and getting aboard with their 
few household goods, aided by the Indians with poles 
and paddles, glided down the Allegheny, meeting and 
avoiding many dangers, until Fort Du Quesne was 
reached. They there proceeded to build a larger boat 
with which to descend the Ohio River and, embarking, 
floated down and finally came to the embryo town now 
called Madison, Ind. My father built the first brick 
house on that spot, which was long known as the 'York 
House,' where he and his little family remained until 
the summer of 1818." 

Business soon called Eleutheros Cooke back to the old 
home in New York State. While it was not difficult to 
float down the Ohio, there was no way, before the day 
of the steamboat, to ascend the stream, so he, perforce, 
made his journey overland to Lake Erie, which he 
reached at Ogontz Place, the site of the present city of 
Sandusky. The beauties of the lake and its green 
shores strongly attracted him. By Mackinaw boat he 
was conveyed to Black Rock, a village about three miles 
below the spot upon which the city of Buflfalo now 
stands, and proceeded through the wilderness, the entire 
length of New York State, to Washington County. His 
return to Indiana was effected by the Ohio River route 
and, telling his neighbors of the attractions of Sandusky 


Bay, upon which his mind lingered fondly, they con- 
cluded, though it was winter, to go thither at once. 

**This journey on sledges through a country entirely 
unsettled, except here and there, they accomplished on 
the snow,*' Jay Cooke writes, "and in due time reached 
Blooming\nlle, a spot about eight miles south of the 
present Sandusky. Here houses were erected and my 
brother Pitt was born in 1819. To the south of this 
village was a vast prairie, covered with waving grass, 
with herds of deer and wolves and inmmierable flocks 
of wild turkeys, prairie chickens, etc. I have often 
listened to my father's stories of these things and par- 
ticularly to the account of the journey in the winter from 
Madison and the many escapes from Indians, bears, and 
wolves. To the north of Bloomingville stretched an un- 
broken forest to Sandusky Bay and this was also the 
home of deer and other game. This whole region was 
the paradise of the Indians. Sandusky Bay was at cer- 
tain periods in the spring and fall covered with wild 
fowl and its waters were full of every variety of lake 
and river fish.'' 

The Indians here were Ottawas and Wyandottes and 
it was a district known as the Firelands. Bv her earlv 
charters, Connecticut was granted territorial rights, ex- 
tending westward indefinitely; but in 1786 she had been 
persuaded to surrender to Congress all her vague 
claims west of a line 120 miles beyond the western 
boundary of Pennsylvania. She withheld, therefore, 
a tract 120 miles long north of the forty-first parallel 
of latitude, bounded on the north by Lake Erie and on 
the east by Pennsylvania. This was called the Con- 
necticut or Western Reserve, to-day including ten entire 


counties and fractional parts of four others, an area 
larger than that of the mother state.^ 

Connecticut now proceeded to create a reserve within 
her reserve, — a tract of a half-million acres in the west- 
ern part of her Ohio strip, at present constituting Huron 
and Erie Counties and small projecting parts of Ottawa 
and Ashland Counties — some twenty-five miles of lake 
front with its appending islands, and the back country 
to a depth of about thirty miles. This area was set 
apart for the benefit of such citizens of Connecticut as 
had suffered from the devastations of the British during 
the Revolutionary War, for which reason it soon came 
to be known as Sufferers' Lands ; and because the Con- 
necticut people suffered principally by fire, it was also 
called the Fire Lands. The grandfather and father of 
Senator John Sherman and General William Tecumseh 
Sherman were for many years the agents for their sale. 

The entire Western Reserve, at an early day, de- 
veloped the social characteristics and political traits of 
New England. Connecticut names were reproduced; 
the town system with the town meeting was transported 
over the mountains to new soil ; and the people partook 
of the traditions and sentiments of the Puritans, — a fact 
manifested in a marked way in the sympathy displayed 
for the Abolitionists in this part of Ohio during the 
three tumultuous decades preceding the Civil War. The 
Western Reserve, which produced Joshua R. Giddings, 
Ben Wade, John Brown, and many noted leaders in the 
contest, was not behind New England and the Quaker 
section of Pennsylvania as a centre for the propagation 
of the most radical anti-slavery sentiments. 

1 Alfred Mathews, Ohio and Her Western Reserve, 


Thus Eleutheros Cooke, of an old Connecticut family, 
although his line had passed to Massachusetts and later 
to New York, returned to mingle with the Connecticut 
people in the "New Connecticut" in Ohio. 

It was a matter of some time, involving a good deal 
of diplomacy, to extingfuish the titles of the Indians in 
this region. The principal chief was Ogontz, a big 
swarthy Wyandotte, whose lodge stood on the lake 
front. For this reason the white settlers at first called 
this point Ogontz Place, the name a little later becoming 
Portland, still later Sandusky City, and finally San- 
dusky, a town to-day of good streets, fine business blocks, 
several thriving industries, and containing upwards of 
20,ocx3 people. To Ogontz Place, or Portland, to give 
it the name by which it was now known, Eleutheros 
Cooke's eyes were turned, since Bloomingville promised 
to gfrow slowly, if at all, while the steamboat would as- 
sure the fortunes of towns with harbors on the lake- 
side. Already a crude but seaworthy steamer. Walk- 
in-the-lVater, was making regular trips from Buffalo to 
Detroit, calling at ports on the way. Ogontz and his 
Indians were removed to a reservation about forty miles 
southwest of their old village, and Eleutheros Cooke 
purchased the very spot upon which the chief's wigwam 
had stood. There Mr. Cooke began the construction of 
a stone house, the first to be planned and erected in the 
new town. Many laughed at the enterprise and de- 
clared that enough stone could not be found to complete 
the structure, despite the fact that the city is located 
upon ground underlaid with a blue grey rock, whose 
regular strata part to yield beautiful blocks, now freely 
used for building purposes, and become an item of 


much importance in Sandusky's outward commerce. 
The edifice was finished and Jay Cooke once drew with 
his own hand from memory a picture of it, which is re- 
produced, as he desired that it should be, in this volume. 
There was a wing used as a bedroom to the south of 
the main house and another at the north end, which the 
owner occupied as his law office. It was for those days 
"a most imposing and pretentious mansion," and al- 
though the building was in large part demolished many 
years ago, only the central walls remaining to serve the 
uses of the Second National Bank, it is still, to those 
who know its history, one of the landmarks of the city. 

Meantime the Cooke family, now increased to two 
children by the birth, in 1819, of a son who was chris- 
tened Pitt, continued to live in BloomingviUe until the 
summer of 1821. Then although the stone house was 
not yet ready for them, and could not be for about three 
months, they removed to Sandusky or Portland and 
took up their residence in a frame cottage about three 
hundred feet to the south, on the same street ( Coliunbus 
Avenue) belonging to Dr. George Anderson. There 
the third child. Jay Cooke, the financier of the Civil 
War, was born on August 10, 182 1, "probably the first 
or nearly the first boy baby born in Sandusky," as he 
himself used proudly to relate. 

In the new stone house three more children were born ; 
in 1825, Henry D., later to become the Governor of the 
District of Columbia ; in 1828, Eleutheros, who died at 
the age of two, and in 1831, a daughter, Catherine E., 
who lived to be but three years old. 

Of the naming of the children Jay Cooke often told an 
interesting story. At about the time the first son was 


bom, Eleutheros Cooke had been cheated out of an elec- 
tion to the Ohio legislature, through the voters mis- 
spelling on the ballots his rather formidable name, as we 
shall be told in another place. What ensued Jay Cooke 
relates in his Memoirs : 

"My father determined to infiict upon his son no such 
impediment as a classic name would bring him. At that 
time the English statesman Pitt was in high favor with 
Americans, and so his name was given to my brother; 

and when I was born, my father being a great admirer 
of Chief -Justice Jay, I was given the name of Jay. 
Some five years afterward another son was born, whom 
my father proposed to call Fox for another much ad- 
mired English statesman; but my mother rebelled and 
insisted that the newcomer should receive the name of 
Henry David, after an uncle and his grandfather both 
on the maternal side." 

Of his early life in Sandusky, Jay Cooke's memory 
was vivid and retentive. Many are the anecdotes and 


reminiscences of those first years in the Firelands of 
Ohio. In his Memoirs he writes : 

"At my birth in the town now called Sandusky, the 
place was frequently overrun with Indians. Old Ogontz 
did himself and us the honor of occasionally sojourning 
for a few days on the spot where he had once dwelt in 
his wigwam. On such occasions, he was allowed to 
camp in our barn and my mother fed him bountifully at 
the kitchen table. I was his favorite and occasionally 
was mounted on his shoulders for a ride." 

The Indians frequently returned to pluck the fruit 
from trees, which they said that they had planted, and 
once at least their friendliness was not so much ap- 
preciated. Mr. Cooke tells the story: 

"At certain seasons when the tribes went up to Maiden 
on the Detroit River, to attend the distribution of gifts, 
guaranteed them by treaty, they congregated at San- 
dusky; and I have seen six or eight hundred in the vil- 
lage at a time awaiting the arrival of the small steamer 
Superior, which was to convey them to Maiden and back. 
On their return, we usually had a time with them. The 
squaws were decorated with high plug hats, gay rib- 
bons and beads, and were loaded with blankets and 
other Indian riches; whilst the warriors were loaded 
with fire water, pipes, and tobacco, some of it in their 
stomachs and on their brains. 

"On one of these occasions, some outrage occurred and 
I, a boy of about seven or eight, ran and hid myself 
under the hay in our barn and there offered up a fer- 
vent prayer for my protection. That same night, a 
warm night in summer, after all had retired to bed, 
Miss Stone, who taught us children, was in a room in 


the second story of the main house and with her was 
Master Governor H. D. Cooke, then about ten months 
old. Something awoke Miss Stone and, opening her 
eyes, she saw standing over her a tall Indian gazing 
at her. Her presence of mind was remarkable, for in- 
stead of uttering shrieks, she gently pinched the sleeping 
baby lying on her arm. The little fellow began to cry 
and she pinched again, causing a renewal of the baby's 
distress. This led the Indian to withdraw under the 
bed. She now spoke to the baby in baby language: 
'Want a drinky, darling ?' Baby, under the influence of 
another pinch, played his part well; and then, coolly 
getting out of bed, she said : 'Don't cry, baby, I will go 
and get you some water.' Slipping without haste out 
of the room and down the front stairs, she entered the 
bedroom off the hall. Closing the door and locking it 
quietly, she awoke my father and mother and told them 
her story. My father climbed out of a window to arouse 
some of the neighbors, who all armed themselves and 
came with him to search the house. For a long time 
they could discover no Indian, and had about concluded 
that Miss Stone had been dreaming, when coming into 
a room in which my older brother and myself slept, they 
awoke us and asked us if we had heard or seen one. 
Of course we had not. There was a large store-closet 
in the room, which they had glanced into but had not 
thoroughly searched. They now searched further and, 
lying curled up behind some sugar barrels, they found 
a big six-and-a-half-foot Indian, who pretended to be 
drunk. He was dragged downstairs and the party, 
thoroughly sure he was in a state of intoxication, opened 
the front door, and with a parting kick, ordered him 


away. He sprang up and was off like a deer in an in- 
stant. This Indian went to a neighboring barn and 
stole a fine white horse, fleeing then to the forest. The 
theft was discovered by five in the morning and a posse 
of young men, armed and on horseback, soon overhauled 
Mr. Indian in the woods back of the town, and brought 
him in. I remember seeing him chained to the wheel of 
a big wagon. He was speedily tried and convicted and 
sent down in this wagon to the Columbus jail, as we had 
no jail at that time in Sandusky. 

**I remember a grandfather's clock still in our family 
at Sandusky which was saved from a log house, partly 
burned by the Indians at Cold Creek, near Sandusky, 
a few years before, and at which time nearly all the 
family were massacred. These Indians were after a 
w^iile placed on the Reserve up at the head of Lake 
Superior and one day, when I was on a trip to that part 
of the Lake region, I discovered and took to the hotel to 
show my wife, a boy and a girl, very bright Indian 
children. The boy was called Ogontz and was no doubt 
a great-grandchild of old Ogontz of Sandusky." 

In a letter to a niece, Mr. Cooke wrote in 1896, recall- 
ing other incidents of the early times at Sandusky. *'I 
have frequently seen my mother at the flax spinning- 
wheel and the larger wool spinning-wheel," said he, **and 
spent many a half-hour watching her graceful and 
vigorous movements, while thus preparing the material 
for our stockings and clothing. I have remembrances 
of her beautiful song singing. She was very hospitable 
and the gatherings of the neighbors at our house were 
very frequent, particularly when father would bring 
back from Columbus some cans of fresh oysters. My 


motlier was a good cook and a vast dish of toast and 
oysters was only one of many good things she provided 
for her guests on such occasions. I have seen her busy 
with her girls, dipping candles in the old-fashioned way, 
as well as at her work making preserves and preparing 
other necessary supplies for a bountiful table." 

"As I grew older," writes Mr. Cooke in his Memoirs, 
"my education was carefully attended to and until the 
age of fourteen, I was drilled, not only in the village 
school, but occasionally for a couple of years in a private 
school taught by Lydia Stone, a cousin of much talent 
and many accomplishments ; and also for two periods in 
a private academy, taught by Mr. Adams in the base- 
ment of Grace Episcopal Church; but the best aid I 
received came from my grandfather Caswell, who every 
evening for an hour or two drilled us boys in all our 

Grandfather Caswell, the old Revolutionary soldier 
who had so long suffered in the Canadian prisons, had 
now removed to Sandusky with Grandmother Caswell, 
securing a home in Wayne Street between Water and 
Market Streets, not far from the famous stone house. 
Some of the Cookes had also followed Eleutheros to 
Ohio, including his father, mother, and brothers. Grand- 
father Asaph Cooke, who had taken part in the battle of 
Lexington, having died at his home on the "Ridge" near 
Sandusky, when Jay was only five years old. However 
studious Jay and his brothers may have been, he wished 
none to think that they were "book worms and not true 

"We had a happy faculty," said he, in his old age, 
recalling those pleasant days, "of properly mixing work 


and play, study and reading, in due proportions. Early 
in the morning we must assist in feeding the horses and 
cattle. Then we must cut, split, and carry in the needed 
amount of hickory and oak wood, when we had an hour 
or so at ball, tag, or other grand sport. I was always a 
hunter and fisherman, and went many a time into the 
woods and prairies at 4 a. m. and brought home plenty 
of game, or in a canoe to the Cove and returned with a 
good supply of fresh fish; but always, ere leaving, 
slipped into mother's well-supplied buttery and devoured 
a pumpkin pie and a glass of milk, and filled my pockets 
with doughnuts. What happy days those were! We 
had our winter sports on the bay, our sleigh rides with 
our favorite girls, our dancing school, our spelling 
school, and each boy had his own particular sweetheart. 
I had nearly half a dozen. I did not finally marry them 
all, or even one of them. The dear girls, Pallas, Kate, 
Susan, Mary, Maria, and Julia, were all good and pretty, 
but as I left Sandusky in my sixteenth year and never 
returned there except for brief visits, they all deserted 
me and became happy and buxom wives of good hus- 

Jay Cooke's father prospered in his law business in 
Sandusky. He attained a leading jx^sition at the bar 
in his neighborhood and mingled his practice, "which 
reached south and west and east and even to Canada," 
with a love for politics, like the true Ohioan that he 
soon came to be. The law in the Ohio of that day was 
as rude and picturesque a professioh as in Illinois when 
Lincoln travelled the "circuit" in his buggy, pulling up 
at night with his fellow lawyers, the judge, jury, clients, 
and witnesses, at a country tavern, where some ex- 


changed amusing anecdotes while others played cards, 
drank corn whiskey, and caroused the night away. 
Eleutheros Cooke always lived apart from all this 
revelry. He was identified with various temperance 
societies and so strictly did he adhere to the standards 
of his Puritan forebears, that he was never known to 
smoke a cigar until he was fifty years of age. Earl 
Bill,* a friend and business associate of the Cooke boys 
in Sandusky has recorded several interesting reminis- 
cences of their father.^ He had notable oratorical 
talents, being very ready of speech, and having a large 
command of language and a highly fervid imagination. 
He also had shrewdness and tact, as is illustrated by 
an account of his management of a certain collection 
suit, placed in his hands. Mr. Bill says: 

It was before Huron County was divided and while Sandusky 
was within its jurisdiction. The defendant in the case was an 
officer of one of the steamboats which in those days made trips 
between Buffalo and Detroit, touching at all the " way ports/' 
sometimes spending several hours in receiving and discharging 
freight ; but this boat seldom stopped at Sandusky. The debtor's 
vessel, having on this occasion landed at Sandusky, his creditor 
sued out a capias on which the debtor was arrested and taken 
before the magistrate. The debt claimed being beyond the juris- 
diction of that court, defendant moved to quash the writ. Mr. 
Cooke, being well aware of this defect, had posted a messenger, 
duly armed with the necessary legal documents, to the county 
seat at Norwalk, there to obtain from the clerk's office of the 
Common Pleas Court a writ of arrest that would enable him to 
bring the defendant to time, and informed the justice that he de- 
sired to argue the question of his jurisdiction. After glancing 

1 In 1855 he was associated with Henry D. Cooke in the publication of 
the Sandusky Register, the firm being Bill, Cooke & Co. 
* Magazine of Western History for May, 1885. 


at the question at issue, he branched off into a minute and com- 
prehensive history of law in general from the earliest times to 
the present, only pausing to inquire of his client, if the messen- 
ger had returned. It being in the spring season, the roads were 
deep with mud and the sixteen miles of travel was not to be per- 
formed very speedily. On being informed in the negative, Mr. 
Cooke resumed, speaking upon a great number of topics, and 
having exhausted them all, he announced his purpose to illus- 
trate the legal question before the court by a review of the his- 
tory of the human race. He had not yet come to the Christian 
era when the messenger arrived, duly armed with the needed 
papers, Mr. Cooke announcing to the court that, as the question 
of his jurisdiction was contested, the motion to quash might as 
well be allowed. The arrest upon the new writ being made, de- 
fendant paid the debt and he and his steamboat went on their 
way. Thus Mr. Cooke accomplished his purpose by speaking 
about sixteen hours against time. 

But he was not always so successful in securing a 
patient hearing. Mr. Bill continues his reminiscences of 
Eleutheros Cooke : "While speaking against time in the 
Court of Common Pleas of Huron County on one oc- 
casion, he was giving full sway to his vivid imagination 
by heavenward flights, when Judge Higgins, who was 
presiding, checked him : *Stop ! stop ! Mr. Cooke,' said 
the judge, *you have already gone so high as to be out 
of the jurisdiction of this court.' " 

Mr. Cooke's oratorical powers, so well developed at 
the bar, served him long and well on the stump. He 
was a favorite speaker at political meetings and was 
elected and several times re-elected to the legislature of 
Ohio. It was in one of these contests that he was 
brought to imderstand the disadvantages of bearing a 
cumbersome and unspellable name. His rival for the 
office was a shrewd young eastern lawyer, lately become 


a citizen of Ohio. Upon many of the ballots cast for 
Mr. Cooke, Eleutheros was misspelled, becoming "Lu- 
therus'' and "Eleutherw^/' instead of os. This fact did 
not escape the observation of his cunning competitor for 
office, who found whole townships in error, and when 
the defective tickets were thrown out, Mr. Cooke was 
beaten, although having a majority of six hundred votes 
on the face of the returns. 

In 1830 he was selected by the Whigs of the Firelands 
and the surrounding counties to represent them in Con- 
gress which he did with marked ability. His district 
was the one for which John Sherman sat for several 
terms in the national House of Representatives, al- 
though it was later shorn of much of the territory it 
had included in Mr. Cooke's time. 

In the Ohio delegation, composed of fourteen men, 
was Tom Corwin; and in the House, when Mr. Cooke 
reached Washington, he found John Quincy Adams, elo- 
quent in his denunciations of slavery, and his colleagues 
from Massachusetts, Edward Everett and Ruf us Choate ; 
James K. Polk and John Bell of Tennessee; Gulian C. 
Verplanck of New York; William Drayton, George 
McDuffie, Clement C. Clay, and many other men of note 
in the past and to gain distinction in the future in 
various public fields. It was an exciting period in leg- 
islative halls in Washington and in Mr. Cooke's single 
term in Congress, as fortune decreed, was to occur much 
of vital importance in American history. His first ses- 
sion began in December, 183 1, and continued until the 
following July. The principal achievement was the adop- 
tion of Clay's protective tariff bill of 1832 by the Whig 
majority. The echoes of the great Webster-Hayne de- 


bates in the last Congress had not yet died away, and 
South Carolina now attempted to put into force her 
famous doctrine of nullification, those who had passed 
the tariff bill hurriedly and in fear gathering to modify 
it and make it acceptable to the rebellious state. Mr. 
Cooke was tested in the fire and the principles of his 
Puritan sires suffered no damage. He had voted for 
the measure in 1832 and he saw no reason for so soon 
changing his opinions, because of the protests and 
threats of any state. In February, 1833, the new bill 
was passed in the House by a vote of 1 19 to 85, but he 
was in the minority with John Quincy Adams, Rufus 
Choate, Edward Everett, and the New Englanders. He 
was silent in this contest, but that he was a disciple of 
Hamilton, Webster, and the loose constructionists, is 
made clear by his speeches on the bill appropriating 
money to relieve the wants of the widow of Commodore 
Decatur. "I am not one of those,'' said he, "who, in 
the exercise of the monopoly of mental power, delegated 
to me as a member of this House, upon the great subject 
of national policy and legislation, feel willing to be bound 
up in the tight waistcoat of strictly literal construction. 
I believe in the existence of an implied, as well as an 
expressed power in the Constitution. It would not be 
worth the paper on which it is written if it did not pos- 
sess that power. Without the existence of that power, 
it must have remained forever a motionless machine 
and could never have been, constitutionally, put in opera- 

Aside from this speech, in which he argued in favor 
of a larger appropriation, — so that the Commodore's 
nieces, the Misses McKnight, should be benefited as well 


as Mrs. Decatur — and an effort to have a road built from 
Sandusky southwardly to the Indian lands, his sole par- 
ticipation in the debates while in Congress was in con- 
nection with the famous case of Sam Houston. Cooke's 
colleague, William Stanberry, in a speech in the House 
had charged Houston with corruption in connection with 
an Indian contract. Houston was not then a member 
of Congress, but he was in Washington, and meeting 
Stanberry on Pennsylvania Avenue one evening, he be- 
labored the Ohio Representative with a heavy cane until 
he lay insensible on the sidewalk, breaking some bones 
and inflicting injuries that kept him in his bed for sev- 
eral weeks. The brutal act aroused the ire of the Whigs 
and particularly of the Ohio members. Houston was 
brought before the bar of the House, the question of 
jurisdiction was lengthily argued and the culprit was 
tried, foimd guilty, and reprimanded. Mr. Cooke was 
unsparing in his denunciation of the outrage. Re- 
peating Stanberry's allegations, he said: "Now, can 
any human being longer doubt the intention on the part 
of Houston to defraud the government? If such a man 
could be found, I should scarcely know which most to 
pity and despise — ^the obtuseness of his intellect or the 
obstinacy of his credulity.'* Such an attitude was by no 
means free of danger in the state of political feeling at 
that particular time. Eleutheros Cooke was soon taken 
to task and practically challenged to a duel by Dr. E. 
S. Davis, of South Carolina, acting through General 
Demitry of Louisiana. Davis had been a witness for 
Houston during the trial. Mr. Cooke had addressed a 
question to him in the cross-examination, which was held 
to be impertinent, and he demanded an explanation in a 


note that was promptly laid before the House by its 
recipient. Congressional dignity having again been at- 
tacked, there was prospect of another arrest and repri- 
mand. By a majority of only two votes the members 
decided to take no note of the incident, although Mr. 
Cooke made an eloquent speech, concluding that "if the 
House should determine to truckle to arbitrary power 
and disregard its own safety, dignity, and honor, it 
would be no longer a desirable place for him, and he for 
one should be disposed to resign a seat upon that floor 
and go to a place where he would find both honor and 
protection in the bosom of his constituents." ^ His po- 
litical opponents professed a willingness to have him re- 
turn to "the bosom of his constituents," if that were his 
choice, and the words were associated with Mr. Cooke's 
name in the newspapers for many years. 

His fluency at the bar and in the Ohio legislature was 
noted also at Washington, and his style of oratory was 
slightly too colorful for some of the older members. In 
his speech in behalf of Commodore Decatur's nieces, he 

"These young ladies were his once dependent cher- 
ished kindred. His pulse, which never beat so nobly as 
when rushing to the high places of peril for his coun- 
try's glory, still survives and throbs in their kindred 
bosoms. The same blood which rushed to his heart, 
braced his mighty soul to the execution of this glorious 
deed beneath the frowning battlements of Tripoli, black- 
ened by cannon and bristling with death, still mantles 
in the cheek and flows in the veins of those from whom, 
in behalf of the illustrious dead, we plead." 

^Register of Congress for 1833. 


Again Mr. Cooke said: "We have still lingering 
on the earth here and there, thinly scattered up and 
down the land, a venerable actor in that great drama — 
the bloody yet triumphant tragedy of the Revolution — 
which stands without parallel in the long tracts of time, 
looks down from its cloudless summit upon all other 
events and mocks the loftiest flights of human eulogy." 

Mr. Cooke's family remained at Sandusky w^hile he 
was in Washington and they were days to be remem- 
bered by his young sons. Jay Cooke says of this 

"When my father was in Congress, we boys were his 
constant correspondents and scarcely a day passed that 
we did not write to and receive letters from him. Mv 
uncle Erastus Cooke was postmaster and we boys were 
up many a night (the mails arrived only three times in 
a week) until midnight and at the post office, listening 
for the sound of the postman's horn, bad roads and deep 
snows frequently delaying his arrival until a late hour. 
But when the mail did come and we had assisted our 
uncle in opening and distributing it, what treasures we 
had to take home to mother ! There were many letters 
for all of us and packages of books — all tied up with red 
tape and sealed with red wax and franked by our father 
as a member of Congress. Late as it was, my mother 
proceeded to open everything. We were all impatient 
to see the contents and stood around her, a happy ex- 
pectant group. But in those days the supply of red tape 
was not so abundant ; it was therefore worthy of preser- 
vation and the removal of the great seals was a task 
of no slight character, for on no account must any of 
the tape be cut or damaged. The best books were al- 


ways chosen by father for his children. In the course 
of two years our Hbrary was full, and in the evenings 
and at leisure times we literally devoured them as com- 
mon property, although we divided fairly all that came 
to us. I had thus the advantage of reading and study- 
ing hundreds of volumes on a great variety of historical 
and scientific topics, interspersed by good romances, 
poetry, and moral volumes on all subjects." 

Several of Eleutheros Cooke's letters to his sons, 
while he was in Washington, testify to his affectionate 
care of them, and his desire that thev should be in- 
structed regarding political affairs so as to be able to 
follow him in public walks of life.^ 

On December i6, 1 831, he wrote from Washington to 
his eldest son, Pitt Cooke, then twelve years old : 

Your very excellent and welcome letter of the 4th instant has 
this moment come to hand. It was handed me by the post boy as 
I was passing into the dining-room for dinner. I shall soon 
expect a letter from Jay and frequently from Sarah. Will you 
be so kind as to aid me by urging them to write often. In the 
meantime you must write again yourself. Tell me everything, — 
the sleigh rides, the deaths, the accidents, the fights, the wed- 
dings, the railroad news, the Ridge news, the price of flour, pork, 
beef, etc., the kind and quantity of wood on hand, and everything 
else you can think of. Write me a long letter and tell Jay to 
write long also. If you Icam well this winter, I will send you 
to Mt. Vernon next or bring you on with me to Washington, 
where you will see General Jackson, Mr. Clay, Mr. Adams, and 
all the other great and splendid men in the nation. Let me con- 
jure you to be a good boy in all things, and above all to waste 
no time, but devote all your leisure hours to study. The weather 
this day is colder here than it has been ever known before in 

* These letters are in the possession of Jay Cooke's niece, Pitt Cooke's 
daughter, Mrs. T. Morrison Sloane, of Sandusky, O. 



Washington. The poor are suffering and almost perishing for 
wood, and the little shivering inmates of their wretched abodes 
beset our walks and beg with tears for charity. What think 
you of this, my dear fellow? How fortunate is your situation 
compared with theirs. Tell Henry D. I love him and wish he 
could also write to me. Take good care of him and be kind to 
your mother. Many cold and some warm months must pass 
before I can see you and my old dear home again, but they will 
soon roll away, and my heart will again be gladdened by the 
society of my children and my friends. I would write more but 
have other letters to answer and must bid you, my dear son, 

adieu. Very affectionately I am your anxious father, 

E. CooKE. 

On February i6, 1832, Eleutheros Cooke wrote from 
the House of Representatives: 

Dear Pitt: 

We are now engaged in determining upon the most suitable 
manner of paying honors to the memory of George Washington. 
One hundred years ago on the 22d day of this month this great 
man was bom. You have read of him as the father of our coun- 
try and the founder of our liberties. Hereafter you will learn 
more of his glorious career. His name is associated with every- 
thing dear to mankind and his fame will only perish with the 
universe. When I was a boy about your age, in December, 1799, 
while skating upon the ice of my native river, I received the 
notice of Washington's death. It struck upon my heart with a 
weight which can never be forgotten. I dashed off my skates in 
great haste and with tears in my eyes, repaired, agitated and 
overwhelmed, to my home. I had heard the gray-haired war- 
riors of the land pour forth their broken eulogies upon Washing- 
ton, and I trembled at his fall with a sort of cold and shudder- 
ing fear that my country must fall with him. Never was there 
a sincerer mourner. For months the deep impression of his loss 
hung upon me and I was sad. 

Be a good boy, kind to your mother, and know that while I 
live you will have a friend. E. Cooke. 


And again the father wrote to his son in Sandusky: 

Washington City, March 27, 1832. 
House of Representatives. 
Dear Pitt: 

Your letter of the i8th inst., beating its way through mud 
and storms and over mighty rivers and lofty mountains, has 
this moment been received. The postmark says that it was 
mailed and started on the 19th. Of course having reached 
the post office here last night it was only eight stormy days on 
its journey of 500 miles. This shows you, my dear boy, how 
easily you can hold conversation with me, if you will, even at 
this great distance, and how readily and instantly I transmit to 
you my reply. You say you *" have received no letters from me 
lately." True, and what do you think is the reason? Because 
I have had nothing from you to answer. Understand this and 
if you are pleased to receive a letter from me, you have only to 
write often and you will secure the object. ... I am much 
pleased with your improvement in writing. Some of your words 
are nearly equal to copperplate engraving. I hope you have re- 
ceived your last books and that you and Jay will profit by them. 
I have been delighted to hear that you have been, both of you, 
good boys, very good, and I assure you you shall be rewarded 
for it. May Heaven bless you, my dear child, and prosper and 

guide vour tender years. 

E. Cooke. 

Both in and out of the legislature, Jay Cooke's father 
was always foremost in movements tending to the ad- 
vancement of the material interests of Sandusky. He 
foresaw its future growth which, however, was not so 
rapid as the people desired, the energies of the Reserve 
finding an outlet in the upbuilding of the city of Cleve- 
land. Living until 1864, he was enabled to see many 
of his investments in real estate yield him a comfortable 
increase. He early had a part in the development of 
the canal and railway systems in Ohio. In his Memoirs 


Jay Cooke writes of his father's interest in internal im- 
provements : 

"After Dewitt Clinton had succeeded so grandly in 
opening the New York canals, Pennsylvania and Ohio 
determined to enter upon a like development. In Ohio 
the contest as to routes was most vigorous and excit- 
ing. My father, then a member of the legislature, pro- 
posed and defended the central route from Sandusky to 
Cincinnati, the shortest and by far the best; but after 
a long struggle he was defeated and the state was 
plunged into a heavy debt, by the determination to build 
an impracticable canal from the mouth of the Cuyahoga 
at Cleveland to Portsmouth on the Ohio River and from 
Maumee to a junction with the Miami River. The east- 
em and western portions of the state did some 'log 
rolling,' and defeated the central route. My father was 
greatly disappointed, but in the meantime he had been 
examining the newly devised plans for railroads. He 
drew up a charter and there being no opposition, it was 
granted to the first railroad, [west of the Alleghany 
Mountains] viz., the Lake Erie and Mad River Rail- 

"It is said that this charter is a model one. Railroad- 
ing was a subject then little understood and some back- 
woods legislators supposed the charter was for a Rail 
Road, i. e., for an improved kind of 'Corduroy road'; 
such as the people laid down to enable them to cross 
marshes and swampy places. The incorporators did 
not avail themselves of their privileges until 1831 or 

* A railway charter was granted in New Jersey in 181 5 while the 
Philadelphia and Columbia Railroad was chartered in Pennsylvania in 
1823, — J- L- Ringwalt, Development of the Transportation System in the 
United States, p. 66. 


1832, when ground was broken at Sandusky and my 
father was the orator of the day. General William 
Henry Harrison and many other notables were present 
and the guests all dined at our house. There was a 
procession, a band and a cannon, and I remember that 
we boys all walked in the parade and had a big time 
generally. Soon, by the aid of an English strap rail, 
the Mad River road was opened to Bellevue, a distance 
of about twelve miles. The cars were at first hauled 
by horses, although one of the first locomotives built in 
this country was brought on from the works at Pater- 
son, N. J. [This machine was called "The Sandusky."] 
At one time my father was president of the corporation. 
Under the impetus of this road, which was rapidly ex- 
tended to Springfield, Sandusky grew from a village to 
a thriving city of fifteen thousand inhabitants, the usual 
result of railroad building." 

The canal scheme failed; the people selected the lum- 
ber industries instead of the iron trade, which swiftlv 
contributed to the growth of a great city at Cleveland, 
sixty miles farther east on the lake front, where there 
was a harbor of much less natural worth ; the cholera in 
1849 ^^d 1852, brought into the town by emigrants, 
was wrongly and with damage attributed to unwhole- 
some local conditions; and altogether Sandusky de- 
feated the expectations of the more ambitious of its first 
inhabitants. Moreover, its people lacked the helpful, co- 
operative, metropolitan spirit of the men who made 
Cleveland what that place is to-day, and have many 
times stood in the way of their own advancement. 

As a boy not yet sixteen years old, on January 5, 1837, 
Jay Cooke, then in St. Louis, wrote to his brother Pitt 


of his father's sanguine expectations of Sandusky's 
prosperity : **I fear the Delphic oracle will prove false 
from some mismanagement of the ingredients used to 
effect that object. Poor Sandusky! You have indeed 
been like the outlaw, shunned and persecuted by men. 
Arise, ye men of Sandusky! Shake off your apathy! 
Risk all for her and I trust she will yet reward you for 
your care." 

Considering that his father was a professional man 
who well knew the value of schools. Jay Cooke was in- 
ducted into business life at a remarkably early age. 
The lad had an unusually self-reliant spirit and his am- 
bition to be off in his race with the world, is exhibited 
in this boyish letter, written on November 23, 1833, 
when he was but little past twelve years of age, to his 
brother Pitt, at that time attending the college at Gam- 
bier, O. : 

Having a few leisure moments I shall devote it to the purpose 
of writing to you which I hope you will receive with satisfac- 
tion. In comparing your present state with that of mine, I 
should draw it in this way. While you are under the discipline 
or instruction of your teachers toiling up the hill of science 
struggling to snatch the deathless laurels from the mountain's 
brow I am at home running tip top at my father's call and doing 
errands at my mother's command, feeding the hog, currying the 
horse and doing all manner of things too numerous to 
mention. But never mind that; my turn comes next, mind ye; 
you will see me digging up Kenyon hill of science next spring 
if god be willing. The weather is very cold and the frequent ^ 
changes of the weather make it still more loathsome scarcely 
does one storm blow over than another still more horible apears 
in sight, when all at once old boreas sets up a tremendous 
howl (the wind) and makes the earth under our feet tremble 
at his aproach. It is growing dark and the sun is setting 


in the west with all its meridian splendour, shining as it docs 
upon our glassy bay like polished steal but I must quit. 

It is Saturday night and another week has rolled over our 
heads and yet that god that rules above has preserved us write 
as often as I do. 

Jay Cooke. 

Pitt Cooke bachelor of arts. 

In 1893 in his seventy-third year, looking back upon 
these early days, Mr. Cooke wrote in his Memoirs, de- 
scribing his introduction to the business world : 

"My father, in addition to his law business, was a 
partner with an uncle in a store in Sandusky and on Sat- 
urdays, when there was no school, and frequently at the 
noon hour, I would assist my uncle or relieve him when 
he was at his meals, — this when I was not over nine 
or ten years old. I kept a supply of tin toys, picture 
books, etc., in one end of the front window and earned 
all my spending money through their sale. In fact I 
was quite a capitalist. I once enclosed a two dollar bill 
to my brother who was in school at Gambier-Kenyon 
College, but he promptly returned it, saying that he 
would not be so selfish as to take any of my hard-earned 
money. These store journals are still at Sandusky and 
show my handwriting as I gravely entered in them 
such charges as this : 

"Lucas S. Beecher, Dr. 

To half pound Young Hyson Tea .50 

"Thus when I was about fourteen, I considered mv- 
self a full-fledged merchant and did not hesitate when 
one day my father came in and flourished before my 
eyes a huge roll of five dollar bills, fresh and crisp and 
issued by the new bank at Sandusky, a part of the pay- 


ment for our old home, which he had just sold to Squire 
Beatty, and jokingly, but with apparent seriousness 
said: 'Now, boys, you will have to go to work, for we 
have no home now/ I took the matter seriously and 
hearing that Messrs. Hubbard and Lester, a firm of 
young New Yorkers just established in Sandusky with 
a large stock of dry goods, groceries, hardware, etc., 
required a clerk, I applied for a position and got it. I 
was out of school and a big merchant nearly ten days 
before it was known that I had a new occupation. I 
soon became head clerk and the first winter Mr. Hub- 
bard, who was now the only member of the firm (Mr. 
Lester having opened another store), taught me double- 
entry bookkeeping and many other things during that 
long dull season when no country merchants came to 
town. He also taught me the game of chess.'' 

Young Jay's education, so early interrupted in school, 
was also going on in another direction — in a debating 
society, where he seems to have had his first introduc- 
tion to the slavery question, in the settlement of which 
he was later to perform such signal services as his coun- 
try's financier. His own account of this little Sandusky 
literary club is as follows : 

"When a boy in Mr. Hubbard's store, some of the 
youth of about my own age decided to join together in 
a debating society. I was asked to draw up a plan and 
by-laws. My father did this for me and fixed the title 
as the Philo Literati Debating Society. Our member- 
ship was about fifteen, comprising several young clerks 
like myself and George and Frank Campbell, the sons 
of David Campbell, the editor of the Sandusky Clarion, 
now the Sandusky Register. Our meetings were held 


in the second story of the old 'White Store/ then va- 
cant, the only access being up a ladder and through a 
trap door. This room we fitted up rudely and for a 
few weeks all went on satisfactorily, and many great 
questions were debated. We imagined ourselves far su- 
perior to the legislature or even to Congress. At this 
time the negro question was coming to the front and we 
had a debate on slavery. Opposite our room was the 
only barber shop in town, kept by old Bob Holmes. 
Here most of us were accustomed occasionally to ren- 
dezvous, especially when the advent of a circus or men- 
agerie was proclaimed, for old Bob was always favored 
with a full set of pictures, which he hung on his walls 
and which were greedily stared at by us boys. Bob 
had a nephew from Virginia, a mulatto, assisting him, 
a boy of about our age named John Honeycut. Bob 
knew of our debating society and, although our rules 
prohibited visitors, asked some of us to let John sit in 
the corner and listen, so that he could get some benefit 
from the young gentlemen's speeches. Those of us who 
were asked at once gave our permission, not dreaming 
that the rest would make any objection. I was par- 
ticularly interested in John, since from him I had fre- 
quently derived a revenue before I became a clerk. 
John was a capitalist and had unlimited numbers of pen- 
nies and six-penny bits, derived from blacking the gen- 
tlemen's boots. I was skilful in fashioning little boats 
and rigging them — ^boats of all sizes from four to twenty 
inches in length — and I even went so far as to manufac- 
ture a steamboat that was sixteen inches long and had 
paddle wheels, etc., the motive power being derived from 
an old clock spring. The contrivance, when set in mo- 


tion with some burning gum placed in the smokestack, 
was a fair illustration of the rude steamers of those 
days. It brought me one dollar, which nearly depleted 
John's purse, but filled mine to overflowing. 

"John was a great favorite with the boys, and with 
me especially ; so I personally called for him at an early 
hour and had him snugly placed in a corner of our de- 
bating room. About half the boys knew of this and 
acquiesced in it, but the others had not been consulted. 
Moreover, it was against the rules and a big row began 
at once. George and Frank Campbell, Bob Belden, and 
others declared that they would not have a nigger in 
the room. We insisted on John's remaining and then 
followed efforts on their part to put him out. We were 
successful in resisting the enemies of the negro race 
and forced these pro-slavery members into the street, 
barring the door. They immediately commenced an as- 
sault, aided by a number of the bad boys of the town, 
but did nothing more than break some of the windows 
and cast a covering of mud all over the door. We held 
the fort and thenceforth, until the breach was healed, 
conducted the war against slavery on paper, in which 
mode of warfare the boys of the Clarion office had the 
advantage. Each morning for over a fortnight the 
gates and fences in the village were covered more or 
less with very outrageous attacks from them, all printed, 
while our replies had to be written out with the pen. 
Such indecent words were thus exposed to the eyes of 
the citizens that we received a warning from the au- 
thorities to desist, or take the lawful consequences. 
After this, as when an outsider interferes between man 
and wife, we concluded to join our forces. Thus we 


were reconciled and it all ended with a candy pull and a 
rat hunt at John Weeden's store, the rats, dozens of 
them, later being found tied to the doors of the justice's 
office and those of some others who had taken active 
measures against us. Lucretia Mott, who lived in the 
Chelten Hills as our neighbor and who prided herself 
doubtless upon being an original Abolitionist, was 
greatly amused when I claimed precedence and told her 
the story of our negro war away back in 1834. 

"In these days and for many years thereafter, San- 
dusky was on one of the principal routes of the Under- 
ground Railroad and my mother and most of the ma- 
trons of the city, when applied to, furnished the black 
fugitives with meals and other needed things, wishing 
them God speed to a land of freedom." 

It was while Jay was in the Sandusky store that he 
wrote to Pitt, who was now, on January 10, 1836, at 
Norwalk Seminary in Norwalk in the Firelands : 

Dear Brother Pitt, Esqr,: 

Take good care of my comforters and, if you please, do not 
send them By any Body for fear of their falling into Bad hands 
I shall Be out to see you in a few Days if you will allow me on 
Sunday if not I shall come some weekday. If you dont send 
us better letters (I mean larger ones) for it costs as much for 
small ones as large, we shall make you pay Postage yourself 
(if you have money) if not I hope you won't sell my comforters 
to obtain it. ... I have nothing more to write at present. 
But that all our folks are well. Direct an answer to this scrawl 
to me Jay Cooke Esqr. of Sandusky City if you please, write 
all the news you can and never mind postage. 

Jay Cooke. 

P. S. if you get in want of anny money, just let me know 
of it. Jay Cooke. 


On June 7, 1836, Jay writes to Pitt, who was still at 
school in Nor walk: 

We miss you very much on our rambles. Last Sunday we all 
went up to the creek or rather that second Susquehanah, to 
catch some of the inhabitants of that element and we were caught 
ourselves by a fine shower of rain which made us scamper for 
dry places like chickens at their mother's call. But we were 
finely paid for such a truant ramble on Sunday by getting 
dripping wet which saved us the trouble of going in swimming 
which we intended to have done, had we not met with such an- 

Jay remained with Mr. Hubbard until the summer 
of 1836. His salary had been increased to $250 a year, 
but an opportunity now came to him to advance his 
fortunes in St. Louis. He was offered $600 if he would 
change his employers and, attracted by the prospect of 
earning so much money and through love of travel and 
adventure, he accepted a position with the firm of Sey- 
mour and Bool, young New Yorkers who had opened a 
large establishment at that far western post. "Mr. 
Seymour had returned to Sandusky en route to the 
West," Mr. Cooke observes in his Memoirs, "and I 
think he was in love with a cousin of mine there and 
wanted me, not only on account of my own merits but 
as a link between himself and Miss Hurd.'' The finan- 
cier tells of this trip and his experiences in his new 
home as follows : 

"We were over two weeks in reaching St. Louis, hav- 
ing to go by stage to Cincinnati, wait there for two or 
three days for a small steamer, and then as long for a 
larger boat at Louisville below the falls. At the last 
named city, I went to a theatre for the first time in my 


life, seeing a performance of Pizarro. In this way we 
reached St. Louis and found it a town of 7,500 people, 
mostly French and Indians. We had to wait six weeks 
for our store to be completed and, during this interval, 
I did much hunting and killed game of many kinds 
where the largest portion of the great city of 500,000 
or 600,000 people now stands. At this time Chicago 
was not known except as Fort Dearborn, with only a 
few rude settlers' shanties on the wet prairies surround- 
ing it. While in St. Louis I attended a writing school 
twice a week in the evenings and became a really good 
penman. I also attended on other winter evenings a 
French dancing school where I learned to waltz and 
took lessons in the French language so that I could con- 
verse quite freely with the ladies who came to our 

But these interesting and important years in the de- 
velopment of Jay Cooke's character must not be passed 
over so lightly. Only four months past fifteen years of 
age, on December 20, 1836, he wrote his brother Pitt 
from St. Louis: 

Pitt, I have fine times. I go to the dancing school twice a week. 
But I suppose you, though, don't care much about that accom- 
plishment. Picture to yourself your brother Jay in a spacious 
ball-room with a beautiful French brunette by his side, skipping 
along and having fine times, and dressed in a fine brown coat 
(four inches shorter than usual), with white silk vest, black cassi- 
mere pants, white silk stockings, fine pumps, white handkerchief 
and gloves, hair dressed and all erect, talking Parley Voo with 
the beautiful creatures. Oh, don't mention it! Fine oysters 
here, Pitt, and I have my full share and fine hunting too. There 
are lots of Indians in the city today. Look like devils. 

On January 17, 1837, the boy again wrote: 


You mention [in a letter he had just received from Sandusky] 
the irregularity of the mails; it is provoking that the mails are 
not more regular and speedy. I wish Amos Kendall ^ and his 
distress (express) mails were in the bottom of the Atlantic 
Ocean. We cannot depend upon our mails and it frequently 
happens that three weeks expire without one mail from the 
East; at least it has this fall. I am glad to hear that my views 
of our country's affairs correspond with yours. My thoughts are 
or ought to be those of my father, for have I not been directed 
by him to the paths of integrity and honor and have not his 
opinions and views been instilled into my youthful heart? Has 
he not in his counsels pointed out the vices and snares which 
you know youth otherwise seldom escapes from and has he not 
implanted in my heart a love and veneration for my country 
which can never be effaced ? Yes, he may rest easy, for though 
I do not honor to his name I will not disgrace it. 

You wish to know how our business prospers. At present 
there is little doing and expenses large. Our spring business 
will commence in about four weeks ; then business will be abun- 
dant The merchants from the country and the caravans will 
purchase their goods about that time. We do not intend doing 
retail business after this winter. The ladies are hard to deal 
with ; more so here than at Sandusky. The population of the city 
consists of part French (almost savages) Spaniards, Italians, 
Mexicans, Polish (all noblemen III) Indians, a set of gambling 
Southerners, and a few skinflint Yankees. There is but few 
respectable persons in St. Louis. It is dangerous for a person 
to go out after dark, for persons are often knocked down at 
the comers of the streets and robbed and frequently killed. 
The old French people and the Spaniards look more like cut- 
throats than men. The Mexicans look as if they had just emi- 
grated from his Satanic majesty's dominions and by far the most 
unoffending are the poor, the injured, Indians. 

You say that mother does not wish me to hunt on the prairies 
on account of the putrid air and stagnant pools. Oh, she does 
not know the western prairies. They are like the wide and 

^ Andrew Jackson's Postmaster-General. 


balmy sea. They are covered with long grass which undulates 
with the breeze as the waves of the Atlantic, and where there 
is a pool, it is as glassy smooth as Sandusky Bay of a summer's 
eve, which is only broken by the ripples of the swan or water 
fowl which glide over its surface, or by the gentle deer who 
wishes to bathe his heated temples in its pure cool waters until 
startled by the cry of some hunter's hound, he darts tremblingly 
to his lair. 

Pitt, I have found out the origin of the hoax of the death of 
Louis Philippe which you know w^e received last summer from 
Galena. There are in this city several secret societies and one 
in particular, " The Cabites.'* This society the public know 
nothing about and it is not thought of or even spoken about 
except when a notice of the meetings appears in the papers as 
follows : ** The cabitcs will meet at the wigwam or the upper 
or lower cave on the i6th of the 27th moon from the date of 
their formation." Well, about last June a letter appeared in the 
post office for the editors of the Missouri Republican purporting 
to be an express from Cincinnati, containing the most minute 
particulars of the death of Louis Philippe. The editor of the 
Republican immediately got up an extra and distributed it all 
over the city, and sent a number to every steamboat bound up 
the Missouri, Mississippi, and Illinois Rivers and down the Mis- 
sissippi and all through the back country. The hoax was so com- 
plete that all the French tied crepe to the handles of their door 
knockers and went about in mourning, and shut up all the shops 
and places of amusement. Mass was said in the Catholic church 
and a very pompous procession formed to escort the effig)* of 
their late King to its final resting place. The hoax was not dis- 
covered until three days had elapsed and thus it was that the 
Galena Gazette obtained the direful news. It is verv clear that 
the cabites formed this scheme for their amusement. They have 
tried frequently to find out who are the members of this society 
but without success. 

I must close, for I am a going hunting this afternoon. I shall 
have fine fun. Mr. Bool was out yesterday and shot a few 
partridges and two possums. I hope I shall have better luck 


and this evening I attend the dancing school. It is composed 
of a few young gentlemen, about twenty in number, and a few 
French ladies. I hope you will send me in return as long a letter 
as this. If you do not You ! ! ! know. You know !!!!!!! Pitt, 
you know not what good your papers do me. I hope you will 
send them to me every mail. Books are very scarce. You must 
not let anyone see this except mother and father. My love to 
them, Henry D. (and make him write) and all friends. 

Your affectionate brother, 

Jay Cooke. 

On February i, 1837, the lad w^rote to his elder 
brother : 

I know mother feels concern that I may overrun my account, 
but she may rest assured that it will not be done. As for making 
money in St. Louis (that is for me) it is out of the question. 
Everything is very high. Washing $1.00, board $5.00, etc. 
Uncle Erastus says he is surprised that I can think otherwise 
than that Martin Van Buren is the greatest man in our country 
and that in four years my voice will be raised to praise him. 
I hope it will be as he says. He does not give any reason for 
my thinking the better of Mr. V. B. Probably because there 
is none, but only says he is surprised at my want of feeling. 
If he really had reasons for his thinking Mr. V. B. as great a 
man and as much deserving the high honor of president as 
General Harrison, why not explain and defend his idol? You 
must excuse me for meddling with business that does not con- 
cern me, but I have nothing else to write about, you know. I 
was out hunting yesterday (not on the marshy and miry prairies, 
as mother calls them), but upon the undulating and glorious prai- 
ries of Illinois, where every half-mile's walk brought you to 
some shady grove or to the banks of some beautiful and placid 
lake from which a small creek generally flows and empties itself 
into the mighty waters of the Mississippi. I always return from 
the excursion with undiminished admiration for the works of 
creation and also with plenty of game, such as quail, rabbits, 
etc. I believe you take little pleasure in such rambling, Pitt, 


but to me it is pleasure, the greatest I enjoy. The Indians we 
have here are not the squalid and rum-drinking Indians of San- 
dusky's vicinity, but noble, brave, and generous ones, whose 
hearts are bleeding for their country's wrongs and view the 
white man not as a friend but as an enemy; as a viper whom 
they would crush. But they know their weakness. Still, but 
little more of the white man's cruelty and tyranny is wanted to 
goad them on to rapine and murder. The time is not far dis- 
tant when St. Louis will become the theatre of bloody Indian 
warfare and were it not for the different posts of armed men 
in its vicinity, they would have been down upon her in savage 
array to seek redress for their wrongs long ago. I am now 
sitting near the banks of the Mississippi. I have a view of it for 
more than a mile. It shall be the means of carrying me some- 
what nearer my friends next July if I live. 

On February 21, 1837, the fifteen-year-old boy in St. 
Louis wrote to Pitt : 

One thing I don't like is you seem to think more of the pos- 
tage than you do of the letters. I don't mean you, either, but 
mother and father and uncle, etc. I should think a few pennies 
would not be considered [on a letter from St. Louis to Sandusky, 
twenty-five cents was collected, unless it was addressed to Uncle 
Erastus who was postmaster] . It is not right that Uncle Erastus 
should be troubled with all the family correspondence and I 
shall write to you personally hereafter. I have purchased two 
buffalo skins for Uncle Colly [Samuel B. Caldwell]. If you 
want some, I can get them. I can get the best for $10 and others 
from $3 upwards. Now, while I write, I suppose it is as cold 
as Zealand at Sandusky, while here it is as warm as summer 
at Sandusky. Boats of all descriptions are gliding on the placid 
Mississippi, arriving and departing daily. 

On March 17, 1837, J^y Cooke wrote again: 

Owing to the irregularity of the Humbug Express Mails, I 
have not received a letter from you for more than ten days, but 
a good many papers which, by coming a different route from that 


of the letters, have been enabled to reach me. All papers come 
by Cincinnati, Louisville, down the Ohio in steamboats and up 
the Mississippi and the letters have to be tugged through the 
mud and mire of Ohio^ Indiana, and Illinois, besides being de- 
posited in old bams, etc., in bad weather. I expect a great many 
of your letters have been lost in this way. Mr. Seymour we 
expect home to-night in some of the steamboats that are due. 
He has bought a large quantity of dry goods, which he brings 
we expect with him. I shall be able before long to talk the 
French language as good as the Frenchmen themselves. It is 
very hard to learn, much more so than "tiche." I shall be home 
again in June or July. Homesick ? little considerable — got 
plenty of hominy, hoe cakes, etc. I shall, when I come home, be 
like Mr. Seymour — like the cotfish besser an der chuckens. 
Today the postmaster had the politeness to open the newspapers 
you sent, or rather the one I received today, and I had to plank 
over two shillings for each. He says he shall open them all 
hereafter, so you must not write in them, not even my name, 
he says. I gave the old French fool a good dashing. 

On April i8th he wrote: 

I know not how to excuse myself for not writing to you and 
others for the last few weeks. We have been receiving goods 
almost constantly and I could not possibly find time to write, 
and when I did find a few spare moments, before I could finish 
a letter, I would find myself busy again. Mr. Seymour arrived 
here about 28th March in good health. We have a splendid as- 
sortment of goods. All Sandusky's stock would not equal it. 
Tell mother Mr. Seymour won't let me come home. He giwes 
me all I want and something I don't want; for instance, a dirk 
knife and a pair of pistols, but don't be afraid. 

But the boy was soon to come home, w^hether Mr. Sey- 
mour approved of the movement or not, for serious busi- 
ness troubles overtook the firm. Mr. Cooke continues in 
his Memoirs: 

"I remained in St. Louis until the panic of 1837 ruined 


my employers and then, gathering up my belongings 
and having been fully paid my salary, I returned to 
Sandusky with more cash in my pockets, some $200^ 
than any Sandusky boy had ever possessed before. I 
had acquired Southern habits and was a capitalist who 
'felt his oats/ If a boy affronted me I would fight him. 
I was soon cured of all this by a narrow escape. The 
old justice of the peace told my father that if I was 
complained of again for walloping any of the neigh- 
bors' boys, he would have to send a constable for me. 
After this I got into no more scrapes and that winter 
resumed study at Adams' Academy, where I was made 
editor of the monthly paper gotten up in my best style 
upon a fine sheet of double width paper and all written 
out with my own pen." 

In 1833, J^y Cooke's sister Sarah married William G. 
Moorhead, a brother of General J. Kennedy Moorhead, 
long a manufacturer, capitalist, politician, and public- 
spirited citizen of Pittsburg. Young Mr. Moorhead 
was interested, with his brothers, in contracting and 
structural operations in connection with the early rail- 
ways and canals of Pennsylvania, and he had just or- 
ganized a "packet line" between Philadelphia and Pitts- 
burg. By this time, the state rail and water line from 
Pennsylvania's eastern to her western city was complete, 
and passengers and freight were conveyed from the 
Schuylkill Water Works over the Philadelphia and Co- 
lumbia Railroad to Columbia on the Susquehanna, by 
canal up the Susquehanna and the Juniata to HoUidays- 
burgh, thence to Johnstown by a mountain railroad, and 
again by canal to Pittsburg. A number of rival com- 
panies owned their cars and boats, paid the charges for 


the use of the state line, and were bidding against one 
another for goods and passengers ; the latter being con- 
veyed between the two cities in four or five days and 
the freight in about twelve days. The rate for passen- 
gers was $io or $12, while carrying charges on dry 
goods were $1, on hardware $1, and on groceries 75 
cents, per 100 pounds. Nine of the companies later en- 
tered into an agreement to raise these rates to $1.25 per 
100 pounds for dry goods, $1.12^/2 for hardware, $2.50 
for hats, bonnets, clocks, pianos, looking glasses, aqua 
fortis, and gunpowder, and $3 for carriages and willow 

The principal line was Leech and Company's and 
competition with it was rather hazardous on account of 
its overwhelming resources. In organizing his com- 
pany, which was called the Washington Packet Line, 
Mr. Moorhead was assisted by a number of prominent 
Democratic politicians of Pennsylvania, including Gov- 
ernor Porter and several of the Canal Commissioners. 
They obtained their capital from the United States 
Bank, which had just been re-chartered by the legisla- 
ture of Pennsylvania, Mr. Cooke always suspecting 
that the bank accommodated Mr. Moorhead's friends in 
this way in gratitude for their services in extending its 
lease of life. In the spring of 1838, the company's ar- 
rangements being sufficiently well perfected, Mr. Moor- 
head invited his young brother-in-law. Jay Cooke, to 
come on to Philadelphia to serve as a clerk; — booking 
passengers, looking after the placing of advertisements 
and editorial notices of the line in the newspapers, and 
performing other secretarial duties in a shipping of- 
fice. The headquarters of the company were at 83 


Chestnut Street, next door to Congress Hall, a famous 
old L-shaped hotel, kept by John Sturdivant, at the 
northeast corner of Chestnut and Third Streets, with 
entrances upon both of those highways. Mr. Cooke 
was very active in representing the interests of his em- 
ployers, each line making an effort to eclipse the others 
in the attractions of the service offered and in bring- 
ing these attractions to public notice. Soon such an- 
nouncements as the following began to appear in the 
Philadelphia papers: 



The cars of the above Hne leave the depot, Nos. i and 2 Cen- 
tral Block (immediately opposite the West Chester House) 
Broad Street, daily at 6 a. m. via Philadelphia and Columbia 
Railroad and Pennsylvania Canal. Through at least half a day 
quicker than any other line which leaves at the same hour. The 
cars are eight wheeled, which insure safety and were built with 
a view to comfort and convenience. The boats, which are all 
new (this being their first season) are finished and furnished 
equal to any in the state and are commanded by careful and ex- 
perienced captains who pledge themselves to render a passage 
as pleasant and expeditious as possible. There is also a baggage 
room below deck for the accomodation of those who have extra 
baggage. Every exertion will be made by the proprietor to 
render general satisfaction. 

They connect at Pittsburg with a daily line of steamboats 
running to every point on the Ohio, Mississippi, and Missouri, 
and also by stages to Erie and Cleveland on the lake. 

OflBce No. 83 Chestnut Street. 

H. Yerkes, Agent. 
Wm. G. Moorhead, Manager. 


Fare through $io. 

Seats may be taken at the Steamboat Hotel, corner of Chest- 
nut and Water Streets, and at the depot Nos. i and 2 Central 
Block, Broad Street. 

Leech's line had relays of horses every ten or twelve 
miles on the canals, so that jaded animals need not be 
used, thus insuring swifter passage. It could carry 
daily sixty tons of goods, having two trains of ten cars 
each, each car holding three tons or two boat loads. 
Some companies offered boats in which stoves were pro- 
vided for emigrants travelling west, so that they could 
prepare their meals as they passed along. Others had 
boats of unusually light draught to insure speed and 
an "Express Fast Packet Line" finally reduced the time 
to Pittsburg for passengers to three and a half days. 
During the spring of 1838, the bridge at Valley Creek, 
a viaduct of three spans in Chester County on the road 
to Columbia, was destroyed by fire and until it could be 
rebuilt, teams must be provided by the various com- 
panies to haul their freights around it There was, too, 
a serious break in the canal farther up the line, and on 
July 3d Jay Cooke wrote that the company had to carry 
its passengers about 28 miles in stages until repairs 
were made and water communication could be resumed. 

Young Jay Cooke's first impressions of Philadelphia 
were not very favorable, and he was engaged in a busi- 
ness which he did not like, for reasons recited with some 
fullness in letters to his brother Pitt. He had left home 
on March 25, 1838. On May 12th he wrote from Phila- 
delphia : 

I have several times commenced a letter to you but have 
been as often interrupted. When we speak of the devil's doings, 


we always have them before us. . . . This makes the third 
time within five minutes and within that time I have taken three 
passengers but here come some more and I believe TU lay it 
by as a bad job. 

He resumed the letter at ten o'clock in the evening : 

This great city, with its novelty and variety, with its 
stately buildings, churches, parks, ships of war, and places of 
amusement, has no charms for me like those of my native home 
and the deep, silent woods and murmuring streams and blue 
bay, where oft Tve spent my happy days roaming with my dog 
and gun, or rippling the mirred surface with my bark canoe. 
Here all is business and bustle; all are strangers and I have 
wandered for hours along the busy streets and not met with one 
smile of recognition. But it is growing late and already has 
the large bell which struck the first note after the declaration 
of independence, sounded the hour of ten o'clock. The watch- 
man's cries are heard of " all's well " and the mighty multitude 
have sunk to rest. 

Mr. Gooke reached Philadelphia in time to witness 
the burning of Pennsylvania Hall by the pro-slavery 
mob. In a letter begun on May i8th, which, because 
of the excitement, was not finished and despatched un- 
til the 20th, he writes under date of May 19th: 

Last evening when I had written as far as you see, I was 
arrested in my progress by the cry of fire and the usual noise 
and bustle which attend it. I inquired of some of the firemen 
where it was, and being told it was only five or six blocks from 
me, I determined upon seeing it. I shut up shop and when I 
came in the vicinity of the fire, I found it to proceed from the 
large building called Pennsylvania Hall, which had only been 
completed four or five days and was used for abolition meetings 
and for free discussion upon all subjects. It had been set fire 
to by the mob who were furious and much excited. The engines 
were not permitted to play upon the building, but a continual 
deluge of water was showered from upwards of thirty engines 


upon the adjacent buildings; and though in the most central 
part of the city, the exertions of the firemen prevented its con- 
suming or even damaging the buildings adjoining. Upwards of 
70.000 persons were at and near the scene. Every street and 
alley leading to it was thronged by thousands of both sexes, 
and as the intense light reflected upon their countenances, it 
was amusing as well as singular to see their various expressions 
and hear their remarks upon things in general, each one trying 
to make himself the wisest, especially among the colored " Gem- 
men and Ladies " who did not even sympathize with their white 
brothers for the loss of the building. 

On Sunday Mr. Cooke continued his letter: 

The excitement still is very great and last evening the city 
was filled with mobs. The office of the Public Ledger was 
attacked because the editor was bold enough to denounce all 
mobs (though he did not advocate abolitionism) and nearly 
demolished. This office is only one block from me and so you 
see everything that passes. But this will not interest you and 
I will return to things which are of more interest to me. You 
wish to know something about my city life. Well, I get up at 
five o'clock in the morning, make out my way bills, manifests, 
etc. ; then my calls for our omnibuses, of which we have a 
good number to go for passengers in every part of the city and 
take them to the depot. This generally occupies me until eight 
o'clock, when I take my breakfast. After breakfast I generally 
read the morning papers and write what letters are necessary 
(for Mr. Yerkes, the head agent for passengers, is too lazy to 
do it himself). I then go to bank or take a walk in some of tlic 
parks, which are in our vicinity, as we are not much busied 
with passengers until after the New York boats come in, when 
I always have to attend to receive our way bills from New York, 
w^here we have our office, and take charge of the passengers, 
have their luggage taken up to the depot, and show them a hotel 
to stop at over night. We have a half dozen runners to get 
passengers for our opposition line, of whom I have the direction 
when on the dock. The runners of the different lines very often 


fight with each other, and we have to pay the fines when our men 
get into a scrape. I am always busy in the afternoon and until 
eight o'clock in the evening. Take dinner at two and supper at 
eight. After tea I take a walk, go to the theatre or museum 
or sit at my desk, where I have a good view of the throngs of 
ladies and gentlemen who fill Chestnut Street until nine o'clock. 
I am often amused at seeing the city boys, who having scraped 
together a few shillings, spend it in riding in a buggy or on 
horseback and the awkwardness with which thev handle the 
reins (something like an old woman going to market) or set on 
a horse, is truly laughable. A ride is considered one of the 
greatest luxuries in Philadelphia, although they very often get 
a tumble for their inexperience. Our business prospers. Our 
expenses are about $75,000 yearly and our receipts will average 
$150,000. Our stock cost about $150,000. Therefore we shall 
clear fifty per cent, if everything goes on as we expect and we 
have no bad luck. I have already a good many friends, but 
having made a solemn oath to keep clear of all vicious habits, 
I am careful not to associate with any of the young rakes of the 
city until I am certain of their good character. 

On June 8, 1838, the boy wrote : 

You wish to know my reasons for being homesick. In answer 
to your question, I shall divest myself of every prejudice and 
plainly and, I hope, satisfactorily give my reasons. Would you* 
like to remain day after day in a close hot office, engaged in 
one of the most disagreeable duties, that of soliciting passen- 
gers, etc., or to attend the boats at different hours in the day 
and while necessarily contradicting what the opposition men 
say, run the risk of having to be under the disagreeable necessity 
of pulling ofiF your coat and standing a regular set-to? These 
things I am daily liable to and unless I had some of our men 
always at hand, I have no doubt but I should be flying into the 
Delaware some half dozen times in the day. During the day 
I am homesick, but after night, when business is through for 
the day, then I am contented; at least when I can enjoy in 
imagination the beauties of our western woods by wandering 


through the spacious parks with which the city is adorned. Mr. 
Moorhead and I are constantly amusing ourselves the best way 
we can ; eat ice creams, mineral and soda water and confectionery, 
etc. The bells have just commenced ringing for the militia and 
fire companies to proceed to the southern part of the city to 
quell another tremendous mob produced by the murder of three 
whites by three negroes. It is feared by some the mob cannot 
be quelled. I will write again and let you know. 

"Fires and murders, mobs and abolition squabbles are 
every day occurrences/' he continued, and in this way 
too the city disappointed him. "Two taverns, which 
had our sig^s at their doors and took passengers for us," 
he said, were burned. The noise disturbed him. On 
August Sth he wrote : 

What an odd mixture of incidents and sounds form a city life ! 
The first thing in the morning that is heard is the rattling of 
the omnibuses, coaches, drays, ice carts, etc., over the pavement, 
This continues from daylight to sunset and after. " Sweep, oh ! " 
" Fine Peaches ! " " Hot Corn ! " " Coal, Coal, oh ! '' " Scissors 
to grind ! " " Fine melons and apples ! " " Hot Muffins ! " etc., 
etc. Next comes up an organ grinder and hauls up before your 
door and, unless you throw a bucket of water upon him or 
something else as bad, hell torment you with a jumble of tunes 
for half an hour and draw a crowd of gaping urchins about 
your door. Next comes perhaps a fight or a carriage running 
away and perhaps amidst all this confusion the startling alarm of 
fire breaks on the ear and crowds of firemen and engines, with 
bells ringing and loud clamor, flock towards the burning build- 
ings. It is impossible to have any peace until about nine o'clock 
and then you can enjoy yourself. ... I feel much indebted 
to Wm. G. for his kindness to me. He treats me with the 
greatest confidence; allows me to open all his private and bus- 
iness letters, correspond, and write his advertisements; confides 
to my discretion the secrets of the company, leaving with me, 
when absent, the keys of his private treasury desk, and numerous 


other acts of confidence in my fidelity to his interests. He shall 
not regret his confidence in me. All these things tend to form 
me for an active life and an acquaintance with mercantile opera- 
tions, etc. 

But Jay Cooke was to be in at the death of another 
business enterprise. The company failed ignominiously. 
Negotiations, which might have saved it, were pending, 
but they had not succeeded. On September 22nd he 
wrote to Pitt : 

I have just heard from Willy Moorhead. He is in Baltimore 
and will leave for Harrisburg, Pa., in a few days, I believe. 
I have not seen him for three weeks past and do not think I 
shall again in. Philadelphia, unless the Washington Line starts 
again, which is very doubtful, for it would not be safe for him 
or any one else who was an owner in the concern to come into 
the city until they get money to pay drafts etc.. for stock 
which are under protest and in suit. They have been nego- 
tiating with the United States Bank. They will require from 
$12,000 to $20,000 cash to clear things to start again, which 
I am confident they cannot get; so I am almost certain that 
Willy and myself will be trapseing back to Sandusky before 
long ; that is, if we can get enough money to take us there. But, 
upon the whole, I don't think I shall be home before the first 
or middle of December. As the Washington Line had broken 
up, I was left alone in the office without money or anything to 
pay my expenses with and Mr. Moorhead out of town and not 
likely to come in again. Well, I got tired of reading newspapers 
all day, so I began to think of " getting a situation." Well, as 
I was reading in the office, Mr. Sturdivant, the proprietor of 
Congress Hall, which is next door, sent for me and told me, as 
I was doing nothing, that he would give me something to do until 
the line started again or until December, to keep the books of 
his large establishment. Well, we made a bargain and now I 
am in a situation for which Mr. S. had a dozen applicants or 
more and without my even hinting the thing to him. So much 
for having so good a father and mother and other relations and 


the knowledge he had of our family. I have to take charge 
of the bank account and make out and collect bills for board, 
deal with the servants and assistants of all descriptions. I have 
been in good health and am now six feet two inches and a half 
[Mr. Cooke was really about five feet eleven inches in height] 
and as healthy as a rat in a granary. Pitt, what do you say to 
farming next summer? Let's go in partnership with Benny 
and as you are a good inventor of household and field implements, 
we could fit up at little expense. I had rather work than do such 
business as counter jumping or any of the species of " polite 
and genteel " employments. 

His relationship w^ith Mr. Sturdivant continued until 
about November ist. On October 23d, Jay Cooke 
wrote to Pitt : 

I shall not tell you much news until I see you, which 
will be in about a week after you receive this letter. My 
engagement with Mr. Sturdivant at Congress Hall is nearly 
out and I know not where else to get work or I would not 
trouble you with my presence so soon. Pshaw, what a story I 
am telling you. The truth is, I am anxious to get home again. 
That's a fact. I am going to New Castle to-morrow morning to 
get father's deeds recorded. This I should have done sooner, 
but the truth is, I had not a penny in my purse to do it with. 
Now that I have received something from the Washington Line, 
I am happy to do it for Pa. I will write a line from New Castle 
to-morrow afternoon. 

In the same letter he had a message for Moorhead, 
who, with his wife, feared that the young man blamed 
them for "getting him into a scrape.'' Jay Cooke said 
on this point : 

I do not blame or think hard of you or anybody else, but, on 
the contrary, would, if I were where I started from this spring, 
go the whole ground over again. True it has been a disagreeable 
campaign, but it has learnt me more than I would have learned in 
a thousand years in quiet seclusion at home. You, Willy, have 


cut quite a figure in the world this summer and I as your clerk 
have naturally shone a little even in your shade. 

The Sandusky boy, now seventeen years old, had col- 
lected $60 from Moorhead's agent, which was all the 
latter could spare because of an unexpected attachment. 
He owed Farr, the tailor, $12 for mending his clothes 
and for a pair of pantaloons, and now ordered a new 
suit at a cost of $40, which left him $8 to be expended 
on the trip to New Castle. He was promised $40 more 
from the Washington Line and $15 or $20 from Mr. 
Sturdivant, and when he had purchased an overcoat, 
boots, a hat, and a few other articles, he thought he 
might have $35 left to take him to Sandusky. 

Mr. Cooke writes in his Memoirs, in recalling what 
followed: "My advent in Philadelphia had been via 
Pittsburg, Bedford, Chambersburg, and Baltimore. 
I now returned by Leech and Company's line to Pitts- 
burg and thence to Cleveland, where I took a small 
steamer to Sandusky. I was presented by my old an- 
tagonists, Leech and Company, with a pass to Pitts- 
burg. I was well clothed and had a trunk full of pres- 
ents and plenty of cash in my pockets when I reached 
Sandusky and greatly enjoyed this, which proved to be 
my last winter in that place." 



A door or two above the Third Street entrance of 
Congress Hall was the office of E. W. Clark and Com- 
pany, a banking firm recently established in Philadel- 
phia. Enoch White Clark, born in 1802, was a na- 
tive of Easthampton, Mass. When about sixteen, he 
entered the Philadelphia banking house of S. and M. 
Allen and, upon coming of age, was sent to establish a 
branch office for his employers in Providence, R. I. He 
had marked success in that city in advancing their 
pecuniary interests, but subsequently in Boston lost all 
his savings and mortgaged several years of his future 
life by unfortunate financial adventures on his own ac- 
count. In January, 1837, he had returned to Philadel- 
phia, founding with his brother-in-law, Edward Dodge, 
the firm of E. W. Clark and Company. The interest of 
Mr. Clark was two-thirds and of Mr. Dodge one-third, 
the capital, $15,000, being furnished by them in the same 
proportions of two to one. 

When Jay Cooke left Philadelphia in the autumn of 
1838, he told Mr. Sturdivant that he might return in 
the spring, if a favorable opening occurred. While 
keeping the books at Congress Hall, he had made the 
acquamtance of many men whose places of business 
were in the neighborhood. Among those who went in 
and out of the hotel were Mr. Clark and Mr. Dodge, 



who saw the boy at his post and were attracted by the 
quick apprehension, the ready humor, and the cheerful 
self-reliant spirit that we see exhibited, to so marked 
a degree, in his letters home, and which were the traits 
that made him seem one apart from the youth about 
him. In the spring of 1839, Sturdivant wrote to his 
young friend at Sandusky that if he wished to return 
to Philadelphia, Clarks were in need of a young man 
and would be pleased to have him come on to take a 
position in their banking house. 

Jay Cooke again reached the city on April 3, 1839, 
about a year after his first introduction. He would be 
eighteen in the August following. He was "a tall, slen- 
der" young man, who had already seen a good deal of 
the world and had already had his full share of its dis- 
appointments. He had health and strength wliich in 
youth were not given to his brothers Pitt and "the Ma- 
jor," as they called Henry D., both of whom were still 
at their studies. Jay was ambitious, industrious, and 
faithful to each day's duties. In the brokerage and 
banking business, he found the calling for which he was 
naturally designed, and was not long in recognizing 
the fact through the real enjoyment that the occupa- 
tion afforded him. Only one month after his arrival in 
Philadelphia, he wrote to Pitt: 

I take much more pleasure in living here than I did last sum- 
mer, as my new business is much better and I find that my old 
friends have not forgotten me after my short absence. I have 
a number of valuable ones who may be of service to me hereafter. 
A city life, when all things conduce to your comfort and happi- 
ness, is really delightful. Mine is the very height of perfection. 
The business I am engaged in is of the most respectable kind and 
the house is the first in the city. Although I have been with 


them only four weeks, I have now the most responsible station it 
affords. I never was engaged in anything that exactly suited 
me until now. Besides the duties of the office, I am private 
secretary to John Sturdivant, Esq., and manage his money opera- 
tions of $100,000 per annum with all ease and without interfer- 
ing with my necessary rest or recreation. I have a splendid 
room in connection with a young man of Mr. Sturdivant's, car- 
peted, bureaus, mirrors, tables, wash-stands, etc., and a bed to 
myself about eqtial to motlier's in the front chamber. Boots 
blacked, coats brushed, breakfast at eight, dinner at three, tea 
at seven, and sup at eleven p. m. What do you think of this? 
Is it not much better than I could have expected? I have got 
on the right side of fortune in Philadelphia and if prudence, 
punctuality, and good behavior, as far as in my power, can keep 
me there, I shall remain statu quo, as you say, forevermore. 

On May 13th, he was explaming that he had been 
prevented from writing a letter on Sunday by an invita- 
tion to dinner at his **boss, Mr. Dodge's,'' and he con- 

I have the most enviable situation of any young man in the 
city, I believe. My business is one a thorough knowledge of 
which will enable me to get through the world " head up." 
Money is chiefly the object for which all men contend, who often 
misuse it from a want of knowledge as to its true worth and 
character. I am getting to be a good judge of bank notes, can 
tell counterfeits at sight, and know all or nearly all the broken 
banks in the United States of America. I practice a little upon 
my flute and have learnt several fine tunes lately. 

On July 28th, he wrote, indicating some homesick- 
ness and the means he had adopted to ward it off: 

Why do you write to me in such a hurry ? Can it be a task for 
you to write a few lines to cheer your poor brother in his loneli- 
ness ? For, although I am in a great city witli sights and sounds 
with which it would appear impossible to be lonely and have 
friends, and good ones too, still I prize beyond everything the 


slightest news from old Sandusky. It is the point with which 
at leisure times I hold communion. Philadelphia is a better place 
than Sandusky to spend money. I seldom trust myself when I 
go out for a tramp in the evening with less than one or two 
dollars and never have a cent in my pocket when I return. I 
went last evening to the Chinese Museum and I never was so 
much interested in anything in my life. It is indeed a splendid 
exhibition. I learned more of the Chinese nation in that visit 
than I ever knew before, or should ever have been likely to 
know. I stopped in at Woods' and other places on my route 
and had ice cream, fruits, etc., very fine I There is a great deal 
of pleasure in being independent^ in having at your own control 
what little you have in this world. 

On August 9th, he wrote to Pitt : 

You will want to know how I am, I suppose. I am the same 
jolly, happy boy I always expect to be. By the by, tomorrow 
is my birthday, — eighteen years old the tenth day of August, 
1839. If I ^^s ^^^y ^ S^^h I should be of age. I am glad I 
ain't, though ! 

On August 14th, he wrote again to his brother Pitt : 

I wish from the bottom of my heart, as the saying is, that 
I had you here with me for a few days. The way I would 
gallant you about to all our places of amusement, etc., would 
be just what I should like. One evening last week I went to 
see a new play at one of our theatres called " The Lion King." 
It is one of the most thrilling and beautiful pieces I ever saw. 
Tigers, lions, leopards^ etc., are introduced in many of the acts. 
In one of the scenes a large tiger darts upon a sleeping captain 
of banditti, from a den in a ledge of rocks nearby, and after 
a fierce conflict the animal is overcome by the sturdy robber. 
In another scene " The Lion King " drives a large fierce lion, 
harnessed to a car, up a hill in full view of the audience. The 
play is intermixed with songs, dances, battles, and the usual 
quantity of love. Besides our theatres^ we have every other 
kind of amusement at this season of the year. But I suppose 
you do not care for them. I am more and more pleased with 


my new business and consider I need not fear for this world, 
as a knowledge of my business cannot fail to make any one who 
tmderstands it at least comfortable. As you lawyers never ex- 
pect to be worth much, I shall have the pleasure some time of 
helping you out of trouble perhaps. Castles in the air. Heigh 

Writing home October 6, 1839, he said: 

As I am paymaster-general of Mr. Sturdivant's forces, I am 
looked upon by one hundred " nigs " as lord of creation and 
meet a salaam from all of them when passing by them. If at 
breakfast, dinner, tea, or supper, I am sure of getting the best 
of everything and in this way I have a great advantage over 
all the young fellows who board here. It is amusing enough 
sometimes to lay upon your oars and take a view of the dining 
hall and its occupants. Here will be seen a fat Cit, who has 
luckily got opposite to a large pig and who is belaboring it with 
all his might, while a dozen others are waiting anxiously for a 
chance at him. A little way off sits a hot-blooded Southerner, 
swearing at the darkies for spilling the champagne on his pants. 
His next neighbor has seized upon the only roast fowl within 
reach and appropriated the whole of it to his use. A Virginian 
nearby, unused to the luxury of an Irish potato, has taken the 
whole half-dozen and pushed over to the gaping paddy opposite 
the real Virginia sweeties, who swears by the powers, if they 
don't bring him " some raal praties," he'll " lave the house." 
Far down in the hall at the numerous tables can be seen every 
variety of people: — the Yankees, the western merchants, the 
pretending Spanish noblemen, with their liveried servants at 
their backs, etc., etc. I enjoy the scene sometimes very much. 
. . . For the first time since I have been in the city this time, I 
took a ride last Wednesday in a buggy and drove down to the 
junction of the Schuylkill and Delaware, and all along the beauti- 
ful banks of the Schuylkill, and amidst the handsome palaces 
and country seats that adorn the suburbs. There are some of 
these palaces and castles which kings might own and be proud 
of and everything about them resembles the residences of the 


highest monarchs of the old world. . . . Oh, this is indeed 
a delightful city and the more I see of it the more I like it. 
There is always something new to be seen, and if you were to 
walk every evening for a year, you would still find numerous 
parks, public gardens, and private streets that were perfectly 
new to you. 

On Christmas Day, Mr. Dodge again invited the 
Sandusky boy to dinner. "Mr. Clark and all our com- 
pany were there and we had a jolly time/' he says in 
reporting the event. "Messrs. Clark and Company are 
none of your stiff, unsociable men, but are full of fun 
and frolic and like to have others enjoy themselves too. 
We drank healths, etc. Mr. Clark gave a toast, *A 
health to absent friends, circling from the shores of 
Lake Erie to the happy valleys of New England.' We 
remained there until about six o'clock, when two of my 
young acquaintances and myself thought to wind up 
the day by witnessing the great performance at the 
Chestnut Street Theatre, where we went and shook our 
sides until eleven o'clock. On New Year's Day we are 
invited to Mr. Clark's." 

On New Year's morning, 1840, he writes to Pitt, say- 
ing that Mr. Clark had handed him an order on the best 
tailors in Chestnut Street for a complete suit of clothes, 
"the best I could procure, and told me to get such a suit 
as I wanted and never mind expense. What do you 
think of that? As I do not need new clothes this win- 
ter, I shall wait until spring before I make my choice. 
It would be something strange in old Sandusky to re- 
ceive a gift like this." 

The business of Mr. Clark's banking house developed 
rapidly and Jay Cooke's letters to Pitt show how soon 


he won the complete confidence of the heads of the firm. 
On November 17, 1839, ^^ wrote: 

These are funny times here and my bosses are making money 
fast. This business is always good and those who follow it 
always in time become rich. I shall stay here until I am twenty- 
one and then go into business myself; and, even if I have not 
much money to start with, I shall have plenty of friends to 
help me. I am not afraid but that I shall be able to help myself. 
Major, you and all the rest who follow such scarecrow profes- 
sions. But really, boasting aside, I am fortunate in getting into 
this new business and have no hesitation in considering my 
fortune made. Five years since [ ?] my employers came to this 
city and opened their office. They were then known to few 
and had little capital. Now they are the first brokers in the 
city and have the unlimited confidence of the banks and mer- 
chants. They crept along honestly and honorably with what they 
had. Rich merchants who had more money than they required in 
their own business, lent it to them and, what was more, lent them 
their names as references; and now they are doing a business 
amounting to millions in the year, and giving a clear profit of 
$40,000 or $50,000 a year. Frequently in some great operation 
they pocket $500 a day. 

On January 22, 1840, the young banker wrote: 

Our office is continually crowded with customers and we do 
a tremendous business. We buy and sell at from one-eighth to 
one-quarter for commission and thus in doing $50,000 per day 
you will see it pays well. We often make one per cent, on a 
large amount in one day, thus increasing our capital three and 
one half times in one year; but at the common rate of one 
quarter per day, which is about an average, we nearly double 
our capital in one year. We keep money all over the United 
States. Every mail which leaves the city for the south, west, 
north and east bears rich packages, the proofs of our enterprise. 
It requires a large capital to keep this mass of money con- 
tinually floating over the country, as you can well imagine. Of 
late I do almost all the corresponding. Messrs. Clark and Dodge 


leave the office very frequently after the bank hours, and leave 
me to settle cash, write letters, etc. The other clerks do the 
copying, etc. 

In a letter dated February 28, 1840, he said: 

I write so many business letters that I almost lose the form 
and spirit of a private one and should my business way of 
expressing things, etc., be displayed, as I doubt not they fre- 
quently are, you can lay the fault to the right cause. I write 
some days 15 or 20 letters to all parts of the United States, and 
more than both of my bosses do. At this season of the year, I 
get up at half-past seven, take breakfast at eight, then go into 
the counting room and there am busy as a bee until three o'clock, 
when the banks close and I go to dinner. After dinner I am busy 
until six o'clock, when I leave the office, take tea, do what little 
writing I have to do for Mr. Sturdivant, then take a walk up 
Chestnut Street or anywhere else my mind leads me to. At 
seven all the places of amusement are opened and we have our 
choice of every variety. I am getting indifferent to them and go 
seldom. Supper is on the table at any time from nine to 
twelve at night. I generally begin to dream of home about ten 
to twelve o'clock. ... In my position I can see and have a 
broad space for observing the different nations of men. Among 
our customers are men of every age and of every position in 
society, from the hoary miser to the dashing buck who lives upon 
his thousands. Through all grades I see the same all-pervading, 
all-engrossing anxiety to grow rich, to snatch from the unwilling 
hand of fortune that which her caprice will never permit her to 
grant them. This is the only thing for which men live here. 
How they do in the country I know not, but I see enough to con- 
vince me of this fact. ... I look upon riches but as naught 
more than the means whereby one can display his social and 
generous spirit, and, if I should ere be the one I may be, I'll 
be a friend, a man. 

On November 24, 1840, he wrote: 

The broker's business is always pleasing and I shall never get 
tired of it. I have pretty much my own way and they entrust 


me with the most important parts of all their business. My 
salary is unchanged and I don't care for it until I am twenty- 
one. I could have more if I asked for it, but I don't choose 
to do so. The knowledge I am gaining of business is worth 
a mint to any one. When I am twenty-one, I shall make a bold 
stroke and go ahead. As for my money affairs, I know mother 
is curious to know a little about them. I am a little extrava- 
gant and am about square so far, but shall be more saving in 
future. I am obliged to dress well, and in the city $300 don't 
go far, especially as there are many extras. 

The account of the young man's relations with Mr. 
Clark and Mr. Dodge is continued in his letter of De- 
cember 20, 1840, to his brother Pitt in Sandusky. He 
writes as follows : 

Christmas and New Year's are now but a few days off. My 
Christmas dinner will be at Mr. Clark's, and on New Year's at 
Mr. Dodge's, with plenty of fun and frolic during the day, egg- 
nog at Congress Hall and theatres in the evening. Mr. Sturd- 
ivant's custom is to have immense quantities of egg-nog manu- 
factured "free gratis" every New Year's and Christmas. The 
business of the office continues to devolve very heavily on 
me. They are glad to be spared the trouble of which I lighten 
them, and I frequently have fifteen or twenty letters to write 
before tea, all of which I am aware is to their satisfaction. This 
responsibility I of course am pleased with. They have fre- 
quently done a heavy business during the day and gone off to 
dinner after overdrawing the bank account $80,000 or $100,000, 
leaving me to make it up before three o'clock. Sometimes it 
happens that we have exceeded our means 10, 20, 30, or 50,000 
dollars and I am obliged to borrow it of other brokers, not 
always without difficulty. I have frequently been put to " my 
stumps " when money has been scarce, but have always suc- 
ceeded, they probably not knowing whether they were short or 
over. We are doing a very heavy business at present. We have 
over $180,000 on hand in Mobile and Alabama funds, all of 
which when disposed of will pay a smashing profit. 


In eighteen months after entering the employ of the 
house, Mr. Cooke was clothed with power of attorney 
to sig^ the name of the firm and on January i, 1843, ^^ 
the age of twenty-one, he was admitted to partnership 
with a one-eighth interest, which was taken from the two- 
thirds of E. W. Clark. "I have never heard of a sim- 
ilar instance," said Mr. Cooke with some pride in later 
years, "where one so young and without capital, or other 
influence, so speedily attained such an honorable posi- 
tion." Under the circumstances, these words seem to 
spring from no vain sense. Such progress was in truth 
remarkable. But the firm itself was advancing rapidly. 
In November, 1842, Mr. Clark with his brothers, Joseph 
W. Clark and Luther C. Clark, and Mr. Dodge, each 
of them having a one-quarter interest, formed a St. 
Louis house, known as E. W. Clark and Brothers. On 
the 1st of January, 1844, Jay Cooke became a partner 
in that firm, his interest being one-eighth of the half in- 
terest of E. W. Clark and Edward Dodge. In the au- 
tumn of 1844, a New Orleans office was opened under 
the name of E. W. Clark and Brothers and Farnum, E. 
W. Clark and Brothers of St. Louis and George W. 
Farnum being the partners. The capital was $50,000. 
Affiliated with this chain of houses, was a Boston 
branch, J. W. Clark and Company, in charge of Enoch 
Clark's brother Joseph; and in August, 1845, ^ ^^^^v 
York office was opened, under the name of E. W. Clark, 
Dodge and Company, J. W. Clark and Company of Bos- 
ton having a one-fifth interest. New Orleans one-fifth, 
St. Louis one-fifth, and E. W. Clark and Company of 
Philadelphia two-fifths. This house was established 
with a capital of $500,000, which was furnished by each 


partner in the above given proportions. E. W. Clark's 
and Edward Dodge's interests were equal and Jay Cooke 
was assigned a one-eighth interest in their combined 
shares. In 1846 the New Orleans office was closed and 
its interest in the New York house passed to E. W. 
Gark and Brothers of St. Louis.* The Clarks also had 
branches for a short time in Burlington, la., and 
Springfield, 111. 

For both Enoch W. Clark and Edward Dodge, Mr. 
Cooke's love and respect were deep and enduring. 
"They were," said he, ^'generous and noble men and I am 
proud to recall that their affection and confidence were 
extended to me during all our business connection and 
during all their lives." Mr. Clark's two sons, Edward 
W. and Clarence H., received many of their first lessons 
in business from Jay Cooke, who was often to be seen 
with one or the other of the lads holding his hand, 
as he went in and out of banks and brokers' offices in 
Third Street. On January i, 1847, Edward W. Clark 
was admitted to partnership, but in the Philadelphia 
house only, he taking a one-eighth interest, which was 
subtracted from his father's share. The shares, until 
Clarence H. Clark came into the firm, were as follows : 
Enoch W. Clark, ten twenty-f ourths ; Edward Dodge, 
eight twenty-f ourths ; Jay Cooke, three twenty-f ourths ; 
and Edward W. Clark, three twenty-fourths. 

In those days there was a newspaper in Philadelphia 
called the Daily Chronicle. It was published by Colonel 
Alexander, who in 1834 sold it to a young Scotchman, 
James Gordon Bennett. He in turn soon disposed of it 
to the proprietors of the Philadelphia Inquirer, going at 

^ From a pencilled memorandum in Jay Cooke's papers. 


once to New York to found the Herald. Colonel Alex- 
ander established another Daily Chronicle on May 4, 
1840, his office being at the corner of Chestnut Street 
and Franklin Place. He was one of E. W. Clark and 
Company's depositors, and in this way met Jay Cooke, 
who was asked to write a daily money article for pub^ 
lication in the new paper. Mr. Cooke does not neglect 
to mention this interesting experience in his Memoirs, 
saying : 

"I wrote a column every day for about one year, pre- 
paring the material at spare moments during the day, 
and collecting the items from our large correspondence 
and from our daily experience in the detection of broken 
banks, counterfeits, altered notes, etc., also quoting 
from our exchanges, foreign and domestic, the items of 
news as to the prices of cotton ?ind grain, the condition 
of exchanges in different parts of the country, etc., etc. 
This experience was very serviceable to me, but was 
rather more work than I should have undertaken, in ad- 
dition to the responsible position I held in the banking 
house. I gave it up after one year's experience. Dur- 
ing that time I was a member of the Press and the usual 
free facilities were granted me to the theatres and 
operas and other places of amusement, but, owing to my 
close confinement in business, I could very seldom avail 
myself of them. About this time the New York Herald 
contained a brief reference daily to money matters and 
exchanges, and one or two newspapers in the South and 
West copied my articles, adding information for their 
own localities. With these exceptions, I think that the 
articles of mine in the Chronicle were all that were pub- 
lished at that early date.'' 

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BnklBMifAaaBouoecd. Ji"^" 

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Maw Tofkaad Botton Atnda; prtcai tnn al 8|la} 
KewTME,aad 5|to6 Bofton. Southern Auiia gao* 
onllj lenala with liule alteration; Oeocsia fuoda ai« 
fmrlagwoc8a:Aa$uiu7|te8; Savannah Btof. Tte 
omooat in the mariiat ia amall. Bxchai^ In Charter 
loo en K Y^ hae advanced 1 per cent. BrDkais are 
buying Soath Caioliaa and Cbarteiton noiaa at abooi 
par, and checka on Chartratan at i to 1 pmnhim. 
TaoMi a tf. wore in market, and Anda ready aaleec 
|0|andll; Alabama notveiy plenty; Bank nateaS 
la SI; Mobile cenlAcatea 7|. Ceoaiy ^ f 18^1 
Maw Odeana checka 8i to 3; Bank notea 3i to 4. 
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naio plrmy ' in 8u Louia the Broken cheek aid piaaB. 
4Bd la LaulavUle and ClnelnaaU 9 la 3A paan. 
' W> hatib aa yal, ne ■talw n ao l ef Ula c e n d h ton of the 
Baika Conatj Bank, and alchengh we have nile many 
laquiftcB, are unabM to give any Inlbrmatioo rea- 
pactlag it. The noiaaaell at(hmtl5 loVper cenL 

- ' A lai|e amoantof cheeka on the United Stateo Bank 
Mid ao Stewday al I dlaceunL The difficulty increaaaa 
dally, and tone change muit noon uke place. 

Tliecfiyef Bakimoraie flooded with ahin pUatcia 
Mdinallooieo, emanating rramRaiifoad and Canal 
Cm^ooIw, Savlagi lasUtatioQa and private iodivkl. 
Iria. Maayof thcaeeufpicloueand unlawful touea, 
owliVlo onr want vt anull nM% flad a circulation in 
•weky. IfeorcUiaeoa countenance their ciruilatien, 
•■ddaaoiiHeaome aneana ta drive them fton aoMng 
H^ika raMoaptioo day will find their pockeceAl!ed 
trtdlvatartcaatitih. In addiiiaoia the above, are the 
fmVmm cf the Rcnilnc Bailroad Compaoy.apd Ka. 
slaMi Coal Company. By the Ba«em nail we have 
tho Mvt of the fhanra of the dioeoid Book, CaoMid, 














10 b« 






The young Philadelphia banker also mentioned his 
newspaper post and its attendant privileges in his let- 
ters to Pitt Cooke. On June 7, 1840, he wrote: 

I have but little time to devote to my own affairs. I am busy 
from eight o'clock until seven or eight in the evening, and often 
later. If I go to any place of amusement, I drop in about eight 
or nine o'clock and see enough before twelve o'clock to refresh 
my business faculties, and bring them to a par with the rest of my 
mind, and thus keep my temper even. I really believe you would 
not know me now, Pitt, The confinement of a city has bleached 
me to the color of the white rose. The ruddy, sunburnt com- 
plexion I used to have is all gone and my whole person is vastly 
changed — all except my heart. Under the patronage of Colonel 
Alexander, the editor of the Weekly Messenger and also of the 
Daily Chronicle, I am admitted free to all theatres, museums, 
public gardens, etc., and when I wish to and have time to enjoy 
myself a little while, I stalk in as independent as you please, a 
privilege which few enjoy. 

On December 20th, he wrote: 

My head is scarcely " out of the woods " at this moment, as I 
have just concluded rather a lengthy article on finance, etc., which 
has occupied me since tea-time and which will be duly furnished 
you in the columns of to-morrow's Chronicle. I have been read- 
ing to-day the life of Oliver Cromwell and also some lighter mat- 
ter from Graham's Magazine (formerly Burton's and Casket), 
the January number of which was given to me by one of the pub- 
lishers. I will send it to you. The engraving of the Playmates 
[a child and a dog by Sartain] is indeed charming and beautiful. 
The article, " My Progenitors," [a thoughtful essay by S. W. 
Whelpley, A. M.] is interesting and I have often thought I should 
like to be acquainted with the most remote and original link of 
the chain of which I as yet am the last. My leisure time the last 
week I have employed in reading mostly. I intend to give more 
attention to this than formerly. I have purchased several new 
volumes, among them Bums's and Scott's works, Popish Church, 
etc., and I intend to buy some of the most useful classical works. 


The lad missed the dancing and the society of his 
girl friends in Sandusky, concerning whom he ex- 
changed many confidences with Pitt, being still full of the 
merry zest of boyhood, a happy season which was being 
much trenched on by the stern demands of his business 
life. Sometimes he distrusted them, but his sister 
Sarah was an exception and made him "half inclined 
to believe that women are not such vain and hdllow- 
hearted creatures as some persons represent them to be." 

On September 22, 1839, he wrote blithely to his elder 
brother : 

I am sorry you do not mingle with those whose hearts leap at 
the merry sound of music and gather health and enjoyment from 
the excitement of the ball room. Oh, Pitt, you may laugh as 
much as you please at the idea of there being any pleasure in 
bouncing and flouncing about a ball room to the music of the 
homely fiddle, but you know not what pleasure and real excite- 
ment there is in it. To take the soft hand of your fair partner in 
yours, to steal soft looks from her " orbs of soul " and to know 
that she is yours for the time, is pleasure. Aye, how I have en- 
joyed it from my very heart and hope to again. 

In another letter he says: 

Tell the girls I am very sorry I cannot dance with them this 
winter. I should like to have been at the grand ball. The only 
dancing I have is with my room-mate Paul, whom I am teaching 
the " polite art " in its various branches, at the same time keep- 
ing my own hand in. 

With his combined duties at Clarks, at Congress Hall, 
and as the writer of Alexander's money articles, Mr. 
Cooke was taken rather seriously ill in the summer of 
1840. His various employers were very kind and at- 
tentive to him in this sickness and came often to see 

him. Sometimes, he wrote, seven or eight persons were 


in his room at once. He was attended by Dr. Jayne. 
For this and- other reasons, he was not able to return 
to Sandusky for a visit, as he had hoped, and was now 
indeed in the way to become a true and life-long Phila- 

The money system of the country when Jay Cooke 
first entered the financial arena, was in a singular state 
of derangement. Clay's bill to recharter the second 
Bank of the United States, of which Nicholas Biddle 
was the President, had been passed by Congress while 
Eleutheros Cooke was a member of the House of Rep- 
resentatives ; but Andrew Jackson had vetoed it. Upon 
this institution, which had so unfortunately excited his 
misguided but implacable hatred, all the bitterness of a 
strange soul was concentrated. He lived and served 
only to compass its destruction. Denouncing it as "the 
scourge of the people," he at last resolved upon a with- 
drawal of the government's deposits, which was ac- 
complished in 1833. Naturally, loans were called to 
meet the demand for money, industries languished, 
wages and prices fell, and a series of lean and uncer- 
tain years ensued. In 1836 the bank was directed finally 
to wind up its affairs, but Nicholas Biddle had taken 
up Jackson's gage of battle, and, failing to obtain a re- 
newal of the national charter, appealed to the legislature 
of Pennsylvania for privilege to continue it as a state 
institution. Thus was founded the Bank of the United 
States of Pennsylvania, which became the trustee of the 
National Bank, now defunct. Instead of closing its 
doors at the appointed hour, its notes were reissued, its 
officers continued to use its books, and complications of 
a serious nature resulted at once. The national govern- 


ment appointed agents to treat with the new corporation, 
but it was not until 1840 that all its claims were settled 
and the national interest in the enterprise was entirely 
eliminated/ Its capital as a state bank was just what 
it had been under the national charter, $35,000,000, and 
it continued to be the leading financial institution in a 
city which thus far had held an unquestioned place as 
the money centre of the country. At this time Phil- 
adelphia had some twenty smaller banks, included in 
the number being the Girard Bank, with a capital of 
$5,000,000, and Robert Morris's old bank, the Bank of 
North America, which was chartered by Congress in 
1 78 1 and through which he managed many of the dif- 
ficult financial operations of the Revolution. What- 
ever aflfected the United States Bank disastrously was of 
national meaning, and its misfortunes were particu^rly 
fruitful of consequences for the financial community in 
Philadelphia in which Jay Cooke was making himself 
a factor of importance. 

Everywhere there was a plague of state banks great 
and little, issuing notes, practically without regulation 
upon insecure and unknown assets, which often con- 
founded every legitimate expectation of business men. 
There were "runs," failures, sudden and frequent sus- 
pensions of specie payments, counterfeiting, and other 
symptoms of deep-lying disorders. In 1841, the United 
States Bank of Pennsylvania was forced to close its 
doors. The terms upon which it had obtained the new 
charter whereby its officers aimed to circumvent Jack- 
son's designs, were costly. Large bonuses accruing to 
the advantage of turnpike and canal companies, the com- 

» Ralph H. C. Gittcrall, The Second Bank of the United States, 


mon school system, and other enterprises, were required 
of the bank and with these onerous obligations in a 
deranged period, its ruin was inevitable. With such 
disorganization ruling in the regularly chartered bank- 
ing system of the country, these years became a harvest- 
time for brokers and private dealers in money and ex- 
change, if they were deft and astute. They were the 
agents for the management of practically all the im- 
portant business transactions. Jay Cooke used to re- 
call that "the largest portion of the collections passed 
through their hands." Through them vast quantities 
of currency were sent home for redemption. "Nearly 
all the out-of-town bills receivable were entrusted to the 
brokers for collection," said he, "and the great bulk of 
the borrowing, on the part of merchants and oth- 
ers, was accomplished through the brokers. All deal- 
ings in foreign exchange, in gold and silver, etc., were 
negotiated by the private banking and brokerage houses 
and most of the drafts on New York, Philadelphia, 
Boston, etc., were obtained through the brokers. I have 
seen and passed through periods, extending over two or 
three years at a time, when the bulk of the business 
paper was discounted by brokers at from nine to eight- 
een per cent, per annum, and during these periods we 
had frequent suspensions of specie payments when all 
exchange would be thrown into utter confusion. The 
premium on gold and silver rose to fifteen and twenty 
per cent., and the discounts upon currency, which con- 
stantly varied, fluctuated from one to twenty per cent. 
It was a grand time for brokers and private banking." 
Jay Cooke's earliest connection with E. W. Clark and 
Company was as a polite, quick and skillful money 


changer. For this important work he exhibited much 
natural capacity and in this department he soon proved 
his value to his employers. One of his first duties as a 
clerk, he recalled, was to visit the Bank of the United 
States daily, "presenting to Mr. Patterson, the courteous 
paying teller, a bundle of checks on the bank," request- 
ing United States bank notes for the same for remit- 
tance to New York. "Afterwards,*' said Mr. Cooke, "wc 
had large dealings with the bank in purchasing silver 
and gold for it to replenish the drain made upon it 
through the redemption of its five-dollar bills, a con- 
dition of its charter being that it must never suspend up- 
on this denomination of issue. In one period of about 
two weeks we purchased for the bank upwards of a half- 
million dollars in coin, carting it up to the bank late at 
night to escape attention. After its first suspension, as 
it was not generally known that it redeemed any portion 
of its circulation, we made considerable sums by pur- 
chasing the five-dollar notes in the diflferent markets of 
the country and collecting the gold and silver for them 
at the bank, the premium at that time rising to above 
twenty per cent." 

One who often saw the young clerk at his post during 
this period has written out his recollections of the finan- 
cier in the role of a "wild cat" money changer. He 

To the writer as a boy, Jay Cooke was a revelation. Never 
before had he seen one so deft in the business of handling money, 
nor yet since, and he has seen, through life, almost countless 
counters of money. Jay Cooke surpassed them all. With light- 
ning rapidity, the notes passed through his delicate fingers. There 
was nothing mechanical about it. There was no hesitancy, no 
pause, apparently, no thought, or mental effort. It was as a 


smoothly flowing stream of noiseless water, so equally and un- 
interruptedly did the operation of counting go on. There was 
no counting over; one count was sufficient; and it was all so 
easily and gracefully done. There was no fluster, no perturba- 
tion, no thought apparently of a mistake being possible. As he 
counted he could talk also. He both asked and answered ques- 
tions, briefly of course, but the like I had never seen and it as- 
tonished me. I have never seen it since as Jay Cooke did it. 
It was the airiness of his manner, coupled with his 
bright young gracefulness and self-containedness, that claimed 
and riveted my youthful attention. 

As I write I see him in imagination as I saw him then in his 
young manly beauty. Cooke, as I recall him at that time, was 
tall, slender, light-haired, blue-eyed, fair-complexioned, and of 
radiant countenance. I know not with what word I can better 
describe the smile of the mouth and the eye, the ever present 
winsome and intelligent expression resting upon that unusual 
face, which always met you silently but always so pleasantly. 
Brightness and cheerfulness characterized his whole personality. 
Every movement, every step, every motion of hand and arm, was 
a bright one. 

It is one thing to count new crisp notes ; it is another to count 
dirty ragged " wild cat " money-notes, old and not pleasant to 
handle or look upon. Such was the money the writer saw Jay 
Cooke receive and count at the broker's counter. There were 
two counts to each individual — the miserable money handed in 
and the better money handed out. With equal facility, however, 
the great financier that was to be, passed the two through his 
deft fingers. Dirt, raggedness, forlornity seemed not to delay 
manipulation or clog mental activity. All was fish that came to 
Cooke's counter. The scalier the fish, or notes, the less valu- 
able of course, the difference in value being shown by the per- 
centage charged for exchange of good for bad money. The 
banks would not take " wild cat " on deposit. Merchants who 
were in receipt of that kind of currency in payment of their bills, 
were therefore obliged to sell them over the brokers' counters in 
order to make their bank deposits. For hours before the banks 


closed their doors, a long row of hurrying boys and young men, 
with those older in years also, were ranged before the counters 
of the principal brokers with their varying piles of depreciated 
money. Those who were late were very hurried. Anxiety was 
depicted on the countenance of each individual lest he might have 
the bank doors shut in his face and his deposits for that day 
would fail. But this anxiety on the part of the " lates " did not 
disturb young Jay Cooke. Nothing ever seemed to disturb his 
equanimity. He received, he counted, he handed back, with easy 
cheerfulness and serenity. If any failed to get their deposits in, 
it was no fault of Jay Cooke. His work was done both accu- 
rately and expeditiously. Cooke as he stood exchanging " wild 
cat " for " par " was the personification of affability and business 
rapidity. He was the admiration of the patrons of E. W. Clark 
and Company.* 

A prominent Philadelphian of this day recalls the oc- 
casion upon which he went into the office of E. W. Clark 
and Company with some "wild cat" money. "Where is 
the counterfeit clerk?'' Enoch W. Clark called out in Jay 
Cooke's absence from the place of duty, and thus brought 
him back to his post. 

Mr. Cooke had many interesting memories of this 
crude period in the history of American finance. "In 
these early days," he writes in his Memoirs, "the banks 
of Philadelphia opened at nine o'clock in the morning and 
we had no half-holidays on Saturday, as at this time, and 
many fewer legal holidays ; the Fourth of July, Christ- 
mas and New Year's Days were, I think, all the holi- 
days that were legally observed. The brokers found it 
necessary to be at their offices at eight o'clock and re- 
mained there frequently until eight or nine at night. 
Immense quantities of uncurrent bank notes were to be 
handled, distributed, and mailed each day; the mass of 

»N. D. S. in Newtown Enterprise. 


silver and gold must be counted and shipped, collections 
and drafts were to be mailed, and large numbers of let- 
ters were to be written, all their tasks keeping the men 
busy from early in the morning until quite late in the 
evening. We had in those days no telegraphs, tele- 
phones, express companies, or ocean steamers; no post- 
age stamps, city deliveries, or registered letters/' 

To the telegraph, however, the country was not long 
to be a stranger and Mr. Cooke's early acquaintance 
with an invention that he was to use so freely in his 
great financial operations in later years, is the subject 
of some passages in his Memoirs. He says : 

"Henry O'Reilly, in the first days of the successful 
operation of the Morse telegraph, was the most promi- 
nent builder of telegraph lines, particularly of those rim- 
ning westward. He frequently came to me at E. W. 
Clark and Company's for financial aid. I was always 
able to assist him and therefore readily granted the re- 
quest that mine should be the first telegram to be sent 
over the mountains when the line reached Sandusky. 
One morning he came to our office and told me he was 
at that moment ready to fulfil his promise. I hurriedly 
wrote a message to my father and in a few moments re- 
ceived his reply, the first over the wires from that point. 
It seems that my father was on the point of starting for 
Norwalk, a town sixteen miles south and the county seat 
of Huron County, to attend a meeting of the Firelands 
Pioneer Association at which he was to deliver an ad- 
dress. He took this telegram with him and at the 
proper point in the course of his speech, after a preamble 
reminding the audience of the fact that in the earlier 
time, it was weeks before a letter could reach them from 


the East, and that even then many days must pass in 
transit, he drew from his pocket my despatch, telling 
how he had received and answered it, the reply reaching 
his son in Philadelphia in less than half an hour. This 
episode caused a lively sensation at the meeting, and all 
were eager to scan the despatch, to ask him questions, 
and comment upon the wonderful inventions of modern 

O'Reilly, the promoter of telegraph lines, was not the 
only noted character that visited Clark's banking house 
in those days. Another interesting personage was 
Francis J. Grund. "He was a famous newspaper cor- 
respondent and lobbyist," Jay Cooke says, "and pos- 
sessed a faculty of getting at and developing secrets of 
every kind, especially if they related to financial legisla- 
tion. The secrets of the President and the cabinet as 
well as of the Senate and the House seemed to be open 
to him. Grund purchased, through our office, large 
amounts of the various kinds of Texas debt certificates 
and bonds and many of the government officials of the 
time did likewise. The republic of Texas in its struggle 
for independence from Mexico had issued bonds and 
certificates in great variety, amounting in value to ten 
or fifteen millions of dollars. A scheme was on foot to 
make Texas a state of the Union and a bill was finally 
passed, providing a contribution on the part of the 
United States of $5,000,000, to be applied to the ex- 
tinguishment of the old debt. Some of this debt, owing 
to the peculiar conditions of issue, was paid in full; 
other portions were scaled down and a correct knowl- 
edge of what all this legislation was to be was always in 
the possession of Mr. Grund, and he and his friends 


availed themselves of it in making their investments. 
This arrangement failed at the first session and the 
bonds and scrip declined in value very rapidly; but at 
the next session of Congress the bill was passed and 
large sums were realized by those who were directly and 
indirectly interested in obtaining the legislation for final 
settlement." Mr. Cooke always believed that the 
Northern opposition in Congress to the addition of this 
large area of slave territory to the national domain was 
overcome through the selfish exertion in their own in- 
terest of the holders of the Texas debt certificates, 
many of whom were influential Northern men. 

But the most picturesque figure of the time, among 
the number that Jay Cooke saw at E. W. Clark and Com- 
pany's, was a great beef speculator from Virginia, J. B. 
Steemberger. "Nicholas Biddle, Cowperthwaite, Lard- 
ner, and the other high officials of the United States 
Bank," says the financier in his Memoirs, "were the 
victims of a numerous horde of borrowers, who seemed 
to be able to obtain from the bank all they asked for." 
Steemberger was attracted to the city by hope of large 

"His operations in the purchase of cattle in Virginia, 
Ohio, and other states," Mr. Cooke continues, "were 
vast, amounting, in fact, to an entire monopoly of the 
business of supplying beef to the eastern cities. He 
forced the price of beef up to thirty cents a pound when 
the consumers rebelled and by general consent ceased 
to purchase from him. Like all such attempts to 
monopolize, his was brought to ignominious failure, and 
as his losses must have been enormous, I presume the 
United States Bank, whence he obtained all his funds, 


was a great loser. When he found it impossible to get 
cash advances from the bank, he would give it his note 
at four months with interest, and take from it in pay- 
ment its twelve months' post notes in denominations of 
$i,ooo, $5,000 and $10,000. Frequently he brought 
down, stored away in his tall beaver hat, from $100,- 
000 to $200,000 of these post notes. We would cash 
them at from ten to twelve per cent, under their face 
value and marketed them generally in Boston through 
the old firm of Gilbert and Sons, realizing a profit on 
each transaction of three or four per cent. In addition 
to this, as he made most of his disbursements in the 
West, we would pay him in packages of Virginia, Ohio, 
and western Pennsylvania bank notes at par and upon 
these we would realize a very handsome profit. He was 
a man of magnificent appearance and very popular. 
Elegantly dressed at all times, he was well calculated by 
his plausible statements to gain any favor from the bank 
he might require to uphold his speculations. Steem- 
berger disappeared after his financial crash and I did 
not hear of him for several years, when he came to light 
in California, shortly after the discovery of gold on the 
Pacific coast. Knowing the man's character, I im- 
mediately wrote my brother, Henry D. Cooke, of San 
Francisco, warning him against any transactions; but 
before my letter reached him, Steemberger had made 
his acquaintance and had involved him in some disas- 
trous speculation.*' 

When his success as a financier was well assured and 
his admission to partnership in the firm was in pros- 
pect, Jay Cooke met the young lady who three years 
later became his wife. He was just turning twenty- 


one and was on his way to Sandusky for a short stay 
with his parents, stopping en route at Meadville, Pa., 
where his brother, Henry D. Cooke, was a student at 
Allegheny College. Professor R. T. P. Allen was the 
President of the institution. His sister, Dorothea Eliza- 
beth Allen, was visiting him. 

The Allen family was one of some distinction in the 
early history of Maryland. Four brothers emigrated to 
this country from Ireland: Rev. John Allen, who was 
educated at Trinity College, Dublin, was the rector of a 
parish in Wexford County, became a professor of 
mathematics in the University of Maryland, and edited 
a "Euclid" which was dedicated to his friend John 
Quincy Adams and published in Baltimore, his wife 
being Brasseya Allen (named so for for her mother, 
who was a Miss Brass, of Wales) the author of a now 
very rare book of "Pastorals, Elegies, and Odes" ex- 
hibiting some metrical talent; Richard Nun, Ebenezer. 
and William.^ Before leaving Ireland, Richard Nun 
Allen had married a sister of Brasseya Allen, Elizabeth 
Johnson, who was accompanied to America by another 
sister, Dorothea Johnson, and their niece, Sarah 
Hughes, at the time about sixteen years of age. Upon 
his wife's death, Richard Allen married her sister Doro- 
thea and after she died, the niece, Sarah Hughes, by 
whom he had a number of children, among them, Robert 

1 Another brother, Robert, remained in Ireland, in County Wexford, 
where there are descendants in this line. The family is said to have 
come there with the Earl of Essex in the reign of Queen Elizabeth, one 
of its representatives being the Protestant Bishop of Ferus, about the 
year 1580. The Allen crest is the figure of a lion with the motto, 
" Triumpho morte tarn vita" (I triumph in death as in life). — From 
correspondence with members of the Irish branch of the family and 
Hore's History of the Town and County of Wexford. 



T. P., Richard, Eben, William, and a daughter named 
for the first two wives, her great-aunts, Dorothea Eliza- 
beth or Elizabeth Dorothea, who married Jay Cooke. 

Miss Allen, when Mr. Cooke met her at Meadville, 
Pa., was but fifteen, although in appearance a girl of at 
least eighteen ; and all the boys, his rivals, being kept in 
college, he made diligent use of his opportunities, as he 
explains in his Memoirs. They had many drives to- 
gether behind a team of horses, exploring the beautiful 
country bordering Lake Erie. "I lost my heart the 
first day," says Mr. Cooke, "and the second day we were 
sworn friends and life-long lovers." After her return 
to Baltimore and his return to Philadelphia, no great 
distance separated them and the young banker fre- 
quently visited her at her home until in the spring of 
1843 Miss Allen removed with her mother and brother 
to Lexington, Ky., where the latter was long to be identi- 
fied with Transylvania University. 

Richard Nun Allen had been a planter in Maryland 
and he owned slaves, so that it is not strange that his 
sons, Robert and Richard, especially as they found them- 
selves in Kentucky, when the war broke out, joined the 
Confederate Army, and were engaged in doing what 
they could to neutralize the stupendous influence of their 
sister's husband. Jay Cooke, which was placed in the 
other side of the balance in the terrible conflict between 
the American states. 

If communication were slow and expensive in that 
day, lovers wrote as industriously and as often as in 
this. Mr. Cooke complained that his letters were de- 
layed upon the mountains. He wrote Miss Allen, Lizzie 
or Libby he usually called her, of the bachelor parties 


which he and his friends gave in their apartments in 
Philadelphia. Once he noted : "I am writing this with 
a gold pen, my most valued Christmas and New Year's 
present. It is a massive case, both pencil and pen, richly 
chased and set with topaz. There is a scroll with my 
name upon it and engraved upon another part are the 
words, 'E. W. Clark and E. Dodge to Jay Cooke.' It is 
a flattering gift and I value it highly. I shall never 
use it except in writing to you. It shall be my Libby's 

"Scarcely a day passed without letters passing be- 
tween us," Jay Cooke recalled, "and in those days this 
was, ^financially speaking,* a big thing, since postage 
for a single letter from Philadelphia to Lexington was 
twenty-five cents, and often my letters contained en- 
closures or extra pages of affectionate lucubrations, so 
that, since each separate sheet must pay postage, I sent 
letters costing fifty and seventy-five cents quite fre- 

Mr. Cooke did not again see the young lady he loved 
so deeply until August lo, 1844, when he went to Lex- 
ington to be married to her. His brother Henry had 
followed his preceptor. Colonel Allen, to Transylvania 
University and was about to graduate. Mr. Cooke 
tells of the wedding and the journey afterwards in his 
Memoirs as follows: 

"We were married on the 21st of August, 1844, at 
Lexington, Ky., by the Rev. Dr. Bascom, and the next 
day started in a private carriage for Sandusky, via Blue 
Lick Springs and Maysville. A night or two before our 
wedding we were invited by Henry Clay and his wife 
to take tea at Ashland, which adjoined Colonel Allen's 


place and spent a pleasant evening there. Mr. Clay was 
a g^eat friend of my father's; they knew each other in 
Washington. Mr. Clay had also met Miss Allen in 
Washington and upon one occasion sent her a valen- 

"We again saw Mr. Clay when we reached Blue Lick 
Springs, where we were to spend the night. He came 
to our rooms at once and next morning escorted my 
wife to our carriage and kissed her in parting. Mr. 
Clay always kissed pretty girls. I forgot to mention 
that my brother Pitt had been married just two weeks 
before our wedding day and had with Mary Townsend, 
his beautiful young wife, come down all the way to Ken- 
tucky, with a roomy carriage and driver, to attend my 
wedding and my brother's graduation. We were now 
going to Sandusky, a very happy party — six of us, in- 
cluding the driver. In this delightful way we travelled 
leisurely, pulling up early each day at some country or 
village hotel and reaching Sandusky, a distance of about 
three hundred miles, in six days.^ After a stay there of 
ten days, my wife and I turned our faces eastward, 
stopping frequently and reaching Philadelphia via Al- 

* In 1843, Eleutheros Cooke had begun the erection of a new house on 
Columbus Avenue on the site now occupied by a hotel, the Sloane House. 
" Much marvel is expressed," he wrote Pitt, " why two of us on the 
wrong side of fifty should build so large and costly a palace when a 
cabin would be sufficient. I laugh and say to myself that the best lot 
in the city requires such a house and nvy object is to make a suitable 
place to entertain my glorious children when they and theirs shall bless 
me with their visits." " We are astounding the natives with its splendor," 
be continued. This house was finished in time to receive the wedding 
party on its arrival from Lexington in 1844. Some years ago it was taken 
down stone by stone* and re-erected one mile out Columbus Avenue, be- 
ing now the home of Eleutheros Cooke's granddaughter, Mrs. T. Morrison 


bany and New York. I was absent from business for six 
weeks. In Philadelphia we were met at the ferry at 
Walnut Street and taken to our beautiful suite of rooms 
adjoining Congress Hall and over our banking office. 
A door had been cut through, and for the first year we 
took our meals at the hotel.*' 

While with the Clarks, Mr. Cooke had many financial 
experiences of very great responsibility and importance. 
As a member of the firm, his counsel and aid were 
sought and given in the various large operations in 
which the house played a leading part for a long period. 
E. W. Clark and Company attended to the financial 
organization of a number of the early railway sys- 
tems of the United States such as the Pennsylvania, 
the Northern Central, the Philadelphia and Erie, and the 
Pittsburg, Fort Wayne, and Chicago Railroads. Mr. 
Cooke's brother-in-law, William G. Moorhead, who had 
been identified with the unfortunate packet line, was by 
this time president of the Philadelphia and Erie Rail- 
road. During the administration of John Tucker and 
other presidents of the Philadelphia and Reading Rail- 
road, the Clarks were the Philadelphia bankers of that 
company. The firm also sold $500,000 worth of bonds 
for the Allegheny Bridge Company and large loans for 
the various transportation companies of the country were 
taken and the securities distributed to the public through 
its agency. 

When the Mexican War broke out, Mr. Cooke says, 
Clarks was considered "the leading domestic exchange 
house" in the country and it was to have an important 
part in providing the money with which that war was 
successfully prosecuted. Jackson and his advisers, in 


sweeping away the national bank, had temporarily re- 
placed it with a number of pet state banks. This was 
followed by the sub-treasury system. The idea, so hate- 
ful to them, of a vast amount of government funds con- 
centrated in one place at the disposal of a relatively few 
men for commercial purposes, was cast aside for the 
theory, that the Treasury itself with a number of 
branches, situated in scattered parts of the country, 
should hold the public money. In these depositories it 
should rest in idleness at the call of the government. 
Robert J. Walker, who had designed the sub-treasury 
system, was now Secretary of the Treasury and received 
many lessons in finance through his dealings with E. W. 
Clark and Company. Jay Cooke writes in his Memoirs : 
"On the breaking out of the Mexican War, the gov- 
ernment advertised for proposals for loans; — at first for 
only ten millions of dollars. When the bids were 
opened, the awards were made principally to Corcoran 
and Riggs of Washington and E. W. Clark and Com- 
pany of Philadelphia. The Secretary's advertisement 
stated that the money might be deposited in any of the 
sub-treasuries of the United States. Our firm had a 
branch office in St. Louis and we proceeded to sell ex- 
change on Philadelphia and New York at a handsome 
premium, say two and a half or three per cent., and with 
interest dating from the hour of deposit in the St. Louis 
sub-treasury. The mails were sometimes from ten to 
fifteen days in transit, and in addition to this advantage 
in interest, we had a large profit in the premiums on 
exchange over and above the profit we made on the loan. 
Our friend, Robert J. Walker, was in some embarrass- 
ment. He did not want the money so far West and how 



to transfer it to the East without violating the sub- 
treasury theory, puzzled him. Finally our firm and 
Corcoran and Riggs hit upon a plan which Walker 
adopted. I have many times drawn up a bond and got 
a certificate on the back of it from good old United 
States Judge Cadwalader, or the Collector of the Port, 
or the Director of the Mint, that E. W. Clark and Com- 
pany were good for the amount named in the paper, 
mailing such certificate to our correspondents, Chubb 
and Schenck in Washington. By return of mail, I re- 
ceived a sub-treasury draft on St. Louis, New Orleans, 
Mobile, Charleston or some other point for from $200,- 
000 to $500,000 at a time, the sole condition of the bond 
being that at a given date, generally four months, the 
sum should be deposited in the sub-treasury in New 
York or Philadelphia without charge to the government. 
Now, when it is considered that at certain seasons of the 
year sixty-day bills on Brown Brothers and Company, 
Pickersgill and Company, and a host of other first-class 
houses, given in payment for cotton, rice, and other 
Southern products, could be purchased in these Southern 
cities at three to four per cent, discount and were 
promptly disposed of at six to eight per cent, per an- 
num interest, and that only a few days were required to 
get the returns and possess ourselves of these vast sums, 
not required for months to come, any one can see what a 
friend Robert J. Walker was to Corcoran and Riggs and 
E. W. Clark and Company. We at times netted, by 
using the money safely at twelve to fifteen per cent, per 
annum, five to seven per cent, on each transaction. 

"A little later the government called for several mil- 
lions more, but Mr. Walker inserted a special proviso 


that the money must be deposited in the sub-treasury 
nearest the home of the bidder and I have no doubt 
Robert J. remarked to himself, *Now that will fix those 
smart fellows at E. W. Clark and Company's/ But 
lo, when the bids were opened, our share was al- 
lotted to E. W. Clark and Brothers of St. Louis, Mo. 
Walker could not get out of it, of course, and so we 
victimized him again. After this he abandoned the 
universal scheme of the sub-treasury and deliberately 
legislated against the South and West by requiring all 
monies to be deposited in New York, Philadelphia, Bos- 
ton, Baltimore, and Washington." 

Mr. Cooke used often effectively to contrast the 
Mexican and Civil Wars on their financial sides, and 
show how trivial was the tmdertaking in the forties as 
compared with the work of the sixties. In the first 
war only about fifty millions of dollars were borrowed, 
while the loans reached a total of more than 2,500 mil- 
lions in the Civil War. 

In the summer of 1856, Mr. Clark died, after a pro- 
tracted stay in Europe, when he wrote frequently to 
Mr. Cooke, who was left in charge of the Philadelphia 
house. He described to his young partner the Bank of 
England, which he said was in a building "old, dingy, 
smoky, and hardly worth looking at" and gave him de- 
scriptions of many foreign objects and places. These 
were diflScult years for American brokers and bankers 
and called for much wisdom and care. "I see you are 
having rugged times at home," Mr. Clark wrote in 1854. 
"I am not disappointed and do not look for much relief 
at present. I hope you are acting on the safe principle. 
Keep snug and do not try to do a large business. You 


can make money enough by being moderate and carry- 
ing easy sail." But Boston and St. Louis were a drain 
upon New York, which in its turn called upon Philadel- 
phia. Mr. Cooke was obliged frequently to aid the 
New York office, where Luther Clark and Edward 
Dodge were in charge. 

It was during this flurry, in Enoch Clark's absence, 
that Jay Cooke endeavored to play the role of a peace- 
maker between the brothers, Enoch and Joseph W. 
Clark of Boston. Mr. Cooke was only thirty-three and 
the other men were the heads of their firms and very 
much his seniors. But he was not deterred by these 
considerations and he wrote to Joseph W. Clark this 
letter, so eloquently testifying to the generous spirit of 
the man, which never deserted him for a day until the 
end of his life : 

July 14, 1854. 
Dear J. IV. : 

I was much gratified at the receipt of your kind letter and 
Ned and Clarence, who have been equally with myself anxious to 
do all we could at the present emergency, have also felt sincere 
pleasure in reading it. We can all truly say that we never have 
thought of the Boston office in any other light than as entirely 
identified with ourselves and although the " boys " are not per- 
sonally interested in either the New York or Boston offices, yet 
I have found them in this emergency, gladly drawing in and con- 
centrating our funds for the purpose of joining forces with the 
other offices to meet the fury of the storm. As Luther will tell 
vou I at once stated to him that we would all stand or fall to- 
gether, and that the Boston office should have all it could possi- 
bly stand in need of. I felt no fears of the result and think now, 
as I then told him, that we would all stand higher than ever be- 
fore and that in a short time we would have more money offered 
than we could use . We were ready to send our half a million if 


needed ; we had over $400,000 of it on hand and maturing within 
3 or 4 days and we shall keep ourselves in this position, and get 
stronger besides. We use our money at i^ to 3 per cent, per 
month from day to day and frequently it pays }i to % sl day. We 
have done a noble business since ist of January; profits up to ist 
July $135,000. This storm has not resulted in any direct loss — 
but some of our big customers we have to let off and extend for 
and help out, or else break them and kill the goose that lays the 
golden egg. We have about 400,000 in this shape, all abundantly 
secured, we think, and paying good interest, and then about 
400,000 cash funds and 200,000, or thereabouts, in paper and 
short loans, besides lots of bank stocks, Morris Canal prefd., and 
bonds and other investments. Our bills payable and demand 
loans are lower than usual and but little of it at all likely to be 
called in ; and if it is called in, we have such securities as Phil- 
adelphia City 6s, pledged with the parties upon which we can get 
loans readily elsewhere. 

We must all feel grateful that we have escaped in this terrific 
storm ; it has been the hardest I have ever known and I have felt 
very anxious and have an unusual strain on my mind. But I 
have never for one moment dreamed that dishonor could come to 
us. We must all snug up, work out of debt and then our minds 
will be relieved of a vast burden. We can all make money as 
fast as it is good for us by a regular legitimate business ; in fact, 
I for one don't care to be worth more than I now am, although 
I think it would be folly to leave business, and especially such 
a business as ours, and where all is so pleasant. 

One thing, dear J. W., you must allow me to speak about and 
it has been on my mind to write you about it for a long time, and 
it is the difference between you and E. W. I think it absolutely 
wicked and sinful in the highest degree that two noble brothers, 
such as the world knows you both to be, should be separated 
through some vague and imaginary difficulty. I am convinced 
that there is no real cause for the present coldness between you, 
and I know that E. W. loves you now as tenderly as a brother can 
love. Time and again I have seen the tears start to his eyes when 
speaking of you, and I know that if you will only exercise the 


Christian's blessed privilege to forget and forgive, and will ex- 
tend to him your hand, he will gladly say, " Let all the past be 
forgotten; we are brothers once more; bless God that another 
sun does not go down upon our wrath." Now dear J. W., you 
will be doing a double good in yielding to what I know your heart 
even now prompts you to, for you will give me the blessed priv- 
ilege of being a ** peacemaker." Think of this and let me hear 
from you in return. 

I know that your brother does not feel anything but love for 
you, and during the present crisis would have pledged his last 
dollar to save you from trouble or danger if it had been neces- 
sary, and I knew I was doing his will and wish when I told 
Luther we were all one and indivisible. 

Good night! May God grant that what I fervently pray for 
in this matter may come to pass. 

Truly your friend, 

Jay Cooke. 

At Enoch Clark's death, he was reckoned one of the 
wealthy men of the city, although for the first years in 
Philadelphia, or until 1844, his gains, it is said, were 
largely consumed in discharging his old debts. No 
small part of his fortune was amassed through the acu- 
men of his trusted associate and partner. Jay Cooke, 
who, with the widow and the eldest son, Edward W. 
Clark, became an executor of the large estate. 

The most serious difficulties which he had yet ex- 
perienced came to Jay Cooke after Mr. Clark's death 
through the misunderstandings that arose among the 
various houses. He was the moderator to whom all 
seemed to appeal and as the active executor, was the 
guardian of the fortune of Mrs. Clark, Edward and 
Clarence and their six younger brothers and sisters, as 
well as of his own interests. When Mr. Dodge wrote 
from New York, it was to "Dear Jay, Ned, and Clary." 


The adjustment of his personal and the estate's affairs 
was a great task, especially as the panic of 1857 came 
to derange all calculations in the business world. Old 
establishments which had withstood the storm of 1837, 
were swept away twenty years later. It was remarked 
that no one seemed to care who failed and sympathy 
and assistance were not be had upon any side. "Money 
is not tight, it is not to be had at all. No money, no con- 
fidence and no value to anything," Edward W. Clark 
wrote to Jay Cooke from New York in 1857. "Phila- 
delphia," he continued, "is the only reliance. We can- 
not take care of New York, St. Louis, and Boston in 
such times as these." The crash came in a few days ; it 
was inevitable. Mr. Cooke, who had been contemplat- 
ing retirement from the firm ever since Mr. Clark's 
death, was now involved in difficulties from which he 
could not for some time extricate himself. He was 
urged by his brother Pitt to "take things quietly and 
get out of the vortex." His father wrote with parental 
anxiety on October 2, 1857: 

It has all along seemed to me utterly impossible for your 
house, in all its branches, extended as I have known it to be on 
securities constantly diminishing in value and on which no money 
could be raised, to sustain itself amidst the almost universal crash 
of banks and financial and commercial houses. . . . Our 
sympathies and our prayers are with you and your associates in 
this great struggle and should you come out of it uncrushed, we 
shall be compelled to ascribe it to an instrumentality more power^ 
ful than that of any human arm. . . . Fight the battle out 
bravely, and if all goes by the board come home with your prec- 
ious household, and I will give you a house and farm and fowl- 
ing piece and fishing apparatus and wherewithal to live easier 
and happier than ever. I have enough beyond the reach of com- 
mercial revulsions and financial explosions, with proper pru- 


dence, to make half a dozen such families as yours each happier 
than they can be anywhere else on earth. . . . Come home 
then if the storm strikes you, to the hallowed scenes of your 
birth and boyhood. We feel deeply for you in this trying hour, 
as well as for those truly estimable young gentlemen, Edward and 
Qarence, with whom you are immediately associated. Would 
to Heaven I could pay to them the debt of gratitude I owe to their 
father for his great kindness to you while he lived. He ^s an 
honor to his profession and his sons are an honor to the memory 
of such a father. . . . And now, my dear Jay, how shall I 
express to you the depth of my burning solicitude for one so 
unspeakably precious as you have made yourself to me and mine. 
I have long regarded you as a gem, above all price, and in 
this affliction you are dearer to me than ever. If all your hopes 
of a competency are crushed by this event and you are left pen- 
niless, I am ready to divide all I have with you at once. While 
I have a farthing left, neither you nor your noble wife and 
children will want for anything. Adversity only heightens 
my undying love for you. You have earned a reputation for 
business capacity, for sterling integrity, and noble benevolence of 
more value than millions of gold without it. This will remain 
brightening amid ruins though all else should perish around you. 

On October 3, 1857, P^tt Cooke wrote from San- 
dusky : 

I cannot help writing you though I well know that I can 
say nothing that will tend to cheer you, except that the truest 
and most heartfelt sympathy is felt by all your good old San- 
dusky friends. The telegraph to-day announced to us the si- 
multaneous suspension of all the houses of E. W. C. and Co. The 
bolt at last has fallen that for weeks impended over you. The 
sun that for nineteen years has daily and hourly gilded the east- 
em horizon to me amidst all my reverses during that period 
has been partially eclipsed. But there are energy and talent 
and integrity still left and they are worth more than mere ac- 
cumulated profits. Father, who has seen every vicissitude of 
life, and experienced all shades of reverse and prosperity, re- 


grets, but says now all his boys have tasted the bitter cup of 
reverse, and he remarked to me, " Jay don't feel half so bad 
about it himself as we do because he feels different about such 
things, dear boy." 

As his father had anticipated, Jay Cooke was calm 
throughout the excitement, facing this crisis as all oth- 
ers with an absolutely unruffled temper. "What I call 
reverses you do not," wrote Pitt Cooke about this 
time and it was true. There were in fact no such words 
as reverse, failure, or defeat in Jay Cooke's lexicon and 
he never knew their meaning so long as he lived. The 
blow was heavy, but it seems to have spent itself largely 
upon the New York and Boston houses. The Philadel- 
phfa house did not suspend, as it was assumed that it 
must. The various businesses conducted under the 
Clark name were reorganized, the Philadelphia office by 
the two sons, Edward and Clarence, acting as Edward 
W. Qark and Company. Jay Cooke withdrew and 
busied himself in protecting the interests of the estate 
and in adjusting his own affairs. Securities regained 
their value as they do after even the worst of panics and, 
upon receiving his dividends, he found himself, as he 
writes in his Memoirs, still in possession of "a fair for- 
tune." He was now a man of comparative leisure, who 
may have thought, perhaps, that his most useful days 
lay behind him; but of this illusion he was speedily to 
be disabused. 



Upon Mr. Cooke's retirement from the firm of E. W. 
Clark and Company, or rather his decision not to ac- 
cept the invitation of Edward W. and Clarence H. 
Clark to become a partner with them in the reorganiza- 
tion of their business in 1858, there was a thought that 
he might return to Ohio and take his place in the fam- 
ily circle in Sandusky. His parents were growing older 
and the passing years had left them feebler and with a 
less courageous outlook upon life. On February 22, 
1858, Eleutheros Cooke wrote his son Jay: 

I know not whether I shall be able to complete this short let- 
ter. . . . The truth is, and I may as well not attempt to 
disguise it, that I am getting old. At first it seems difficult to 
realize it. But when I reflect that I was bom only four years 
after the conclusion of the War of the Revolution; that I was 
for a long time intimately acquainted with many who took an 
active part in that struggle, then in the vigor of life, the truth 
at once flashes upon my mind that I belong to the antiquity of 
the present generation, and that therefore I should soon be laid 
aside as useless lumber. Other events also rise up and proclaim 
the same sad truth. Forty-six years ago to-day I acquired the 
distinction of being selected by the Washington Benevolent 
Society of three large counties to deliver the annual birthday ora- 
tion at Cazenovia before assembled thousands. Other memori- 
als, such as yourself and Pitt and H. D. and Sakey [Mrs. 
Moorhead] and their several descendants, attest the same truth, 



so that it is vain to deny that I am really an almost worn-out 
piece of machinery belonging to a long past age. 

On July 9, 1859, he again wrote to his son Jay that 
he was "looking anxiously forward for September," 
when he should be made happy by a visit. "I am tak- 
ing as good care as I can with my health/* said he, "so 
as to hold on to life till then/' 

For several years, Pitt Cooke, although he had 
studied law, had been employed in real estate dealings. 
Jay Cooke and his partners in the various Clark firms, 
together with William G. Moorhead, commissioned him 
to go to Iowa, Minnesota, Nebraska, and other regions, 
where tracts were being opened up to settlement by the 
government, and he frequently wrote long letters to his 
brother Jay out of an obviously warm and aflfectionate 
heart, transmitting the family news and describing his 
business operations. 

Henry D. Cooke had also studied law, but, like Pitt, 
was not destined to practice his father's profession. 
William G. Moorhead had so far recovered from his 
misfortunes in connection with the packet company as 
to obtain from his Democratic political friends a lucra- 
tive post as consul and naval agent at Valparaiso and 
Henry Cooke accompanied him to Chile, the two men 
engaging in trade on the Pacific coast at a time when 
the gold mining excitement in California made business 
there active and profitable. A fire in San Francisco, 
where Henry Cooke had settled, and other disorders, 
swept away all his hopes and* prospects and burdened 
him with debts which fettered him in later years. 
Upon his return home. Jay Cooke was the kindest of 
brothers. Henry did not like the law, for which he 


had first prepared himself, and the ministry was sug- 
gested, but his facility with the pen soon led to his enter- 
ing journalism. He had written letters to Joseph R. 
Chandler's United States Gazette and North American 
of Philadelphia while in South America, and now found 
employment with the Sandusky Register. On June 15, 
1852, Jay Cooke wrote his brother : 

I am truly rejoiced that you have a permanent position con- 
genial to your habits and tastes. It is just the thing and I feel 
as glad about it as if I had received news of a fortune from 
some old ancestor over in the north of Ireland. You will now 
have an opportunity equal perhaps to that of the minister of 
disseminating pure thoughts and truths and I trust will never — 
no matter what may be the temptation — allow your pen to de- 
viate from the strict path or to indite even the semblance of un- 
truth or equivocation, or to endorse it by copying the articles of 
others who are not so strict. ... It is really a first-rate 
paper and when you get it improved in appearance it will 
be as good or better than our papers. You should aim at short 
articles, avoiding all flourish. Leave out the ancients and care- 
fully avoid the slang words of the day. Joseph R. Chandler 
was a splendid writer. It seemed that he constantly improved. 
Thus far I have no fault to find in respect to your style, and I 
doubt not your own good sense will keep you free from im- 
perfections and that you will soon take a high rank amongst 

Through Jay Cooke's help, Henry became the sole 
editor and proprietor of the Register by the purchase 
of a partner's interest in September, 1856. He mingled 
his editorial duties with an interest in politics, being a 
presidential elector on the Fremont ticket in 1856, and 
to obtain a larger field, removed to the state capital, 
Columbus, where he became the leading proprietor of 
the Ohio State Journal. While this newspaper exerted 


a very considerable political influence and brought the 
editor into desirable relations with such men as Sahnon 
P. Chase, then the Governor of the state; John Sher- 
man, and other Republican leaders, it was incredibly 
unsuccessful from a financial point of view. His 
father, Jay, and his brother-in-law, William G. Moor- 
head, who gave him the use of a house in Columbus 
free of cost, were again called to his aid, but the Journal 
was still unprofitable. 'It is universally pronounced 
the best political paper in the state," Eleutheros Cooke 
wrote to Jay Cooke in February, 1859. "He [Henry] 
works hard, too hard, having lost some sixteen pounds 
in weight since he went to Columbus. He is a mere 
skeleton, but he is almost worshipped and deified by the 
leading men of Columbus and the state. The business 
there as yet yields nothing. . . . Lollie [his wife] 
says that for two weeks past he has not had one cent in 
his pocket. Poor fellow! His severe labors and his 
sterling merits and shining talents deserve a better fate 
and I pity him from my soul." 

Jay Cooke, like his brother, was now pretty well dis- 
gusted with journalism. He wrote: "I see daily in 
Philadelphia the whole editorial corps, a needy, half- 
starved, improvident set, always short, no credit, out at 
elbows, broken down in almost every particular. All 
except Swain and McMichael are beggars." 

Among those who came to Henry D. Cooke for em- 
ployment on the State Journal was a young man, born in 
the neighborhood, whose name was then unknown 
either in journalism or letters, William Dean Howells. 
He was engaged for the staflF and the editor was quite 
proud of his young assistant. "I send herewith this 


morning's Journal, containing the war article I wrote 
(and read you) Saturday," Henry told Jay Cooke in 
a letter from Columbus on Christmas Day, i860; '*also 
a witty and beautiful Christmas article from the pen of 
my literary editor, my Dr. McKenzie (who I think beats 
Forney's Dr. ) .^ 

Henry D. Cooke, at a conference with Governor 
Chase, Governor Dcnnison, Treasurer Stone, and other 
state leaders of the Republican party in 1859, made the 
raising of more capital the condition of his continuance 
at his post ; and for his support of Sherman in the ses- 
sion of 1859 and i860 in the notable contest for the 
speakership in which Pennington, the Know Nothing 
candidate, won, after the Ohio man as the result of a 
deal had withdrawn in his favor, gained an important 
government contract. Sherman, in return for his civil- 
ity, was made chairman of the Committee on Ways and 
Means, and was allowed to appoint the Committee on 
Printing, and there came to Henry Cooke then a com- 
mission to do the public binding, thought at the time to 
be worth some $25,000. The editor, in spite of his val- 
uable victory, — he afterward sold his contract for a 
handsome sum, — ^was compelled to ask Jay Cooke for a 
loan in order to pay his bills in Washington and make 
his way home, the proprietors of the paper, upon the 
outbreak of the Civil War, which soon ensued, losing 
the $18,000 or $20,000 which they had invested in the 

1 The literary editor of the Philadelphia Press, which was edited at this 
time by John W. Forney, was Dr. R. Shelton McKenzie, an Irishman 
who came to Philadelphia in 1857. He possessed much quaint knowledge 
in regard to literary affairs and gave his department an extended reputa- 


Thus Jay Cooke was not without responsibilities as a 
son and a brother, as well as the head of his own growing 
family in Philadelphia, and a charitable citizen upon 
whom demands from many sources were daily made and 
daily met with remarkable cheerfulness. Pitt Cooke 
therefore wrote rather feelingly when the dissolution of 
the Clark partnership and Jay's removal to Sandusky 
was suggested : "I would not like you to have to give up 
a high position in the active commercial world, earned 
by years of hard toil, wherein you are able to distribute 
from your abundant earnings to those who have but 
little and need much. All these things should be con- 
sidered by you, dear brother. Would not the monot- 
onous life you would lead here soon tire after the ac- 
tivity of your former life? Would you be able to in- 
dulge the free and generous promptings of your heart 
as you have done from the necessarily small means at 
your command compared with what you have heretofore 

Possibly Jay Cooke never seriously contemplated a re- 
turn to Sandusky as a permanent place of residence. 
Mrs. Cooke seems not to have favored his leaving Phila- 
delphia, and his private investments of old standing 
and engagements newly entered into, were soon again 
fully occupying his attention. He retained a desk at 
Clarks and frequently visited the office, his advice being 
sought by the two young bankers, whose career from 
boyhood he had watched with so much interest. In 
their father's firm, said he, writing in 1893, they "at 
once proved themselves most valuable, and revealed the 
very highest talent for the banking business. I had the 
great pleasure of associating with these noble young 


men for many years and when I voluntarily retired from 
the firm and after the death of their father, a few months 
earlier, they assumed the leadership and have ever since 
conducted business of vast proportions most success- 
fully and honorably." 

They were still engaged in several "joint account" 
negotiations, but Jay Cooke in 1858 entered upon a 
period of comparative rest and quiet. "Now that you ' 
have the leisure, you can run around over God's beauti- 
ful earth as much as you please," wrote Pitt Cooke, 
"and you have a heart to enjoy its beauty." But bar- 
ring some hunting trips and fishing excursions at his old 
home on Lake Erie and elsewhere, it seems that Jay 
Cooke did not go very far afield, except as travel for- 
warded his financial interests. One of the unpleasant 
and burdensome inheritances of his connection with the 
Clark houses was a considerable block of the securities 
of the Vermont Central Railway, which extended from 
Windsor upon the Connecticut River to Burlington on 
Lake Champlain, a distance of 117 miles. There it 
joined the affiliated Vermont and Canada road, which 
ran 47 miles up to Rouse's Point at the head of the lake, 
where it connected with Canadian lines.^ 

Mr. Cooke and E. W. Clark and Company together 

1 " In the days prior to 1857," says Jay Cooke, Jr., in explaining this 
investment, ''it was not the manner, as it is now in many large banking 
houses, to provide meals for the clerks and principals; so that Jay Cooke 
with the Clarks, A. J. Drexel, and possibly one or two others, organized 
a little dining club, and to pay the expenses incident to it, took flyers in 
the market with considerable success. In the course of their operations, 
they became possessed of a large interest in the Vermont Central, which 
was being managed by its officers in a way not conducive to the stock- 
holders* interests. When Mr. Cooke left the firm, this dining club asset 
was one of the things which he took with him, having bought out the shares 
of some of the other members of the club." 


had some $50,000 invested in this road, and he also rep- 
resented R. D. CuUen, at that time President of the 
Philadelphia and Reading Railway, Henry Beckett, 
Joseph Swift, George H. Thompson, and other large 
stock and bondholders. After the great decline in the 
value of its securities in 1856, J. G. Camp and E. T. H. 
Gibson were employed by the "Philadelphia party'' to 
open an office in Boston to protect their interests in the 
property. Mr. Cooke, with his characteristic vigor, be- 
gan a crusade upon the management, personally visited 
and inspected the road, conferred with New England 
and Canadian stockholders, and held public meetings 
in Boston and other eastern cities. Of subsequent pro- 
ceedings he wrote in June, 1859: "We were all in a 
bad scrape. The property had cost three times as much 
as it was worth; it was being ruined by bad manage- 
ment and litigation, and by those who should have been 
truthful and honest in administering its affairs. The 
trustees, with their herds of lawyers, had possession and 
all the earnings were absorbed in expensive car con- 
tracts and other expenditures entirely unnecessary and, 
as we fear, only made in reference to individual interest 
or if not so, to say the least, with very bad judgment." 
A scheme of reorganization was proposed. "It failed," 
Jay Cooke continues, "because our own agents, the trus- 
tees, were traitors and went to the legislature and de- 
feated the bill which was there pending, and which it 
was necessary for us to have in order to arrange the 
new order of events. I am told by those who say they 
know it to be a fact that thousands of dollars of money 
belonging to the Vermont Central trustees, was ex- 
pended by them in defeating our bill. Is this not mon- 


strous?" Mr. Cooke wished honest men "to come to- 
gether and get rid of the rascally lawyers, trustees, etc., 
turn the whole party out, and put in practical and hon- 
est men.'* 

A Boston newspaper, commenting upon the situation, 
said humorously: "It is a matter of history that the 
Middlesex Canal made its last dividend when the direc- 
tors in 'solemn squadron' mowed the tow path and di- 
vided the hay. That was in the day of snaths and rifles, 
and the expense of labor was too great to justify the 
continuance of the practice. The canal might yet have 
been a lucrative investment if the directors had em- 
ployed mowing machines turned out by the Vermont 
Central trustees, who by their recent account, show the 
ability of those enterprising managers to put together 
these machines at one of their railroad machine shops at 
an average cost of 37^ cents each.'* The last report 
rendered by the receivers contained a credit of $75, 
which they said came from a man named Smith, a near 
relative of one of the trustees, for constructing two hun- 
dred mowing machines at a company shop. 

Other efforts to rout the "vampires" failing, Mr. 
Cooke at last bought large quantities of the road's securi- 
ties in the Boston market, where several brokers were 
commissioned quietly to take in for his account all the 
second mortgage bonds offered at $2 or less and was 
about to obtain control of the property by foreclosure 
proceedings or compel his enemies to buy his holdings at 
his own price, when the war drew him in another direc- 
tion and his bold project was not realized. The Ver- 
mont Central litigation continued for several years. It 
was not yet ended on April i, 1862, when Mr. Cooke 


wrote hastily to J. M. Pinkerton of Boston, the attorney 
for his party, explaining the diminution of his interest 
in the undertaking: "I am very busy working for 
Uncle Sam and can't write much. You kill oflf those 
Vermont rebels and I will help kill the Southern Rebel- 
lion. Your course is heartily approved by Judge Hep- 
burn and myself." 

Mr. Cooke writes briefly of these years in his Mem- 

"During 1858, 1859, and i860, I had what is called 
a 'free foot' and during this period I was enabled, being 
rid of the cares of a daily business, to place my health 
on a strong foundation. I hunted and fished and 
camped out, but amidst all these recreations, engaged in 
some vast and profitable enterprises, such as the rebuild- 
ing of the Franklin Railroad in Pennsylvania, the fur- 
nishing to my friend Mr. Tinsley Jeter of Bethlehem, 
Pa., the means to build two short roads in that region, 
etc. ; but the great work accomplished in this period was 
the purchase from the state of Pennsylvania and the re- 
organization of a portion of its canal system. The main 
line was purchased by the Pennsylvania Railroad Com- 
pany, but all the others of moment, such as the Delaware 
Division, the Wyoming Division, and the West Branch 
Division, were remodelled under the leadership of 
Charles Henry Fisher, a leading capitalist of Philadel- 
phia, and by myself and my friends. We reorganized 
most of these companies, issued stocks and bonds, paid 
the state the price agreed upon, and then retired with 
good round profits. I was made president temporarily ot 
the Delaware Division Canal Company, but at the end of 
six months retired, and Mr. J. B. Moorhead [a brother 


of William G. and General J. Kennedy Moorhead] suc- 
ceeded me. He was much more experienced than I in 
such matters and I was glad to resign." 

The Franklin Railroad was the old abandoned Cham- 
bersburg, Greencastle, and Hagerstown Railroad run- 
ning from Chambersburg, Pa., to Hagerstown, Md. It 
was laid with strap rails and was purchased from the 
states of Pennsylvania and Maryland in 1858, by An- 
drew J. Jones and James J. Dull, who designed making 
it a connecting link between the Philadelphia and Read- 
ing and the Baltimore and Ohio lines, thus attracting 
much southwestern trade to Philadelphia. Jones and 
Dull agreed to make over to Jay Cooke and E. W. Clark 
and Company a large amount of the capital stock, in 
consideration of their sale of $200,000 worth of the 
road's seven per cent, bonds. So well did Mr. Cooke 
manage this operation, that he was heard to say in later 
years, that it was one of the few roads in his experience 
of which it was known in the beginning just what it 
would cost when completed. This transaction was of 
the type of a number in connection with the reorganiza- 
tion of the old state works mentioned in Mr. Cooke's 
Memoirs, and led to pleasant relations with several coun- 
try bankers, such as G. R. Messersmith of the Cham- 
bersburg Bank and J. W. Weir of the Harrisburg Bank, 
with whom he conducted many negotiations. 

His success as a promoting financier brought him of- 
fers from those who had enterprises for which capital 
was desired in every part of the cotmtry. All had 
tempting schemes for the making of large fortunes 
quickly. " I know of no one so efficient in getting up 
parties for such purposes as you are," General J. K. 


Moorhead wrote to Mr. Cooke, when he asked aid in 
i860 for the Chartiers Valley Railroad, and this was 
coming to be the view generally entertained by those 
who had had any experience of the spirited manner in 
which he conducted large financial operations. 

Mr. Cooke's brother-in-law, William G. Moorhead, 
who had now come to be a successful and wealthy rail- 
way financier, was travelling in Switzerland in 1856 
when news reached him of the death of Enoch W. Clark. 
He wrote Jay Cooke: 

You say nothing of your plans for the future. I hope you will 
not allow the opportunities which your position as the head of 
the present house gives, to pass without availing of them ; in 
other words, I trust you will not for a moment entertain the idea 
of leaving Philadelphia for five years or more to come. You can 
do almost anything there — elsewhere it would be like beginning 
life again. ... I love good old Philadelphia and hope to 
spend my days there and in the neighborhood after returning. 
As to business, I wish something that will not be too confining 
and will not involve too much risque. I will not jeopardize what 
I have in the foolish effort to make more. If you and I can go 
into something in a quiet way, I am quite ready, for neither of us 
could live happily without being in business. ... I feel the 
same interest in and for you that I do for myself and much more 
than for any one else. ... If you determine to close the 
present connection and discontinue it, I would be quite willing 
to avail myself of your skill, position, and knowledge by joining 
you in what might be an agreeable business. Of this you will 
write me and I will in the meantime jog on my winding way 
through this old world, contributing so far as possible to make 
happy those committed to my charge. 

This suggestion, as we have seen, was without result 
immediately, but it fructified during i860, and by the 
first of January, 1861, Mr. Cooke and Mr. Moorhead 


were ready to organize the famous banking firm of Jay 
Cooke and Company. "Then," says Mr. Cooke in his 
Memoirs, "having enjoyed three years of comparative 
rest, I concluded to re-enter the banking business, not 
with any thought, however, of the vastness of the work 
before me, but at the suggestion of my brother-in-law, 
William G. Moorhead, whose son [William E. C. Moor- 
head] and my own son [Jay Cooke, Jr.] were rapidly 
reaching an age when some business plans must be made 
for them, and we thought to bring them up as bankers. 
I opened the new office as Jay Cooke and Company at 
1 14 South Third Street, Mr. Moorhead being my part- 
ner, I having two-thirds and he a one-third interest. It 
was not expected that he who knew nothing of the busi- 
ness should give any time to it, and he in fact never did 
occupy any of his time in that office from 1861 to its 
close in September, 1873. Mr. Moorhead was the Pres- 
ident of the Philadelphia and Erie Railroad and was 
busy developing that enterprise and many other rail- 
road projects; but I had the benefit of the large busi- 
ness which from time to time flowed into the firm 
through his position, as well as the benefit of his capital 
added to my own." ^ 

It was a dark hour in which to organize a new busi- 
ness, and especially a banking business. The money 
markets were naturally in a state of great unsettlement. 
Lincoln had been elected but was not yet inaugurated; 
Southern threats became louder and more insistent, and 
one state, the leader in disunion (South Carolina), had 
already seceded and renounced the federal bond. That 

^In 1873, Jay Cooke stated that his fortune when he formed the firm 
of Jay Cooke and Co. was about $150,000. 


the firm would become the government's fiscal agent, 
or that the government indeed would need to establish 
such an agency, was not foreseen by Mr. Cooke, al- 
though one event followed another with electrical rapid- 
ity and led the states inevitably into their war. The 
time for raising money for railroads was swiftly draw- 
ing to a close; at any rate, until after the great sec- 
tional issue was decided. "The people here want to 
hear nothing now but the drum and fife," one of Mr. 
Cooke's correspondents wrote him from Boston ; "to see 
nothing but troops on the march with cold steel at their 
sides and to talk of nothing but fight." 

When the firm was organized, its head was still but 
little more than thirty-nine years of age. "I have often 
reflected," said Jay Cooke, alluding to his season of 
waiting from 1858 to 1861, "that this preparation of 
rest and of disentanglement from all business providen- 
tially fitted me to carry cheerfully, energetically, as well 
as faithfully and trustingly, the most enormous financial 
burdens I verily believe that were ever placed on the 
shoulders of any one man." 

Mr. Cooke's introduction to the country as a public 
financier was promptly and sweepingly eflfected through 
his sale, early in 1861, of the Pennsylvania State Loan 
of $3,000,000. The credit of the state at this time was 
at a low ebb, and naturally so when it is known that the 
debt was upwards of $40,000,000, contracted in time of 
peace through extravagant expenditures for useless ob- 
jects. She had suffered the greatest difficulties in the 
pa)rment of her interest, and repudiation had been dis- 
honestly suggested and advocated.* Sydney Smith's 

* Sec McClure's Old Time Notes of Pennsylvania, Vol. i, p. 57. 


tirades * drew public attention to her unfortunate finan- 
cial condition, and there was much reasonable doubt 
when the war impended whether another loan could be 
placed, unless the bonds were offered at a ruinous dis- 
count. Pennsylvania's "war governor" was Andrew 
G. Curtin of Centre County. His record Mr. Cooke 
believed was "unexcelled by that of any of the gover- 
nors of the states and was scarcely equalled by that of 
Governor Morton of Indiana." On May 15, 1861, the 
legislature of Pennsylvania hastily passed an act call- 
ing out 10,000 men as a reserve force to defend the 
state's borders, if the emergency arose, and authorized 
the sale of $3,000,000 worth of bonds bearing interest at 
six per cent. From this point Mr. Cooke tells the story 
in his Memoirs : 

"In this act, it was provided that the loan must not 
be sold under par. Just before the adjournment of the 
legislature, this restriction became known to our promi- 
nent bank presidents and private bankers who, after 
conferring together, sent a despatch to Governor Curtin 

iHe said in his caustic Letters on American Debts: — "I never meet 
a Pennsylvanian without feeling a disposition to seize and divide him; 
to allot his beaver to one sufferer and his coat to another ; to appropriate 
his pocket handkerchief to the orphan and to comfort the widow with his 
silver watch. How such a man can set himself down at an English table 
without feeling that he owes two or three pounds to every man in com- 
pany» I am at a loss to conceive ; he has no more right to eat with honest 
men than a leper has to eat with clean men. ... In the whole 
habitable globe, they cannot borrow a guinea and they cannot draw the 
sword because they have not money to buy it. . . . We all know that 
the Americans can fight. Nobody doubts their courage. I see now in 
my mind's eye a whole army on the plains of Pennsylvania in battle 
array, immense corps of insolvent light infantry, regiments of heavy horse 
debtors, battalions of repudiators, brigades of bankrupts with Vivre sans 
payer ou mourir on their banners and are alieno on their trumpets," etc., 


and to State Treasurer Henry D. Moore, to the effect 
that if the state required the bonds to be sold at not 
less than par, the loan would fail, as no one wanted 
them at such a price. They declared that the law must 
be amended, permitting bids at such prices as would 
command the money, even as low as 75 or 80 cents on 
the dollar. Unless this were done, said they, no money 
could be obtained. Mr. Moore knew my views and that 
I had desired the limit to be placed at par, because I 
believed that I could sell the loan on patriotic principles 
more easily than on a basis of profit and loss. However, 
the Governor and State Treasurer prepared an amend- 
ment to meet the wishes of the bankers, and permitting 
the sale of the bonds at the best obtainable price. This 
amendment was hurriedly passed that night and the 
legislature adjourned. The bill as amended was 
brought to me the next day by the State Treasurer. I 
expressed my chagrin that my plans had not been held 
to, but told Mr. Moore that I would take the bill otit 
home with me and would see him in the morning. On 
reading the amendment, I discovered that it did not ac- 
complish the purpose of its authors and, upon explain- 
ing my views to Mr. Moore, we concluded to go to 
Fourth Street and see the Attorney-General of the state, 
Hon. William M. Meredith. He had just returned from 
Harrisburg to his office and patiently heard my argu- 

" 'You wish this amendment abrogated and the sale 
restricted to not less than par, do you ?' said Mr. Mere- 

" 'I do,' said I, *and I hope you will give me an opin- 
ion that will set aside this amendment and give me a 


chance to sell this $3,ocx),ooo loan at par, as I surely 
can and will/ 

" *Well/ said he, 'come around in the morning and I 
will see about it/ 

"Mr. Moore and I returned to the office next morning 
and received from Mr. Meredith an opinion fully con- 
firming my position, saying that if the loan were sold 
under par it would be illegally sold, etc.'' 

The decision was much to Mr. Cooke's liking and 
on May 28, 1861, Governor Curtin addressed the fol- 
lowing letter jointly to Jay Cooke and Company and 
the much older house of Drexel and Company, which 
was to be associated in the work in hand, although its 
participation in the service did not assume a very active 

Messrs. Drexel & Co., and Jay Cook & Co., Philadelphia. 

Gentlemen : — Feeling the importance and necessity for the 
interest and credit of the state that the loan of three millions 
recently authorized by the legislature should be promptly and 
cordially taken by our citizens and mortied institutions at par, 
and relying upon your patriotism and State pride, I hereby ap- 
point you Commissioners to procure bids for any or all parts of 
said loan, the same to be received at not less than par as 
specified by the act authorizing it. 

Yours truly, 

A. G. Curtin, 


Mr. Cooke did not wait to receive this official commis- 
sion, he tells us; he bestirred himself in behalf of the 
loan at once. "Mr. Weir, the cashier of the Harris- 
burg Bank, and Mr. Moore," he writes, "were des- 
patched to Pittsburg and the western slopes of the Al- 
leghanies. Mr. H. C. Fahnestock, a nephew of Mr. Weir, 


undertook a tour among the neighboring counties, vis- 
iting the banks at Gettysburg, CarHsle, Chambersburg, 
Lebanon, York, Columbia, Lancaster, and Reading. I 
sent agents up the Lehigh and undertook the work in 
Philadelphia and the surrounding country. Mr. Mer- 
cer, the President of the Farmers' and Mechanics' Bank 
of Philadelphia, was one of those who had urged the 
amendment, and I found him indisposed to subscribe, 
but after using all my arguments, he finally said he 
would take $200,000, if it required so much to complete 
the subscription. So I put his name down as the first 
for that sum, and then applied to the other banks, in- 
surance companies, savings banks, and to private capi- 
talists, using the argument that this subscription at par 
for so large a sum as three millions would strike terror 
to the rebels and greatly help the United States gov- 
ernment in selling bonds at par. They at this time were 
below par. I admitted that but for these all important 
reasons the price was high, but in view of the grand 
effect of such a subscription, the bonds would prove a 
better investment at par than below par and that what 
we needed now was patriotism and not money making.'' 
A circular with blanks upon which banks and private 
citizens could make subscriptions was widely distributed 
through the state. It read as follows: 


The subscribers having been authorized by the Governor and 
State Treasurer to procure bids for the loan recently authorized 
by the legislature of Pennsylvania, would respectfully appeal to 
the patriotism and State pride of Pennsylvanians in this hour 
of trial that they come forward and manifest their love of the 
commonwealth by a prompt and cordial response to her call. 


But independent of any motives of patriotism, there are con- 
siderations of self-interest which may be considered in reference 
to this loan. It is a six per cent, loan free from any taxation what- 
ever and bidders can have the privilege of taking certificates of 
$50, $100, $500, $1,000 or larger sums and either coupon or 
transferable loan. A special tax amounting to about three hun- 
dred thousand dollars per annum is by this loan bill levied and is 
to be applied to the payment of the interest on the loan and to 
the purpose of a liberal sinking fund. The bill itself stringently 
guards against any but an economical and judicious expenditure 
of the money, and throws around its disbursement, as will be 
seen by the annexed card of the State Treasurer, the most 
satisfactory checks and guards. The number of taxable inhab- 
itants within the State is now nearly 700,000, thus showing that 
the above loan^ added to our debt, only amounts to the trifle of 
four dollars and fifty cents for each taxable ; and besides it is con- 
fidently expected that most of the funds now disbursed, being 
really in aid of the general government, will be in due time re- 
turned to our treasury. 

Please advise us on or before the 8th of June the amount you 
will subscribe. Drexel & Co., 

34 South Third Street. 
Jay Cooke & Co., 
Philadelphia, June i, 1861. 114 South Third Street. 

There were many subscribers for large amounts 
whose subscriptions were not conditioned upon the tak- 
ing of the entire loan at par. For instance, the Phila- 
delphia Bank promised to take $icx),(XX) of the bonds 
and afterwards raised its bid to $i8o,cxx). The Girard 
Bank took $125,000 and the Bank of North America, 
$100,000, whereupon, gaining courage, Mr. Mercer 
made his subscription $300,000. Mr. Weir telegraphed 
from Pittsburg that the banks of that city had sub- 
scribed for $400,000, two taking $90,000 each, one $60,- 
000, one $50,000, two $40,000 each, and one $30,000. 


DRBXBL A CO. and ^ 

JAY, COOKE A CO. \ Aga^tfAe CommommM, 

PkiUMfkia. J 

WE^ the nndenigoed, Mthonse yov to tobacriba at par, in oar ii«ne, for tho 
««t ofiponte o«r StgnaUires, to the Three BfiUioa Pe»MylvanU Sute Loan advarlaiad on 
the 17th of May. 



Most of the country banks subscribed for $10,000 but 
the Montgomery County Bank of Norristown took $50,- 
000 worth of the bonds; Mr. Messersmith's Chambers- 
burg Bank $40,000, and the York Bank, $40,000. The 
insurance companies and the transportation companies, 
as well as private capitalists, were not forgotten. 
The subscription of the Pennsylvania Railroad was 
$300,000 and of the Philadelphia and Reading Railroad 

Many bids were forwarded by telegraph either to the 
Commissioners in Philadelphia or to the State Treasurer 
directly. "Finally, when they were opened at Harris- 
burg," Mr. Cooke continues in his Memoirs, "the sub- 
scriptions at par reached $3,300,000, so that it was 
necessary to scale down each bid. This grand result 
saved the state over half a million in cash and vastly 
improved the situation, being of more real aid to the 
finances of the war than a subscription of ten times 
the amount at a discount. I took care to have this 
patriotic subscription, giving the names and amounts 
of all the subscribers, fully noticed in the newspapers 
of the country, telegraphing the news to all points and 
sending a copy of the subscription list through Ken- 
tucky (our only mode at that time of reaching the 
South) to Jefferson Davis, with a letter to the effect 
that all the millions of the North, if required, would 
be forthcoming to suppress treason and rebellion. I 
also sent copies to the London Times and to the Secre- 
tary of the Treasury, Mr. Chase, and to many other 

So notable a service evoked expressions of the live- 
liest admiration and gratitude. When Governor Curtin 


wrote seventeen days later, he had learned how to spell 
Mr. Cooke's name. He addressed individuals and not 
firms, mentioning Mr. Cooke first and Mr. Drexel after- 
ward. The letter was as follows : 

Pennsylvania Executive Chamber, 

Harrisburg, Pa., 14 June, 1861. 
Jay Cooke and A, J, Drexel: 

Gentlemen : — The receipt of your letter to me yesterday, is as 
gratifying to me as any circumstance which has transpired since 
my inauguration, and to say that the taking of the loan in the 
cheerful, prompt and patriotic manner in which it was bidden 
for is gratifying, is but a feeble expression of the heartfelt joy 
with which I saw bid after bid opened until the whole closed 
with more than the required amount at par. 

In the midst of painful circumstances alluded to by you, I feel 
the triumph which, through the exertions of yourselves and the 
present invaluable State Treasurer, the good old Commonwealth 
has achieved. I trust that the day is not distant when the 
names of those who exerted themselves in procuring the " sin- 
ews of war " will stand recorded, if not on a page as glorious, 
certainly as enduring, as that of those who have gone forward 
to seek upon the field of fame a name in their country's history. 

Permit me to close by adding to my personal acknowledg- 
ments the thanks of the State of Pennsylvania for your exertions 
in this momentous matter. 

Very truly yours, 


'^We have worked hard and it is regarded as an 
achievement as great as or greater than Napoleon's 
crossing the Alps,'' Jay Cooke wrote to his brother 
Henry on June 13, 1861. "It is indeed a glorious work 
and I am proud of it." 

The names of the subscribers to the loan are recorded 
on a scroll six feet in length which was preserved by Mr. 
Cooke. This paper reads as follows : 

lis JAY CXX)K£ 

Haskisbukg* June 13, 1861. 
The bids for the three million six per cent loan of the Commonwealth 
of Pennsylvania direct to the Secretary of the Commonwealth and those 
made under the auspices of the State Treasurer and Drexel and Company 
and Jay Cooke and Company, Commissioners, were opened to-day and are 
as follows, all at par: 

Farmers' and Mechanics' Bank, Philadelphia $300,000 

Philadelphia Bank, do 180,000 

Girard Bank, do 125,000 

Mechanics' Bank, do 100,000 

Western Bank, do 40,000 

Commercial Bank, Pa., do 100,000 

Bank of Northern Liberties^ do 50,000 

Bank of North America, do 100,000 

Southwark Bank, do 25,000 

Tradesmen's Bank, do 25,000 

Kensington Bank, do 20,000 

Manufacturers' and Mechanics' Bank, do 20,000 

Bank of Penn Township, do 25,000 

City Bank, do 35«ooo 

Consolidation Bank, do I5f000 

Com Exchange Bank, do 18,000 

Bank of Commerce, do 25,000 

Commonwealth Bank, do 20,000 

Philadelphia Contributionship Society, do 20,000 

American Fire Insurance Company, do 10,000 

Pennsylvania Comp'y for Ins. and Annuities, do 10,000 

Insurance Company North America, do 20,000 

Franklin Fire Insurance Company, do 20,000 

Delaware Mutual Insurance Company, do 20,000 

Pennsylvania Fire Insurance Company, do 10,000 

Reliance Mutual Insurance Company, do 5,000 

Mutual Fire Insurance Company, Germantown 4,000 

Mutual Assurance Company, Philadelphia 10,000 

Pennsylvania Railroad Company, do 300,000 

Reading Railroad Company, do 65,000 

Mt. Carbon Railroad Company, do 5,000 

Schuylkill Navigation Company, do 10,000 

Delaware Division Canal Company, do 10,000 

Hazleton Coal Company, do 10,000 

Bank of Pittsburg, Pittsburg 90,000 

Exchange Bank do 90,000 

Merchants' and Manu&cturers' Bank, do 60,000 

Citizens' Bank, do 50,000 


Allegheny Bank, Pittsburg $40,000 

Iron City Bank, do 40,000 

Mechanics' Bank, do 50,000 

Bank of Chambersburg, Chambersburg 40,000 

York Bank, York 40,000 

Columbia Bank, Columbia 40,000 

York County Bank, York 20,000 

Farmers' Bank of Schuylkill County, Pottsville 20,000 

Bank of Delaware County, Chester 10,000 

Doylestown Bank, Doylestown 10,000 

Lock Haven Bank, Lock Haven 10,000 

Bank of Chester County, West Chester 10,000 

Bank of Gettysburg, Gettysburg 10,000 

Bank of Gcrmantown, Germantown 10,000 

Stroudsburg Bank, Stroudsburg 6,000 

Lebanon Bank, Lebanon 10,000 

Franklin Bank of Washington, Washington 10,000 

Octorara Bank, Chester County 3,000 

Bank of Danville and others, Danville 16,000 

Farmers' and Mechanics' Bank of Easton, Easton 10,000 

Bank of Montgomery County, Norristown 50,000 

Bank of Pottstown, Pottstown 10,000 

Farmers' Bank of Lancaster, Lancaster 20,000 

Lancaster County Bank, Lancaster 20,000 

Lebanon Valley Bank, Lebanon 5,000 

Mount Joy Bank, Mount Joy 5»ooo 

Wyoming Bank, Wilkesbarre 10,000 

Easton Bank, Easton 10,000 

Hanover Saving Fund, Hanover 16,000 

Harrisburg Bank, Harrisburg jo,ooo 

Kittanning Bank, Kittanning 20,000 

Mechanics' Bank, Harrisburg 20,000 

Bank of Middletown, Middletown 20,000 

Miners* Bank, Pottsville 10,000 

Monongahela Bank, Brownsville 10,000 

Bank of Northumberland, Northumberland 10,000 

John White, Bridesburg 550 

Michael F. Clark, Philadelphia 10,000 

A. Miskey Hance, Germantown 50 

John Grigg, Philadelphia 10,000 

Mary R. Miskey, Germantown 100 

R. J. Iddings, Philadelphia 200 

Charles H. Rainier, Bustleton 100 

W. E. Garrett and Sons, Philadelphia 1,000 

Samuel D. Walton, do 3i000 



Collins W. Walton, Philadelphia $ i,ooo 

Charles McCowen, do loo 

John P. Rowbotham, do 400 

£. Otis Kendall, do 2,000 

R. S. Walton, do 500 

John Roset, Bucks County 1,000 

do do 50 

Ellis Lewis and Others, Philadelphia 50,000 

Henry Duhring and others, do 50,000 

Hebsecker, do 50 

Sarah A. Brown, do 300 

James W. Healy, do 300 

E. S. Gillett, do 300 

Henry Williams, do 750 

Joshua Q. Jeanes, do S,ooo 

Mrs. Ellen Drew do 50 

Gustave Wedekind, do 2,000 

Margaret Robb, do 150 

Ellen B. Barnes, do 1,000 

John G. Moore, do 100 

Thomas J. Walsh, do 200 

Nancy P. Pleasants, do 1,000 

Margaret Martin, do 100 

Joseph Potts, Jr., Pottstown 500 

Horace Binney, Philadelphia 5,000 

John Provest, Germantown 1,600 

Roger H. Kirk, Lancaster County 500 

Harriet H. Baird, Reading 100 

Joseph Wilson, Adams County 2,000 

Joseph Banty, do 200 

Joseph Fisher, Philadelphia 1,000 

Nathan Trotter and Company, do 5,000 

L B. Baugher, Gettysburg 50 

Bernard Conway, Philadelphia 500 

John Gray, do 400 

Trustees Girard Bequest, do 3,000 

Michael Moyer, do 1,000 

Atherton Blight, do 1,000 

Jerome Plankinton, do 500 

Denis O'Connell, do 650 

Miss Mary Cressman, do 1,500 

Mrs. Ann C. Cummings, do 500 

John A. Brown, do 10.000 

J. Allison Eyster. Chambersburg 10,000 

Fire Insurance Company of Northampton Co., Easton 1,000 


Anna M. Green Easton . . $ loo 

Henry D. Maxwell, Guardian, do lOO 

Henry D. Maxwell, do aoo 

Joseph Smyser, York 1,000 

Alexander Frey, do 1,000 

Eli Lewis, do 4i000 

Drexel and Company, Philadelphia 20,000 

Jay Cooke and Company, do 10,000 

Joseph Harrison, Jr., do 20,000 

W. H. Newbold, Son and Acrtsen, do 5,000 

C and H. Borie, do 5,000 

E. W. Gark and Company, do 5>ooo 

Gaw, Macalester and Company, do 5,000 

John P. Crozier, do 10,000 

Jacob T. Williams, Germantown 500 

Edward Bennett, do 500 

Isaac Lea, Philadelphia 3,000 

Henry C. Lea, do 2,000 

S. K. Hoxsie, do 1,000 

William A. Blanchard, do 5,000 

William G. Bechtel, do 300 

Thomas Biddle and Company, do 1,000 

G. D. Rosengarten, do 6,000 

George H. Stuart, do 10,000 

Evans Rogers, do 5,ooo 

Stephen Morris, do 5,000 

Morris, Tasker and Company, do 9,000 

Edwin M. Benner, Sumneytown, Pa 500 

Inland Insurance Company, Lancaster 2,000 

Henry Johnson, Muncy 1,000 at 95 

Jacob M. Campbell, Johnstown 30,000 

Andrew McQurg, Alexandna 1,500 

Alexander Harding, Philadelphia 400 at 85 

Thomas E. Franklin, Lancaster 1,000 

J. B. and G. T. Lane, do 1,000 

Hager and Brothers, do 1,000 

R. F. Rauch, do 500 

Reed, McGrann, Keely and Company, do 5,000 

George M. Steinman do 1,000 

Giarles H. Heinitsh, do 500 

Henry G. Long, do 1,000 

John F. Sehner, do 500 

Chas. Herbst, do 500 

A. Herr Smith, do 1,000 

N. Ellmaker, do 500 


J. F. Long and Company, Lancaster $ 600 

John Baer's Sons, do 1,000 

F. A. Muhlenberg, Jr., do 1400 

Thomas S. Clark, Pittsburg 2,000 

William Thaw, do 2,000 

George S. Pepper, Philadelphia 10,000 

George Wetherill, do S,ooo 

Thomas P. Hoopes, do 2,000 

S. Parker Cooper, York 800 

Margaret R. Cooper, do 500 

Cumberland Valley Railroad Company, Chambersburg 1,000 

Thomas Welsh, Jr., Philadelphia 400 

Total Bids $3,090,650 

All at par except Fourteen Hundred Dollars. 

In 1873, Henry D. Moore, then in St. Petersburg, 
indignant at the falsehoods which were being circulated 
on many sides regarding Mr. Cooke, wrote out his recol- 
lections of the event and recorded his appreciation of 
the banker's services in this emergency. Mr. Moore's 

letter is as follows: ^ 

St. Petersburg, Sept. 15-27, '73. 
My dear Mr. Cooke: 

Your favor of the sixth instant is at hand to-day, and in reply 
thereto, I will give you a statement of the facts connected with 
the negotiation of the Pennsylvania $3,000,000 war loan as I 
remember them. I was treasurer of the state at the time and 
when the bill was passed by the legislature authorizing the loan, it 
prohibited the sale of the bonds at less than par. 

Immediately there was a strong manifestation of feeling 
against the bill in this shape on the part of many of the bank 
officers and bankers throughout the state, on the ground tliat 
it would be impossible to negotiate the loan at par when all 
Penna. loans were so much depressed, and government loans 
selling in the market at a discount of 12 to 15%. The legis- 
lature was about adjourning, and the Governor and myself were 
told that if this restriction was not removed from the bill, the 

1 This letter is in the possession of Jay Cooke's son, Rev. H. E. Cooke, 
of Warren, Ohio. 


state would in all probability find itself without funds in that 
most critical period ; and if I remember correctly, a consultation 
was immediately held between the Governor, Auditor-General 
and Chairman of the two Committees of the Senate and House, 
and myself, when it was agreed to amend the bill by removing 
the restriction as to price, which was done just previous to the 

I then came to Philadelphia and consulted with you and Mr. 
Drexel as to the steps to be taken for the negotiation of the loan, 
and if I mistake not, you expressed regret that the bill had not 
been left in its original shape, and gave as a reason for it, that 
while you did not think the people of the state desired the loan 
as an investment, yet you believed they would take it from 
patriotic motives, and with such feelings you thought they could 
be induced to take it at par. On an examination of the bill as 
amended, you expressed a doubt as to whether the amendment 
accomplished the object intended, and said that you did not 
believe that we could legally sell the bonds at less than par. 
We then submitted the case to the Attorney-General, Mr. Mere- 
dith, and the following day he gave us his opinion, which was, 
that the amendment was so questionable that he did not think 
we could legally sell the bonds below par. 

This settled the question on that point, and we then went 
to work to test the patriotism of our state, and the result proved 
that you were correct in your estimation of the loyalty and 
patriotism of the people of Penna. Of course, this was not done 
without work and labor: circulars were prepared appealing to 
the people, agents were employed, and the valuable aid of the 
press of the state was also brought into the work ; and when all 
this was done, the books were opened, and I think in about ten 
days' time we had the whole amount subscribed for at par. 
Well do I remember our first day's attempt to open the books 
for this subscription. We had apportioned a certain amount 
of the loan among the banks pro rata, according to the amount 
of their capital, and the amount that we had set down for the 
Farmers' and Mechanics' Bank I think was $250,000. You and 
myself called on Mr. Mercer, the President of that bank, to 


start the subscription, as his was the largest bank in the state, 
and we felt that if we could get his name at the head of the 
list, our work would be well begun and comparatively easy. 

When we told him that the subscription was to be made at 
par, he at once declined, and asked if we supposed it would be 
possible to get the loan taken at par. You replied that you had 
no doubt of it, and then told him of Mr. Meredith's legal opinion, 
that we had no right to negotiate it on any other condition. His 
reply was that he did not want to discourage us, but he must 
express his doubt of our success, and that he could not, in justice 
to his bank, head the subscription list at that rate. But his 
noble and patriotic character did not allow him to stop here, 
for he told us, that if we got anything near the full amount 
subscribed at par, then he would take for his bank its full share, 
and if necessary to close up the whole amount, would even take 
more than its share, which he subsequently did; but we left 
his bank without his name on our book. 

We did not then apply to any other bank in Philadelphia, 
because we felt that if we did so they would naturally ask why 
we did not begin with the Farmers' and Mechanics' Bank. 

We then went to your office and it was decided that I should 
go at once to Pittsburg, and a despatch was sent to Mr. Mc- 
Auley, President of the Iron City Bank, to call a meeting of the 
bank presidents at his office the next afternoon, and that I would 
be there to see them on important business. I was there at 
the time appointed, and met with the same reception at first, 
that we met with at the Farmers' and Mechanics' Bank. But 
after an interchange of argument and views on the subject, their 
patriotism was equal to the occasion, and I left Pittsburg with a 
subscription of near one-third of the loan at par, based upon 
the condition that the balance of the loan should be taken at the 
same rate. I returned to Philadelphia and in less than a week 
from that time you had the whole loan subscribed for, and if I 
mistake not, when we came to get in the subscriptions from all 
your agents, it footed up some $300,000 more than was neces- 

These are the facts in reference to that negotiation as far as 


I can remember them, and I have always thought, that this suc- 
cessful negotiation of that loan at par, was one of the most im- 
portant results to our country of anything connected with the 
rebellion. It not only saved our state nearly a half million of 
dollars, but it encouraged every other Northern state in the 
negotiation of their loans, and it was an unmistakable evidence 
to the rebels of the feeling and determination of the people to 
put down the rebellion at any cost. And it was not without its 
effect abroad also, for it caused other nations to have the respect 
for us, and that belief in our ultimate triumph, which nothing 
else could have done. 

I well remember meeting Mr. Josiah Bacon of our city on 
Chestnut Street a few months after this loan had been effected, 
who introduced me, as Treasurer of the state, to an English 
gentleman, and he alluded at once to this negotiation of our 
loan at par, and said to me, that it would do more to inspire 
confidence among his people and all nations abroad in our cause, 
and in the strength of our government, than anything else pos- 
sibly could do. But the most remarkable result and valuable 
result to our country of this successful sale of our state loan, 
was the effect it had on the subsequent negotiation of our na- 
tional loans. You know, everyone knows, of the very depressed 
condition of our government bonds at that time, and the great 
difficulty which our government experienced in negotiating their 
bonds, even at a very large discount and I will now tell you 
what you have perhaps never known, that I wrote to Mr. Chase 
(then Secretary of the Treasury) and gave him a history of 
the negotiation of our loan at par, and expressed to him my 
earnest belief that if he would give you the negotiation of the 
government loan, you would be as successful with it as you were 
with our state loan. I felt that if the same appeal was made 
to the patriotism of the people of the country as had been made 
to the people of the state, and the same energy manifested as 
had been evinced by you in the negotiation of our state loan, 
the result would be the same. It was done and the result is 
a part of the history of our country, and one of the brightest 
pages of that history too; for never before in the history of 


the world, has any nation or people manifested such a patriotism 
and love of country, such a belief in the right and justice of 
their cause, as was manifested by our people in this outpouring 
of their wealth to preserve the integrity of the nation, and in 
this portion of the history of our country, Mr. Cooke, you have 
a part of which you may justly feel proud. I do not pretend 
to say that these things could not have been accomplished with- 
out your aid or assistance, or that no one else could be found 
to do it: I only say that you did it, and the supposition that 
any one else might have done it, should not deprive you of the 
honor and credit which is justly your due. I do not claim that 
you are entitled to all the credit for the successful negotiation 
of our state loan, because Mr. Drexel was associated with you 
in that negotiation, and while he did not take an active part in 
the details of the work, yet we had the valuable aid of his counsel 
and advice, and his name was of great assistance to us because 
of the high character and standing of his house. But you laid 
out the work and devised the plans to carry it out, and gave 
to it your undivided time and attention until accomplished. 

Your friend ever, 

Henry D. Moore. 



In very many instances the Treasury of the United 
States has had chiefs who were without useful prac- 
tical experience in financial affairs. They have mostly 
also lacked a theoretical knowledge of finance, gained 
by a study of political economy. To this untrained 
class, it is clear, belonged Howell Cobb of Georgia, who 
was chosen by James Buchanan to be his Secretary of 
the Treasury. A Southern Democratic leader, strongly 
persuaded of the righteousness of his section's view of 
slavery, he had not exhibited so violent a spirit as some 
of the politicians in that group of which he was a promi- 
nent member. Of an understanding of finance he was 
not suspected, even by his most devoted friends, and his 
administration of his office was without influence in 
altering the public judgment. Mr. Buchanan appeared 
to be in a comfortable state of mind as the country 
drifted nearer and nearer to the verge of crisis. In 
pride and satisfaction he had written in his Inaugural 
Address in March, 1857: "No nation has ever before 
been embarrassed from too large a surplus in the Treas- 
ury." On July I, 1857, the public debt was $29,060,- 
386.90 and a cash balance of $17,710,114.27 remained 
in the Treasury. So prosperous was the outlook and 
so unprophetic were the nation's financiers, that Secre- 
tary Cobb engaged in an operation, afterward most se- 



verely criticised, of buying up government bonds at a 
considerable premium, in order to distribute the store of 
public money. 

Perhaps it was due to the general business panic of 
1857, or to a settling consciousness of approaching civil 
war, that all predictions of the government's pursuing 
a smooth course in financial seas were soon set at defi- 
ance, and the President and his Secretary of the Treas- 
ury were compelled to take less roseate views of the out- 
look. Already in June, 1858, Congress authorized the 
sale of $20,000,000 of fifteen year six per cent, bonds, 
whose annual interest charges of $1,200,000 would need 
to be paid in gold throughout the war. The costs of 
government increased ; its revenues declined, and the ad- 
ministration, anti-tariflF as it was, reluctantly turned to 
a higher schedule of duties on imports as the means of 
saving the Treasury from imminent want.* The ses- 
sion of 1858-59 passed without an agreement among 
the leaders as to a tariff bill, and upon the last day, 
President Buchanan earnestly urged both houses hot 
to adjourn without making provision for the pressing 
needs of the government* From plethora the Treas- 
ury in two years had come to a point where it was faced 
by insolvency, a fate it escaped only by an amendment 
to an appropriation bill passed at the last moment of 
the session, reviving an old law and permitting the re- 
issue of short time Treasury notes for $20,000,000, 
bearing six per cent, interest. By July i, i860, when 
the campaign which elected Lincoln to the Presidency 

^ James Schouler, History of the United States under the Constitution, 
Vol. 5, p. 420. 
* Special Message of March 3, 1859. 


was well under way, the public debt had been increased 
in long bonds and temporary loans to $64,769,703.08, 
while the balance in the Treasury at this date was only 
$3,629,206.71,* indicating a gain of nearly $50,000,000 
in the burdens imposed upon the government in three 
years of peace. 

The evil progress of the country's finances was ex- 
hibited by John Sherman in the House of Representa- 
tives. The debt of the United States and the Treasury 
balances at the end of four fiscal years preceding the 
war were as follows : ^ 

On July I, 1857, 

Public Debt $29,060,386.90 

Balance in Treasury 17,710,1 14.27 


On July I, 1858, 

Funded Debt $25,155,977.66 

Treasury Notes 19,754,800.00 

Total Debt $44,910,777.66 

Balance in Treasury 6,398,316.10 


On July I, 1859, 

Funded Debt $43,601,037.69 

Treasury Notes 15,153,661.64 

Total Debt $58,754,669.33 

Balance in Treasury. ., 4,339,271-54 


1 Annual Report of the Secretary of the Treasury, i860. 

2 Congressional Globe, 1860-61, Pt. i, p. 42. 


On July I, i860, 

Funded Debt i $45,079,203.00 

Treasury Notes 19,690,500.00 

Total Debt j $64,769,703.00 

Balance in Treasury 3,629,206.00 


It has been usual to charge Secretary Cobb with dis- 
loyalty as well as with inefficiency. Even his Southern 
colleagues were not indisposed to make light of his rec- 
ord as a financier. Thus Alexander H. Stephens, writ- 
ing on February 17, 1861, says: "Toombs never lets 
Cobb pass without giving him a lick. The other night 
in high glee he told him in company that he had done 
more for secession than any other man. He had de- 
prived the enemy of the sinews of war and left them 
without a dollar in the Treasury. He did not even leave 
*old Buck,* two quarters to put on his eyes when he 
died. This is a sore point with Cobb; but Toombs 
seemed disposed to rub in the salt. Even when the skin 
was oflF he applied it to the raw." * A time came, after 
Lincoln's election, when "the Speaker's warrants on the 
Treasury, in favor of the pay of members of Congress, 
were presented and refused for want of funds ;"^ and 
John Sherman, Chairman of the Ways and Means Com- 
mittee, speaking in the House of Representatives on 
December 10, i860, said: "Most of the members are 
aware that the government has not been able to pay for 

iR. M. Johnston and Wm. Hand Browne, Life of Alexander H, Ste- 
phens, p. 386. 
2 Nicolay and Hay's Abraham Lincoln, Vol. HI, p. 2j8. 


the last week or two our own salaries and many other 
demands at New York and other places." ^ The disap- 
pearance of partisan and sectional hatreds and a better 
knowledge of the facts clear Mr. Cobb and his Southern 
associates in Buchanan's cabinet of the charge of 
actively conspiring to render the government less fit for 
the approaching combat. The composition of the cab- 
inet, drawn as it was from both North and South, and 
the state of the times generally, precluded any spirited 
exertion on the part of Secretary Cobb, if he had been 
a man of greater financial talent and of undoubted 
loyalty to the Union. 

In June, i860. Congress had found it necessary to 
authorize another loan, this time to the amount of $21,- 
000,000 for the redemption of Treasury notes and to 
meet current deficits.^ Under this grant Secretary 
Cobb called for bids on ten millions of five per cent, ten 
year bonds on September 8, i860, and he succeeded in 
negotiating the loan at from par to 1.45 per cent, pre- 
mium. Only $7,022,000 was actually taken, however, 
several bidders refusing to fulfil their engagements, and 
his report to Congress in December recommended a 
new issue of Treasury notes. He suggested that the 
public lands should be offered as a pledge for the pay- 
ment of the debt, and a few days later he resigned to 
help his state organize for secession from the Union. 
On December 17th, Congress authorized an issue of 
$10,000,000 more Treasury notes, though without heed- 
ing Cobb's panicky recommendation regarding the pub- 
lic lands, and Philip F. Thomas of Maryland, whom 

1 Congressional Globe, 1860-61, Pt. i, p. 42. 
3 Act of June 22, i860. 


Buchanan had appointed to the vacant secretaryship, 
promptly offered $5,000,000. The awards were to be 
made at rates of interest named by the lowest responsi- 
ble bidders. The credit of the United States was so 
impaired at this time that only $121,100 of the notes 
were taken under 10 per cent; the remaining bids ran 
as high as 36 per cent. Seeing that the negotiation 
must fail, a few bankers, chiefly in New York, formed 
a syndicate to buy enough of the notes at 12 per cent, 
to enable the government to pay the January interest 
on the public debt, specifying particularly that the pro- 
ceeds should be applied to that use. At sight of this 
patriotic action, other capitalists came forward to bid 
for the rest of the $5,000,000 at 12 per cent., and the 
operation was completed. 

Secretary Thomas followed Cobb's example and re- 
signed to engage in secession on January 11, 1861, hav- 
ing been in office for but a month. President Buchanan, 
compelled to reorganize his cabinet from the ranks of 
Northern Democrats, appointed to the vacancy John A. 
Dix, then Postmaster of New York City. Mr. Dix at 
once loyally exerted himself to obtain advantageous bids 
for the $5,000,000 of Treasury notes authorized by the 
law of December 17, i860, which remained and which 
Thomas had already offered to the public. Salutary 
changes in the cabinet had developed in the financial 
community a feeling of greater confidence in the gov- 
ernment, and when the bids were opened on January 
19th, they called for more than $12,000,000 at rates 
ranging from 8}i to 20 per cent. Dix awarded $3,230,- 
000 of the notes under 1 1 and the remainder, $1,770,000, 
at 1 1 per cent. 


Meantime the expenses of government increased and 
accrued and Congress on February 8, 1861, authorized 
another issue of bonds for a sum hot exceeding $25,- 
ooo,cxx), "to be used in the payment of current demands 
upon the Treasury and for the redemption of Treasury 
notes now outstanding, and to replace in the Treasury 
any amount of said notes which shall have been paid and 
received for public dues." These bonds were to bear 
six per cent, interest and run for not less than ten nor 
more than twenty years. Secretary Dix advertised that 
he would receive the bids on $8,ooo,cxx) of this issue 
and made the awards on February 23d. The loan was 
considerably oversubscribed, though at a large discount, 
being sold at rates averaging 90.47 Vio per cent.^ 

The retirement of the Southern senators and repre- 
sentatives early in 1861, opened the way for the passage 
of the Morrill Tariff Act, which would have the double 
advantage, from the point of view of its authors, of in- 
creasing the revenues and protecting domestic indus- 
tries. A provision of the new tariff law gave the Presi- 
dent of the United States authority to borrow $10,000,- 
000 more in bonds or in Treasury notes, both to bear 
interest at six per cent. Thus when Lincoln and 
Salmon Portland Chase of Ohio, whom the new Presi- 
dent had chosen to be his Secretary of the Treasury, 
came into their offices, the public debt had been increased 
over Mr. Cobb's total for July i, i860 (making some 
deductions for redemptions and conversions ) as follows : 
$7,022,000 in ten-year five per cent, bonds; $10,000,- 
000 in Treasury notes, bearing interest at rates ranging 

^ Bayley, United States National Loans, Tenth Census, p. 151 and 
Schuckers, Life of Chase, p. 210. 


from 8^ to 12 per cent., and $8,000,000 in twenty year 
six per cent, bonds, a total of $25,022,000. The legis- 
lation of recent months gave Mr. Lincoln and Mr. Chase 
authority to issue about $40,000,000 more in govern- 
ment stocks — 3, balance of some $13,000,000 under the 
act of June 22, i860; a balance of $17,000,000 ($8,- 
000,000 having been issued out of a possible $25,000,- 
000) under the act of February 8, 1861, and the $10,- 
000,000, which had just been authorized by the Morrill 
Tariff Law.^ 

Secretary Chase was a somewhat severe, ponderous 
and ostentatiously correct Puritan. Born in New 
Hampshire of old New England stock he had settled in 
Cincinnati as a lawyer. Of rising eminence in his pro- 
fession his interests drew him to political life, first as 
a Whig, though he soon developed Democratic leanings, 
more, it would seem, in a revulsion of feeling against 
the Whig party's temporizing course on the slavery 
question than because of a real belief in any Democratic 
principle. He was an uncompromising Liberty party 
man and was elected to the United States Senate by a 
fusion of Democratic and third party elements in 1849 
to serve for a full term of six years, occupying his seat 
in time to witness the last coup in the tedious pacifica- 
tion process, the enactment of the Compromise Bills of 
1850 when Clay, Webster, Benton and Calhoun prac- 
tically passed from the political stage. Afterward Mr. 
Chase served two terms as Governor of Ohio, and it 
was while at Columbus that he formed the acquaintance 
of Henry D. Cooke, then the editor of the Ohio State 
Journal. Governor Chase was financially interested in 

^ Nicolay and Hay, Vol. Ill, p. 244; Schuckers, p. 212. 

d 6y William Cogmrll, preunltd lo Iht J*"" "f Ohio 


this influential but unprofitable newspaper and was not 
without appreciation of the services it had performed 
for him, and might in future render him in realizing 
his higher ambitions. From the time of the foundation 
of the Republican party he aspired to the presidency of 
the United States; first in 1856, then in i860, when 
Lincoln was preferred over him and Seward, and in 
1864, as Lincoln's successor, freely using his cabinet 
place as a stepping stone to the higher position. Mr. 
Chase still had the office in view in 1868 and 1872. He 
strove to attain an honor which was never to be his and 
posterity judges him by his record as an honest Secre- 
tary of the Treasury and an able Chief Justice. 

It may have been with some misgivings that prac- 
tical financiers viewed Mr. Lincoln's choice of his Sec- 
retary of the Treasury, since Mr. Chase was not trained 
in their school, nor had he had acquaintance or rela- 
tionship with them or the greater movements in the busi- 
ness world. It was conceded, however, that he was the 
Republican of largest proportions after Seward and the 
ranking post in the cabinet when the Secretaryship of 
State was filled was in the Treasury Department, to 
which Mr. Chase was naturally assigned. His coming 
to the office assured the government of a careful and 
strictly conscientious administration on its financial 
side, so long as he would remain in the position, and if 
he were not the master of the mechanical details of 
Treasury management a vast gain would accrue from 
the knowledge of his unyielding integrity in the general 
issues to confront the nation in the important work of 
collecting and disbursing great sums of money in the 

impending war. Indeed if he erred it would be in the 


direction of cavilling economies and an obdurate desire 
to be and to appear honest when there was no danger 
of dishonesty. These traits, coupled with his obstinacy 
in opinion, a character devoid of humor, testiness under 
attack, some egotism and large personal ambitions 
impaired his usefulness as an administrative officer, but 
did not prevent him from performing a service for his 
country which it will not soon forget. Mr. Chase had 
two daughters, Kate and Nettie. He had been first 
married in 1834 to Catherine Jane Garniss of Cincin- 
nati. She died eighteen months later, leaving him a 
little girl who lived for only four years. In 1839 he 
married again, choosing for his second wife Eliza Ann 
Smith, by whom he had three children ; only Kate lived, 
and the second Mrs. Chase died in 1845. The next year 
he married a third time and by this wife, who was 
Sarah Bella Dunlop Ludlow, also of Cincinnati, he had 
two children. One, Janet Ralston (Nettie) Chase, lived 
but her mother survived only until 1852. Thus in 
eighteen years Mr. Chase had lost three wives and four 
children,^ and when he reached Washington he was 
a widower, which he remained, with two daughters — 
Kate, a young lady, who became the belle of Washing- 
ton society, beautiful and imperious, a bewitching diplo- 
mat of the drawing-rooms, valuable in furthering her 
father's political ambitions (later the unhappy wife of 
Senator Sprague of Rhode Island) ; and her half-sister, 
Nettie, still a young girl, subsequently Mrs. William S. 

Although Jay Cooke and Mr. Chase had not met be- 
fore the "Governor," as he was affectionately called by 

1 Hart's Chase, pp. 20-22* 


the people of Ohio, entered the Lincoln cabinet they 
were in a position easily to become the warm friends 
which they always remained. Mr. Chase had occupied 
the same platform with Eleutheros Cooke at political 
meetings in the Western Reserve and Jay Cooke's 
father had been the orator of the day at the celebra- 
tion attending the forty-fifth anniversary of Perry's 
battle of Lake Erie on September lo, 1858, when Chase 
was present and thousands crowded the little island of 
Gibraltar overlooking Put-in-Bay. Moreover, Mr. 
Cooke's brother Henry, through his newspapers, which 
warmly espoused the Governor's political causes, had 
by his loyal service and attractive social qualities be- 
come a counsellor and friend who was cordially ad- 
mitted to the statesman's confidences. Mr. Chase and 
the editor of the State Journal were often seen together 
in Columbus, and the intimacy extended to their fami- 
lies. To neither Chase nor John Sherman, who was 
following him into eminence, was it unknown that Henry 
Cooke had a brother Jay in Philadelphia who met the 
deficits of his newspapers and might be looked to in fu- 
ture for financial favors of many kinds. The debt on 
Sherman's side was materially increased when Henry 
Cooke and Rush R. Sloane of Sandusky, who managed 
the campaign in 1861 which gave him Chase's vacated 
seat in the United States Senate, drew upon Jay Cooke 
for the candidate's travelling expenses and the cost of 
one or two banquets.* 
Jay Cooke had just opened the banking house of Jay 

* Judge Sloane of Sandusky, says that in this campaign and that of 1866, 
when Sherman was reelected to the Senate, which was also financed by 
Jay Cooke, the expenses were about $3,000, an outlay which the candidate 
was unable to bear on his own account 


Cooke and Company and he was not unmindful of the 
many opportunities for business growing out of the 
political changes so entirely revolutionary at Washing- 
ton. Henry Cooke visited the national capital in the in- 
terest of his newspaper to be present at the inaugura- 
tion of the new government, and on March i, 1861, 
Jay Cooke wrote his brother asking for the earliest in- 
formation regarding the course of political affairs: 

"I see Chase is in the Treasury and now what is to be 
done ? Can't you sell out the paper and open a banking 
house in Washington and be something respectable? 
. . . How are matters ? Are we to have civil war ?" 

Henry Cooke prolonged his sojourn at Washington, 
following the startling developments of the months of 
March and April closely and intelligently. His brother 
asked to be apprised of them fully every day. Pre- 
cisely what turn their government connection would 
take they did not know, for the public need was not 
yet defined. Sherman visited Jay Cooke to see if he 
could not arrange for one of his brothers and Henry 
Cooke to become partners in some profitable business 
growing out of the change of administration and the 
probable war, a suggestion which the banker did not 
approve. Among the various plans which so rapidly 
passed through Jay Cooke's active mind was this one 
unfolded to his brother Henry on March 25th : 

I do not sec how I can get away from Philadelphia, at any 
rate until you have a confab with the Governor and see whether 
he is disposed to do anything with us. I see he has appointed 
an assistant secretary. What kind of a man is he? What we 
wish to do with the Treasury is to have the Department allow us 
to make the frequent transfers that are made from point to point 


instead of giving the business to Adams and Company. We 
can make those transfers and the Department when flush can 
give us 30, 60, 90 or 120 days time, as it is no loss to them, 
and the interest in the meantime would be clear profit and to be 
divided. It would in fact save the expense of moving gold 
from point to point. This was the mode originally adopted and 
there being no reason against it, provided honest men are en- 
trusted with the business, I don't see that there can be any 
objection to it. . . . Don't fail, dear brother, to wrfte me 
and tell me fully how things look and what the prospects are for 
war or peace. Write fully about Gov. Chase. 

The demands of the Treasur)^ were of course pressing 
and growring. Of the various expedients which Con- 
gress had left open to him as a borrower Mr. Chase 
chose the act of February 8, 1861, under which Secre- 
tary Dix had just obtained $8,000,000 on six per cent, 
long bonds at about $90 for $100. He now determined 
to offer $8,000,000 more of these bonds, and hoped that 
he might sell them at par, but out of bids aggregating 
about $27,000,000 only $1,000 were at their face value. 
Some $3,000,000 were around 94 and in the hope of 
strengthening public confidence all bids below this rate 
were rejected, the loan being closed for only $3,099,000.^ 

Mr. Chase's next step was another emission of 
Treasury notes (about $5,000,000) which were sold 
principally through John J. Cisco, the Assistant Treas- 
urer of the United States in New York. On April 8th 
Jay Cooke wrote his brother Henry a letter from which 
we learn something of his views on the financial situa- 
tion at that time: 

I am sorry you must go back to Washington to-night as per- 
haps to-morrow we could do something in the matter of the 

^ Nicolay and Hay, Vol. IV, pp. 78 and 377. Compare Schnckers, p. 213. 


Treasury notes. I did not think it advisable to-day to make any 
movement as I saw a letter from New York to Drexel and Com- 
pany, stating that Cisco had authority from Gov. Chase to 
dispose of the 5,000,000 Treasury notes at 3^, and that it was 
probable the list was all filled up. Under these circumstances 
I could not think of urging parties here to make up a list as 
it would prove labor lost. If you will telegraph me early to- 
morrow, I will see what can be done, although the warlike 
nmiors of to-day (especially the one that Pennsylvania was to 
be put on a war footing) have frightened our capitalists and 
banks and bankers amazingly. Some who had ordered Treas- 
ury notes purchased in New York telegraphed this morning to 
countermand the order. Should there be a collision you may 
rely on it there would be at first a great panic in government 
securities as also in state, city and private credits, though I 
presume that after we had got a little used to it we could recover 
our equanimity. I would advise Gov. Chase not to try too much 
to save the pennies but to keep on the right side of those cap- 
italists who are disposed to dabble in the loans, etc., of the 
government, and if they do make sometimes a handsome margin 
it is no more than they are entitled to in such times as these. 
They can be very useful to the government, and I think the 
refusal to give them the last loan when they bid so near the 
mark, has created bad feeling. Many of them are now rejoicing 
that they did not get what they bid for. The feeling has won- 
derfully changed. I repeat that the Governor should keep on 
the right side of the capitalists till he gets into smoother water. 

The sales in New York were not so large as Mr. 
Cisco had expected and some of the notes remained for 
Jay Cooke. Two days after this letter was written he 
succeeded in selling $200,000 worth,^ following this with 
other orders so that he had made his beginning as a 
national financier. His part was to be larger in the 
next operation of the Secretary of the Treasury. Mr. 

1 Telegram to H. D. Cooke at Willard's Hotel, Washington, Apr. 10^ 


Qiase was practically reduced now to the loan of $13,- 
000,000 or $14,000,000 under the act of June 22, i860, 
and the loan of $9,000,000 under the act of February 8, 
1861.^ On May 17, 1861, he wrote, explaining his 
course in reference to these alternative plans: 

My correspondence and conversation with the leading cap- 
italists of New York convinced me some time since that the 
loan of $14,000,000 restricted by law to six per cent, bonds at 
par could not be negotiated. I then determined to advertise the 
loan of $9,000,000 which was not so restricted and content my- 
self as to the other loan with acquiring the power to resort to 
Treasury notes upon the failure, which I saw to be inevitable, 
to negotiate the bonds at par. My first impression was when I 
called for the $9,000,000 loan that it would be best to accept 
for the bonds whatever reasonable rates might be offered, and 
not resort to the alternative power of issuing Treasury notes. 
The financial condition of the Department, however, proves to be 
better than I feared it would be at this time. I think it will be 
possible to carry on the government until the meeting of Con- 
gress without any serious embarrassment with the proceeds of 
the $9,000,000, if taken at par re-inforced by the ordinary 
revenues and perhaps by the use of two or three millions of 
Treasury notes out of the fourteen millions. I have therefore 
determined to accept par bids for Treasury notes (if the New 
York capitaUsts will join in making them) rather than dispose 
of the bonds at any very considerable discount. 

The $9,000,000 loan having been practically agreed 
upon Mr. Cooke wrote to Secretary Chase on April 
19, 1 86 1, as follows: 

Dear Governor: 

I write to ask of you the following question : If I get up a 
voluntary subscription or bid for one million or more of the 
remaining 9 million in Treasury notes from our banks in Phila- 

^The sale of a second lot of $8,000,000, partially taken around 94, had 
made this loan still available for only $9,000,000. 


delphia at par, convertible as before, etc., can you ag^ee that 
the money shall be disbursed here, or otherwise allow me so to 
arrange it that our banks (already burdened by government 
loans — loans to city and state) shall not be deprived at once 
of this amount in coin when their own issues will answer every 
purpose of payment here ? Our banks are full of patriotism and 
anxious to do all they can to aid you in carrying on the Treas- 
ury operations. They have been asked by the New York Com- 
mittee to furnish a portion of the 9,000,000 which you will 
probably advertise for shortly, but wish to operate with you 
directly if the above can be arranged. 

Our banks wish to continue specie payments, and to do this 
must be careful how they loan any considerable portion of their 
specie capital. I have assured them that I thought you would 
put the matter in my hands to meet their views in this respect, 
and I will add that I think it highly important that if not legally 
impossible you will favor them in this way. 

It is also important that our capitalists and banks should be- 
come more interested in government loans than they have been 
— a large debt will not hurt the cause of the Union. 

I am acting in this matter in a private capacity, and whether 
I see my way clear to accept the office tendered me or not I 
shall give my time and energies to these matters of finance. 
Philadelphia is proverbially a small field compared with New 
York. Our bank capital is only 11 million, whilst New York 
has 66 and Boston 30; but to the extent of our ability we will 
no doubt respond to all calls. 

Sincerely and respectfully yours. Jay Cooke. 

The allusion to the "office," which had been tendered 
him is explained by the following letter from Mr. 
Chase : 

Washington, April 20, 1861. 
My Dear Sir: 

At my special request the President the other day consented 
to appoint you Treasurer [?] of the Mint and Assistant Treas- 


It IS an office of great responsibility and I was moved in the 
selection of yourself partly by my confidence in your eminent 
qualifications, partly by the regard I feel for your family, and 
partly by my sense of your services in the matter of the Treasury 
note loan and my confidence in your future services of like 
nature when required. 

I know the office cannot be very attractive to you and you 
may be compelled to make some sacrifice in the way of business 
in order to accept it. Still I hope unless the sacrifice be too great 
that you will. 

The rebels seem determined to shut us up here. The whole 
loyal Union should rise as one man. 

Yours truly, 

S. P. Chase. 

Jay Cooke, Esq. 

Mr. Cooke did not immediately decline this proflfer of 
an office then held by J. H. Walton, President Buchan- 
an's appointee, and when Secretary Chase replied to the 
inquiries regarding the manner of disbursing the money 
subscribed by the Philadelphia banks he again took oc- 
casion to urge Mr. Cooke to accept the post : 

Whatever the Philadelphia banks subscribe for, whether bonds 
or Treasury notes, may as well remain with the Assistant 
Treasurer at Philadelphia until disbursed as anywhere else. 
When disbursed it will probably be paid out principally in Phil- 
adelphia and returned to the banks. I am glad to learn from you 
that the Philadelphia capitalists propose to take a larger interest 
in government loans than heretofore. You must not fail, un- 
less your business imperatively requires it, to accept the position 
tendered you by the President. 

On May 15th Mr. Cooke in a letter to the Secretary 

Rest assured, dear Governor, that if I could, without violence 
to many interests entrusted to me, step into the position assigned 


me I would do so. As it is I am compelled to decline for the 
present any call that would require my giving up entirely my re- 
cently formed business engagements. Under any circumstances 
I desire that you will show me further evidence of your con- 
fidence by calling upon me at all times when my services are 

Henry Cooke was to visit Governor Chase and ex- 
plain the situation, Jay sending his brother * some 
memoranda to guide him in the conversation with the 
Secretary : 

First — Assure the Governor of my gratitude for his offers to 
me, and explain briefly how impossible it is for me at once to 
bring my extensive business arrangements to a close, saying that 
unless you could come on and represent me for a large portion 
of the day I should have to decline but that I will consider it a 
duty to hold myself at all times ready to serve him by advice 
or active efforts in the matter of loans. 

Secoyid — If it is in his power he might confer on me in order 
to bring me officially in connection with him one of those posi- 
tions as a secret agent of the Treasury Department. If he gives 
this to you it will suit as well and perhaps better. I understand 
that the duties of such a position are quite nominal and that the 
salary is merely nominal, not over 12 or 1500. 

Third — In view of the almost total annihilation of parties 
in this quarter and also the faithfulness of the present incumbent 
Mr. Walton, once a Democrat; the difficulty of finding honest 
parties who can furnish the required bona fide unincumbered 
real estate security ; the length of time required to become famil- 
iar with the duties, etc., etc., would it not be a just tribute to 
the Democrats to allow Mr. Walton to remain? I have taken 
pains to inquire as to his administration of the office and find 
that it is entirely satisfactory. He comes from a most patriotic 
portion of Pennsylvania (Easton), a district that has sent to the 
wars thousands of his neighbors and friends. With not the 

^ May 15, 1861. 


least desire to dictate to Gov. C. I ask would it not be well to 
allow Mr. Walton still to remain, at least for the present, 
especially as in a few weeks or months we may see our way 
clear to go into the position, and besides to put a stopper to the 
innumerable applications that will be made for these offices if it 
is announced that they are vacant. There is one party especially 
I wish you to warn the Governor about, viz. Mr. Edward M. 
Davis, a son-in-law of Lucretia Mott and a violent Abolitionist 
and one of those who I am informed aspires to this position. 
I have nothing to say as regards Mr. Davis's talents, or his past 
history in business matters, or his religious (or rather want of 
Qiristian) principles,^ but I wish to state that as one of those 
who have so long refused to vote, openly slandering our Con- 
stitution, one of the few of the rabid Abolitionists of this neigh- 
borhood who have done all they could for years to bring about 
our present troubles by inflaming the bad passions of the South, 
any appointment of this kind so prominent, so public and re- 
sponsible would deeply injure the cause we are engaged in. 
He would not have the weight of a feather's influence with 
capitalists, banks, etc. In fact if the government placed so 
obnoxious a man in such a position I am sure (and I speak ad- 
visedly) the effect would be extremely disastrous. I beg and 
implore the Gov. not to let any influence, however strong it 
may be, to induce the President or himself to listen for a 
moment to this proposal. If Mr. Walton is not retained, as I 
really hope he may be for the present, there are plenty of first 
rate original Republicans of high character who would be of 
use to the government, and who would gladly take the post. I 
do not mean politicians but bank men who have influence and 
character of the highest degree. Mr. Davis has just been in 
and I have frankly stated that he should not, if he has any 
regard for the government, intrude himself prominently before 
the people at this critical time, and I think he agrees with me 
and may not apply. If he does I want Governor Chase to know 
what 99 out of loo here would think of such an appointment. 
It would be disastrous. 

^Mr. Davis was a Hicksite Friend. 


It is clear that Mr. Cooke was much more deeply in- 
terested in securing subscriptions for the pending loan 
than in taking possession of a small salaried office at the 
head of the sub-treasury in Philadelphia, although ac- 
tively concerned that it should be in suitable hands. 
While he might have been very useful to the government 
in such a post the occurrences of the next few years at- 
test to the falsity of Mr. Chase's theory that it was his 
duty to take a place in charge of a local bureau when the 
country soon would need him in a great national sphere. 
His energies would carry him far beyond the bounds of 
city or neighborhood. He had ambitions which could not 
be satisfied, and talents which destiny would not permit 
to be consumed at a desk, where the rules and regulations 
of a government department would have prevented him 
from performing for his country his great service in its 
hour of trial. 

The subscription list prepared for the $9,o<X),ooo loan 
and headed in Mr. Cooke's bold hand is preserved and 
reads as follows : 

Philadelphia, May 21, 1861. 

We, the undersigned, the representatives of banks and other 
institutions and individuals, in view of the present exigencies 
of the general government, and deeming it of great importance 
that a prompt and liberal response should be made to his pro- 
posals for nine millions of loan or Treasury notes, said proposals 
to be opened on the twenty-fifth inst., do hereby subscribe each 
for themselves the following amounts for six per cent. Treasury 
notes as specified in the advertisement of the Secretary of the 
Treasury under date of twentieth instant. 

Mr. Cooke's success, although now allied with 
Anthony J. Drexel's older and better known house, 


was by no means so great as he hoped it would 
be and on May 24th he wrote his brother Henry : 

I am sadly disappointed this day in not being able to make 
a larger bid for loan and Treasury notes from Philadelphia. 
Toney Drexel and Company and myself have spent most of the 
time this week in pulling the wires of our banks and have only 
succeeded in getting 300,000 bid for. Of course this is just that 
much more than would have been offered for if I had not taken 
an interest in it. If we had two or three days more to work in 
I am sure we could have made it perhaps a million. Several of 
the banks would not offer as they could not do so till they had 
consulted the regular boards. Others declined because they had 
already a load of state and city stock, but would no doubt have 
taken a part if we had had time to talk to the managers. Besides 
we did not see any of our insurance companies — could not pos- 
sibly get the time — but we expect to lay the lines broad and 
strong for the next loan and hope to do better. Tell Chase how 
I have worked against the current and how Drexel and Company 
have forgotten their disappointment about the previous loan and 
are now working heartily with me. E. W. C. and Company 
[Clarks] also. The $3,000,000 state loan comes on the market 
next week and as it has to be taken here our banks felt that they 
must look to it first. 

The result of this operation was the sale of $7,310,000 
of the bonds at rates varying from 85 to 93 per cent., 
nearly all at the lower rate, and $1,689,000 in Treasury 
notes at par, a rather unfavorable return, but all that 
even the warmest friends of the government had a right 
to expect at a time when the military outlook was dark 
and the country was yet in no state to meet the demands 
made upon it by a constantly widening area of de- 
termined and dangerous rebellion. 

Mr. Cooke writes of this period in his Memoirs as 
follows : 


"At the very beginning, and some three months before 
I became acquainted with Secretary Chase personally, 
I had sent him various large sums gathered as subscrip- 
tions from the banks, insurance companies and other 
corporations of the city of Philadelphia and the sur- 
rounding country. There seemed to be no one to whom 
this duty had been entrusted. In fact all financial in- 
stitutions and all capitalists were very much demoralized 
and it was as much as each could do to maintain his own 
position and credit without voluntarily weakening them 
by advances to the government. As I had not been in 
regular business for three years previous to the first of 
January just passed, and had only at that time re-entered 
the banking business, I had no entanglements or obliga- 
tions. Having had many long years of experience in 
negotiating loans for the government, railroads, etc., 
I felt it my duty to give a portion of my time and eflforts 
to the work of raising funds for the use of the Treasury 
of the United States, and this work I undertook, and 
succeeded in, to the extent of many millions of dollars 
without hope of or expectation of commissions or re- 
wards of any kind." 

Mr. Cooke's experiences as a state and national loan 
agent now led him to think of the establishment of a 
Washington house which would stand in close relation 
to the Treasury Department. He spoke to his friends 
"Ned" and Clarence Clark, who, however, were unwill- 
ing to join in the undertaking unless Mr. Cooke would 
consolidate his bank with theirs in Philadelphia.^ This 
plan was abandoned therefore and he turned to the 
Drexels, with whom he had been co-operating in recent 

1 J. C. to H. D. C, July 10, 1861. 


Joan negotiations — ^not because of any vigor or sincere 
interest which they manifested in the work, but solely 
in view of the advantages which were to be gained by as- 
sociation with a house older, and, at this time, of greater 
wealth and influence than his own. 

On July 12, 1861, Mr. Cooke wrote to Secretary 
Chase stating his plans as follows : 

After some days' negotiation I have to submit the following 
for your consideration: Messrs. Drexel and Company of this 
dty are willing to join our house in opening a first-class bank- 
ing establishment in Washington at once, trusting to our energy, 
capital and credit for success as well as those natural ad- 
vantages that would legitimately and honestly flow towards us 
from your personal friendship, and the fact that our firm was 
ardently and fully with the administration. Drexel and Com- 
pany and ourselves would represent at least 2J/^ to 3 millions of 
capital^ not all in cash nor all immediately available, but still 
good as a basis. Without referring to our own standing and 
credit which we may say is after 22 years' active business in 
this city now on a firmer basis than ever, we would refer to 
Drexel and Company as the heaviest house in Philadelphia with 
correspondents all over this land and doing also a heavy busi- 
ness in Germany. Mr. Reed, their New York partner and 
active agent there, has probably transacted more business in 
government loans and Treasury notes than any other New 
York firm and is the particular friend of Mr. Cisco, standing 
very high as a business man. We propose to give personal 
attention to the business at Washington with a view to making 
our services valuable to yourself during the coming three or 
four years. Mr. A. J. Drexel (the head of the house of Drexel 
and Company) and myself will reside in Washington most of 
the time, and in this arrangement we shall include my brother, 
H. D., who will have a share in the profits. We would wish 
to make our business mostly out of the Treasury operations and 
we feel sure that we could by having a proper understanding 
with yourself greatly help you in the management of your vast 


negotiations. At the same time if we could not thus prove 
our value to you we should not expect your continued influence 
and favor. You have to raise hundreds of millions. A fund 
of at least ^ of one per cent, should be placed at your discretion 
for the purpose of carrying out such plans as cannot fail to save 
the government (in our estimation) ten times that amount and 
perhaps much more besides, insuring prompt success. We have 
such plans (digested) as could not fail to carry you through 
triumphantly. We could not be expected to leave our com- 
fortable homes and positions here without some great induce- 
ment and we state frankly that we would, if we succeeded, 
expect a fair commission from the Treasury in some shape for 
our labor and talent. If you feel disposed to say to us, if our 
plans commend themselves fully to your judgment, that you 
will give us the management of the loans to be issued by the 
government during the war, allowing us a fair commission on 
them, subject of course and entirely to your supervision and 
advice, we are ready to throw ourselves into th« matter heartily 
and will go down and have an interview with you, explain our 
plans and if encouraged by you go to work at once. 

Henry Cooke was urged to get from Chase distinct 
promises of business for the new banking establishment. 
'Toney is not willing to form the house without some 
definite understanding/' Jay Cooke wrote his brother ^ 
and as this could not be had the plan must rest until 
other arrangements could be eflfected. 

"Tell Governor Chase," said Jay Cooke in a letter of 
instructions to his brother in Washington, "that I hold 
myself at his service and, pay or no pay, I will do all I 
can to aid him in Treasury matters. I feel, however, 
that if he would give me a chance I could show him a 
way to raise the money/' 

Thus stood the Treasury and Mr. Cooke when Con- 

1 July 12, i86i. 


gress met in its special session in July, 1861. Mr. 
Chasers estimates for the fiscal year ending June 30, 
1862, called for expenditures aggregating nearly $320,- 
000,000 and he proposed to obtain some $80,000,000 by 
taxes, — increasing the duties on imports and levying di- 
rect internal taxes^ — and $240,000,000 by loans. Con- 
gress passed the tax bills which he had recommended 
and promptly authorized him "to borrow on the credit 
of the United States within twelve months from the pas- 
sage of this act $250,000,000, or so much thereof as he 
may deem necessary for the public service." ^ As 
certificates for this debt he might oflFer to lenders coupon 
bonds, registered bonds or Treasury notes at his choice, 
the bonds running for twenty years and bearing in- 
terest at seven per cent, and the Treasury notes for three 
years with interest at the rate of 7 3-10 per cent., con- 
vertible by the supplementary act of August 5, 1861, 
into six per cent, twenty year bonds. Moreover, $50,- 
000,000 of the whole amount the Secretary at his option, 
if the conditions favored it, might issue in non-interest 
bearing Treasury notes of a less denomination than $50, 
payable on demand, soon popularly called "demand 
notes.'* Or if he preferred he might put out Treasury 
notes bearing interest at the rate of 3 65-100 per cent, 
payable in one year and convertible into 7 3-10 per cent, 
three year notes. Finally to serve temporary purposes 
he might emit $20,000,000 of six per cent. Treasury 
notes, payable at any time not exceeding twelve months 
from date, this being an additional grant which raised 
the entire amount of the loan to $270,000,000. It was 
specifically stipulated that $100,000,000 of the loan 

1 Act of July 17, 1861. 


might be sold in Europe. Thus the Secretary had many 
alternatives and much room for the play of his indi- 
vidual judgment. The loan and revenue bills were of 
his own framing * and in passing them Congress had but 
given him the means of developing his own policies. 

Until he could perfect his various arrangements and 
to obtain temporary relief, the Secretary resorted to the 
issue of short term Treasury notes, hoping with the 
whole loyal North that the country's affairs would early 
come to wear a happier aspect. The people were rudely 
undeceived by the news of the battle and flight at Bull 
Run. It aroused Jay Cooke as the tidings of the battle 
of Lexington stirred Israel Putnam while he was in the 
ploughing field in Massachusetts. "Old Put'* left his 
furrow unfinished and rode off to the war; Jay Cooke 
dropped all other occupations and visited his fellow 
bankers and brokers. 

The Philadelphia Inquirer had sent a young man from 
West Chester, Pa., to forward it the news of the "Grand 
Army's" triumphal progress to Richmond. After an 
apparent victory for the North — on Sunday, July 21st — 
the retreat of the Union troops was so unexpected and 
sudden that the war correspondent, in his great eager- 
ness to see everything, found himself detained inside the 
Confederate lines, and persuaded a Federal attendant 
at an improvised hospital station to allow him to appear 
as an assistant. When the Confederates came up they 
were suspicious but passed Mr. Painter, whereupon he 
quickly determined to escape to Washington with the 
news of the defeat for his paper. He caught a wounded 
army horse which was rushing through a wood, without 

^Schuckers, p. 22a 



saddle or bridle, and mounting rode away clinging to 
the mane of the animal. Edmund Clarence Stedman, the 
poet, then on the New York World, was also mounted 
and after thrilling experiences, Mr. Painter and he 
reached Washington at dawn of Monday morning. 
Finding that a censorship had been established over the 
telegraph the young Inquirer correspondent boarded the 
first train going north. Because of physical tire, 
aggravated by the heat and dust of the long ride, he 
sank on the floor of the baggage car and slept until he 
came almost to Philadelphia. Amazed to see him at 
the newspaper office, the editors berated him for having 
deserted his post. Why was he not with the army on 
its way to Richmond? He said that the troops were 
rushing into Washington with the "rebels" at their heels. 
Immediately bulletins were issued and indignant disbe- 
lieving crowds collected threatening to wreck the In- 
quirer office for spreading "Copperhead news." The 
mayor was appealed to for police protection for the 
building. The young correspondent staked his life on 
the truth of his statements and before night there was 
abundant confirmation of all that he wrote. 

Jay Cooke's bank was but a few doors from the In- 
quirer building. Without authorization from Chase or 
anyone else he set out upon his tour of the banking dis- 
trict in the midst of the unexampled excitement of the 
hour. A paper was drawn up and he collected nearly 
two million dollars for the government in a few hours. 

It was headed as follows : 

11:30 a. m. 
Philadelphia, July 22, 1861. 
The undersigned agree to advance the Secretary of the Treas- 
ury of the United States the following sums for a period of 


sixty days with six per cent, interest, returnable by the gov- 
ernment in specie or in Treasury notes bearing 7 3-10 per cent, 
interest at the option of the lenders. 

The following signatures were appended : 

C. H. Rogers, President Tradesmen's Bank $ 50,000 

Joseph Patterson, President Western Bank 75,ooo 

J. B. Austin, President Southwark Bank 50,000 

Isaac Koons, Bank of Northern Liberties 100,000 

Drexel and Company 50,000 

C. T. Yerkes, Cashier [Kensington Bank] 50,000 

The President and the Directors of the Insurance Com- 
pany of North America 25,000 

Charles Dutilh, President Pennsylvania Company for 

Insurance, etc 300,000 

George K. Ziegler, President of Bank of Commerce. . 50,000 

E. Dallett, President Bank of Penn Township 50,000 

Joseph S. Riley, Jr., Cashier City Bank 30,000 

Delaware Mutual Safety Insurance Company, Wil- 
liam Martin, President 25,000 

James Dunlap, President Union Bank 20,000 

D. B. Cummins, President Girard Bank 50,000 

E. S. Whelen and Company 10,000 

John Jordan, Jr., President Manufacturers' and Me- 
chanics' Bank 50,000 

A. G. Cattell, President Commercial Exchange Bank 25,000 
Thomas Smith, President Bank of North America. . 100,000 
Joseph Jones, President Commercial Bank of Pennsyl- 
vania 100,000 

Do. 25,000 

Alexander Benson 20,000 

Work, McCouch and Company 10,000 

Thomas Robins, President of the Philadelphia Bank. . 150,000 

James V. Watson, President Consolidation Bank 20,000 

J. Wiegand, Jr., Cashier Mechanics' Bank 50,000 

C. and H. Borie 10,000 

W. H. Newbold, Son and Acrtsen 10,000 


S. A. Mercer, President of the Farmers' and Me- 
chanics' Bank $ 200,000 

J. B. Mitchell, Philadelphia (additional) 25,000 

T. C. Henry, Vice President Saving Fund Society of 

Germantown and its Vicinity 7»500 

Total $i,737»5oo 

The excitement was intense and the streets seethed 
with people. Surprise and disgust gave way to a feel- 
ing of settled determination. Mr. Cooke's friend, 
Henry D. Moore, the Treasurer of Pennsylvania, wrote 
from Harrisburg, July 23, 1861 : 

"I returned this morning from Broad Top to hear 
very bad war news. Won't this knock down our state 
loan and everything else? It is too bad. I have not 
heard the particulars but it appears to me there must 
have been bad management somewhere. However they 
have got to be licked at all costs and will be.'' 

These words create more amusement at this day than 
when they were uttered. The militiamen's holiday at 
Bull Run was followed by years of the grimmest war 
fare by great armies of seasoned soldiery not antici- 
pated by Mr. Moore, who, however, had expressed the 
sentiment of the entire loyal North that the rebellion 
must be suppressed, cost what it might. 

The expenses of the war were about one million dol- 
lars a day in the summer of 1861 and they would be 
increased to one and a half millions during the last 
quarter of the year. Mr. Cooke on the day he received 
the news of the rout at Bull Run had anticipated Chase's 
course under the new loan bill and such prompt and suc- 
cessful action undoubtedly suggested to the Secretary a 
method of making similar use of the New York and 


Boston banks in the emergency. Seeing what had been 
done by Cooke in raising money upon the security of 
the newly authorized three year Treasury notes bearing 
interest at 7 3-10 per cent, he went to New York in 
company with the Philadelphia financier. With Assist- 
ant Treasurer Cisco, who was well known to the 
moneyed men of a community in no way noted for its 
loyalty during the war, because of the foreign and sel- 
fish commercial influences congregating there, Mr. 
Chase appeared before the Chamber of Commerce and 
for several days sought to inspire the bankers and capi- 
talists with a sense of their duty to the government. 
The banks finally associated themselves for the purposes 
of a loan and their representatives, in junction with com- 
mittees from Boston and Philadelphia, on August 14th, 
contracted to advance $50,000,000 to the Secretary of 
the Treasury on his warrants, he meantime appealing 
to the people to subscribe to the notes. As soon as they 
were sold by his fiscal agents he promised to pay over 
the proceeds to the Associated Banks. If any notes re- 
mained at the end of the operation they would be de- 
livered to the lenders to be sold by them on their own 
account, or held for redemption by the government or 
for conversion into six per cent, long lx)nds. The 
bankers were given the privilege, although probably 
few of them expected to embrace it, of taking upon 
similar terms another $50,000,000 lot of the notes in 
October and a third lot of $50,000,000 in December. 
The three cities were to contribute according to their 
banking capital. New York taking $35,000,000, Boston 
$10,000,000 and Philadelphia $5,000,000. These were 
the earliest "seven-thirties," later a famous note in the 


hands of Jay Cooke and Secretaries Fessenden and Mc- 
CuIIoch. It seems to have been Mr. Chase's idea that 
seven and three-tenths cents on a dollar, or $7.30 on a 
$100 bond, which was just two cents for each day in the 
year, would prove to be an attractive feature of the 
loan, but it was not until Jay Cooke established his 
wonderfully effective machinery for advertising govern- 
ment bonds and distributing them in prodigious quanti- 
ties among the people that the convenient interest rate 
assumed any particular significance. 

Mr. Cooke's recollections of the negotiation of this 
$50,000,000 loan, properly considered the first of the 
great war loans, were vivid. He writes in his Memoirs : 

"Having become favorably known to Mr. Chase, and 
as the result of some correspondence, he stopped on his 
journey to New York and called to see me, inviting me 
to go with him to meet the Associated Banks and to 
aid him in the negotiation of the $50,000,000 he required 
immediately. I went to New York with him and was 
present at all the meetings with the presidents of the As- 
sociated Banks, giving him my advice and all the aid I 
could in that transaction. In those days this was a 
negotiation upon a gigantic scale and, being successfully 
accomplished, greatly cheered and comforted all the 
friends of the government and I have always contended 
that the Associated Banks deserve lasting gratitude for 
the support they then gave the Treasury at a most 
critical period. Returning to Washington, Mr. Chase 
met the Committee of the Associated Banks within a day 
or two and completed the forms of the negotiation. I 
was at Washington also and remember a dinner that 
was given at Willard's Hotel, at which I was present, 


on the evening before the day the bank presidents re- 
turned to New York. Many congratulatory speeches 
were made, one by the president of the Bank of Com- 
merce somewhat in these words: 

" 'Mr. Chase, you have now received from the Asso- 
ciated Banks the vast sum of $50,000,000. We all 
earnestly hope that this sum will be sufficient to end the 
war. Should it not prove enough we wish to notify you 
that you cannot depend upon further aid from the Asso- 
ciated Banks. We are glad that we have decided to 
come thus to the support of the government but we owe a 
duty to our stockholders and dare not encroach further 
upon their rights. We must safely guard those inter- 
ests committed to our care. Therefore husband the re- 
sources under your control for this is all that can be ex- 
pected of us.* 

"I thought at the time that this prognostication was 
a fearful one but as the years passed and this $50,000,- 
000 was expended, and many more sums of equal 
amount, until nearly sixty times this sum of fifty millions 
had been contributed by the banks and the people the 
mistake became apparent. The remark of the president 
of the Bank of Commerce, while he was honest and sin- 
cere in what he said, testifies how little he and all others 
appreciated the gigantic character of the struggle im- 
pending. Alas we were to have more than four years 
of battle and strife in which millions on both sides were 
to contend and thousands of millions of dollars would 
be required to sustain the conflict.'' ^ 

1 Cf. Schuckers, p. 227, who says that Mr. Chase, when in New York, 
threatened the bankers with paper issues if they did not accede to his 
wishes. " If not," said he, " I will go back to Washington and issue notes 


So important a service did the taking of this loan 
seem to be in the view of the New York bankers that 
they assumed a kind of proprietary interest in the 
Lincoln administration and wished to say in what man- 
ner it should conduct the war. They had resolved 
"that this meeting in assuming the grave responsibility 
of furnishing means to sustain the government in this 
important crisis beg leave respectfully to express to the 
President of the United States its confident expectation 
that the government will without respect to party or 
personal considerations so conduct its affairs in every 
department of administration as to insure vigor, in- 
tegrity, economy and efficiency to the triumphant termi- 
nation of the war." Very soon it was urged by these 
interests that the President was not meeting the bank- 
ers' high expectations.^ A delegation of them appeared 
in Washington making no secret of their errand. Mr. 
Lincoln by his management of the war had incurred 
their displeasure and as they were paying the costs of 
it they had come to recommend to him changes in his 
military policy.* 

While on his visit to Washington Mr. Cooke was 
winning the confidence of and deepening his friend- 
ship with the Secretary of the Treasury. Already Mr. 
Chase and his daughters were visitors at the bank- 
er's home, "The Cedars," which he had purchased some 

for circulation; for it is certain that the war must go on until the re- 
bellion is put down if we have to put out paper and it takes a thousand 
dollars to buy a breakfast." See also, Hart's Life of Chase. 

1 New York Herald, Aug. 19, 1861. 

* " The fact that these gentlemen represent the fifty million which the 
banks have subscribed to the national loan gives them no prescriptive 
right to obtrude their views upon the government." — Phila. Inquirer's 
Washington correspondence, Aug. 30, 1861. 


years before in the Chelten Hills, a few miles north of 
Philadelphia. On June 13th Jay Cooke wrote his 
brother Henry: "Kate Chase spent Tuesday night 
with us. She is a glorious girl." The warm-hearted 
financier had gathered up the Secretary himself, when 
he came to the city after the battle of Bull Rim for a 
conference upon the subject of the $50,000,000 bankers' 
loan, and had taken him out to "The Cedars. '* His 
little daughter Nettie remained for a visit while he 
and Mr. Cooke went on to New York. "Give my 
warmest love to my dear Nettie and kindest remem- 
brances to Mrs. Cooke and your dear children, cor- 
dially your friend, S. P. Chase," the Secretary of the 
Treasury wrote to Mr. Cooke from Washington on 
August 1 6th. On September ist she was still at "The 
Cedars," for Kate Chase who was in New York wrote : 

My dear Mr, Cooke: 

I very much fear my little sister has stayed too long with you 
and quite worn Mrs. Cooke's patience out. I under stbod you 
she was to go to Atlantic City and remain there with the chil- 
dren. ... It will be impossible for me to leave for Phila- 
delphia on Monday as I had expected to, because my escort has 
failed me. But I leave on Tuesday morning at eleven, I think. 
Will it be asking too much of you to send any letters that may 
come for me to the Continental. I am expecting orders from 
headquarters respecting my further movements and desired father 
to send them to your care. 

On August 20, 1 861, during Mr. Cooke's absence at 
the capital, in conference with Chase, his partner, Will- 
iam G. Moorhead, wrote as follows : 

Dear Jay: 

We received your telegraph. Don't leave Washington so long 
as your presence benefits Governor Chase, the government of 


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these United States or the good firm of Jay Cooke and Company, 
provided nevertheless that that period extends not beyond Satur- 
day next. The affairs of the office seem to be in proper shape. It 
is a loss in dollars and cents to have you absent. The boys seek 
no business and do as little as possible but you are on a good mis- 
sion, one that must not only result to benefit of our worthy Uncle 
Sam, but some way or other to that of yourself and house. 

It was while in Washington on this mission (August 
21, 1861) that Mr. Cooke had his first meeting with 
President Lincoln which was always so pleasantly re- 
membered, and of which he writes in his Memoirs : 

"I was a guest at Mr. Chase's house and after a mid- 
night session we adjourned until after breakfast the next 
morning. We were in his library hard at work again 
when at about ten a. m. a servant appeared and an- 
nounced that President Lincoln was at the door in a 
carriage with Attorney General Bates and wished to see 
Mr. Chase. The Secretary very impatiently arose and 
went out, soon returning with the information that all 
the members of the cabinet with their ladies were going 
out to Tenallytown (some seven miles beyond George- 
town) to see General McCIellan drill the Pennsylvania 
Reserves of 10,000 men. Mr. Chase explained to the 
President that I had come on from Philadelphia and 
that we were holding an important conference regarding 
a new loan. He asked therefore to be excused, but Mr. 
Lincoln insisted on his going, telling him to bring Mr. 
Cooke with him, so we finally concluded to go. Thus 
in this carriage we four journeyed to Tenallytown, Mr. 
Lincoln evidently enjoying the holiday. Seeing Mr. 
Bates's black hair and white whiskers and mustache I 
remarked to him that he reminded me very much of my 
father who had not a gray hair in his head, but that 


whenever he attempted a beard he found that it came 
out white, and as he did not like such evidences of old 
age he did not wear one nowadays. What excited my 
curiosity particularly was the fact that the whiskers 
were gray and white while the hair of the head, pre- 
sumably 1 8 to 25 years older, remained of an almost 
youthful appearance. I begged for an explanation. 
Mr. Lincoln here remarked, with a quizzical look across 
to Mr. Bates: 

" 'Oh, Mr. Cooke, that is easily accounted for." 
" 'Ah,' said I, 'I shall be glad to know the reason.' 
" 'Well,' said Mr. Lincoln, 'it could hardly be other- 
wise and the cause is that he uses his jaws more than 
he does his brains.' 

"We all laughed heartily at this impromptu and 
original joke at Mr. Bates's expense and, as I gave the 
substance of the above to some newspaper men the next 
day it was published far and wide as one of Lincoln's 
original sayings. 

'*We soon reached the encampment and General Mc- 
Clellan and his fifty or sixty officers dressed in all the 
adornments of their rank gathered around the Presi- 
dent's carriage. Thus the review began and as each 
division of this splendidly equipped army marched by 
to the music of the bands General McClellan explained 
their character and uses to Mr. Lincoln — cavalry, ar- 
tillery, sharpshooters, skirmishers and the several 
divisions of the regiments. It was a grand army perfect 
in drill and precise in every movement After a while 
McClellan remarked to the President (and I was led to 
very deep thought thereby) that he saw before him a 
larger army than that employed in the late war with 


Mexico m its march from Vera Cruz and its conquest of 
the capital city with the celebrated forts surrounding it in 
the very heart of that nation. This was indeed true for 
General Scott's army engaged in the conquest of Mexico 
consisted of less than ten thousand men. I could not 
but be struck with the comparison and at once saw 
clearly that our present contest was a fearfully under- 
estimated one, for already at that time we had over 
half a million of armed men on our side alone and as 
many opposed to us." 

Jay Cooke's name was now seen frequently in the 
newspapers and his growing fame was viewed with the 
deepest pride by his father in Sandusky, Eleutheros 
Cooke, the old patriarch of Webster's time in American 
politics. On August 25, 1861, he wrote: 

My Dear Jay: 

Yours from the Treasury Department of the 20th was duly 
received. You are doing right and nobly to devote your time 
and talents to your country at this trying crisis of her perils 
and it gives me unspeakable pleasure to know that they are highly 

I hope with such pilots as yourself and Chase the good old 
financial ship will be able to weather the terrible storm which 
threatens her destruction. If to have nobly aided in furnish- 
ing the sinews of war, without which the most skilfully planned 
campaigns against the traitors in arms for the overthrow of 
the government would be in vain, can be truly said of you as we 
know it can, then indeed you will have achieved an honor more 
truly substantial than the combined glory of all the heroes in 
the field who are thus enabled to fight our battles and rescue 
our country from destruction. 

It was doubtless this conviction which placed you the next 
day after the date of your letter in the splendid cortdge above 
the military in the same carriage with the President and his two 


best constitutional advisers — the place which should otherwise 
have been occupied by Seward — an honor to which no other 
civilian on a similar occasion ever attained. 

I hope, my dear Jay, you will not be disappointed in your 
efforts to place the finances of the government upon a solid 
basis, though the expenditures are so immense that it seems 
impossible. When, however, it is considered that every thing 
is at stake, even the very life of the government without which 
all the property of the people would be destitute of protection 
and therefore utterly worthless, it would seem that, if necessary 
to preserve the republic, all the wealth and one-half the lives 
of the country should be freely oflfered. 

Never, no, never, while a Northern patriot survives or a dollar 
of Northern wealth remains unexpended to maintain the blood- 
bought heritage of our fathers should we cease to defend that 
heritage with our property asd our lives. 

Mr. Chase nov^ returned to Philadelphia, being again 
the guest of Mr. Cooke. On the morning of September 
4th the Secretary was introduced by his host to a large 
number of bankers in the parlors of the Continental 
Hotel. The financial policy of the government was be- 
ing formulated wisely and carefully after a full discus- 
sion of the situation with the leading practical authorities 
in the country's money centers, Mr. Cooke standing 
through it all at Chase's right hand. He was marked 
among them for his confidence and enthusiasm. Chase 
felt him to be a man beyond others upon whom he could 
lean in a time of general doubt, suspicion and fear and 
of particular interest were his assurances that he could 
sell large loans to the people. 

His theories were at once to be put to a test in a small 
way by his appointment as one of a large number of 
agents, mostly state bank presidents and the officers of 
other financial institutions whose influence in their re- 



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by them from sixty-eight people on Thursday. One gentleman 
had $10,000 in one bag slung over his shoulder. Another of- 
fered $20,000 and many amounts were between tliese two figures. 
All classes may at last congratulate themselves that they have 
here found a stock that will be perfectly safe. This, especially 
to persons of small means who have lately been victims of 
swindling institutions, is a great mental relief. 

Later the house was kept open from eight in the morn- 
ing to five in the afternoon and on Monday evenings 
until nine o'clock that workingmen might bring in their 
savings and buy seven-thirty notes, many of whom did 
so. On September 13th Mr. Cooke wrote in the article 
in which he daily gave the list of the subscribers to the 
loan : "In the last six days about 800 persons have sub- 
scribed, nearly amounting in numbers to a regiment. 
Their charge of money bag^ is quite as efficient as a 
charge of bayonets. When it is considered that each 
one of these subscribers requires a verbal explanation 
of the loan from Mr. Jay Cooke we may form an idea of 
the amount of talking performed by him." ^ 

Of some fifteen hundred employees in the transporta- 
tion department of the Philadelphia and Reading Rail- 
road in Philadelphia about one thousand, it was an- 
nounced on November 2, 1861, by an officer of the com- 
pany, had become subscribers to the loan, authorizing 
trustees to deduct a certain sum from their monthly 
wage accounts for application to this patriotic purpose. 
Mr. Cooke raised over the door of his office an American 
flag upon which were inscribed the words "U. S. Sub- 
scription Agency for the National Loan." He was al- 
ready impressed with the importance of exchanging 
bonds for the services of contractors and for military 

1 PhilsL Inquirer, Sept. 13, 1861. 


supplies, a policy which he later advocated so warmly in 
a larger field. On November 2,y, 1861, he wrote in his 
confident and convincing way to a firm in Philadelphia 
as follows : 

Messrs. T. C. Henry & Co.: 

Gentlemen: — I want your names on the government 7 3-10 
per cent, loan subscription. A large number of the contractors 
have done handsomely and will do still more. 

If you will subscribe $50,000, Drexel & Co. will pay in the 
cash and take the notes to their own account without any trou- 
ble or responsibility to your firm, and all it will cost for the 
pleasure of aiding the government to $50,000 cash, and the credit 
to your house of making so liberal a subscription is the one per 
cent, or $500. 

Without such efforts as these Philadelphia would go sadly 

Truly yours, 

Jay Cooke, 

Subscription Agent. 

A place was now found for Henry Cooke, the editor of 
the Ohio State Journal. Under his brother Jay's direc- 
tion he became the first travelling agent for the national 
loan. Holding confidential relations with the Treasury 
Department he was appointed to visit the western agents 
and arouse in them a spirit of patriotism. In a few days 
he was writing Jay from Harrisburg, Pa., reporting the 
results of his efforts among the bankers of that place, 
Lancaster and York. He went west by way of Hunt- 
ingdon to Pittsburg, Columbus, Toledo, Indianapolis 
and Chicago, visiting many bankers in these and other 
cities. From Pittsburg under date of September 18, 
1861, he wrote his brother to tell of the success attending 

the labors of a leading agent there : 


"I find Mr. Hanna ^ doing splendidly with his sub- 
scription. The first two days (yesterday and the day 
before) he realized $260,000! He hopes to get a mil- 
lion. This morning he has flung to the breeze a splen- 
did national flag, inscribed across the bottom of it — 
'National Loan.' He keeps the newspapers fired up 

Thus at the very beginning of his connection with the 
business of selling the government's notes and bonds 
Jay Cooke perceived the methods that must be pursued, 
if the loans were to be popularized and distributed, — the 
methods by which hundreds of millions of dollars were 
later obtained and forwarded from his office in Third 
Street to the Treasury of the United States. He de- 
veloped his plans at his own expense. Convinced that 
they would succeed he risked much and proceeded to 
demonstrate his points to the country. Mr. Chase had 
allowed each agent $150 with which to advertise the 
loan in his particular district, so meagre a provision that 
it was practically valueless. So long as he lived Mr. 
Cooke did not cease to marvel at the Secretary's man- 
agement in this respect and although the Department 
was rather narrowly limited by law in expenditures of 
this kind the criticism was not unfair. "When it is con- 
sidered that my appointment covered all the city of Phil- 
adelphia and its surrounding country in Pennsylvania, 
New Jersey and Delaware, where there were hundreds 
of newspapers in which the loan should be advertised," 
Mr. Cooke wrote in his Memoirs, "it is difficult to con- 

^ Joshua Hanna, a prominent Pittsburg banker, his firm was Hanna, 
Hart and Company. "A great friend and confidential agent of Governor 
Chase. Manages his private money matters sometimes.** — J. C. to H. D. 
C4 March 5. 1862. 


ceive of such a minute sum being designated wherewith 
to accomplish so gigantic a work. The sum should 
have been placed at $50,000 or $100,000." 

The financier chafed under such restrictions. He 
wrote to the Department asking for larger allowances 
but to no immediate avail, as the following letter from 
the Assistant Secretary indicates : 


Sept. 20, 1 86 1. 
My dear Sir: 

You say, " If I could have the privilege of paying some good 
common sense man to write short sentences daily for each of the 
papers to keep things alive, it would pay 100 per cent." 

Make your proposition definite. How much pay and what 
mean you by 100 per cent.? 

The Secretary will advance the public interests but you know 
as well as I that he must know just what he is sanctioning be- 
fore he acts. Address him as I shall not be here. 


Geo. Harrington. 

Mr. Cooke also suggested to Mr. Chase greater liber- 
ality in another matter. He wished the Secretary to 
offer a larger commission to the country banks that they 
might be induced to follow the salutary example of the 
city banks in making useful advances to the Treasury. 
This plea, as most others for more generosity to those 
who served the Department, was ineffectual. On Sep- 
tember 7, 1861, Mr. Chase wrote to Jay Cooke as follows: 

Dear Sir: 

Yours of the 5th is just received. I am much gratified by the 
success of your labors. 

I should hardly feel justified in offering to country banks a 
greater compensation for advances than I offer for obtaining 
subscriptions. In fact so far as the labor is concerned the ad- 


vance will cause less trouble to the banks than the subscriptions ; 
and one-fifth of one per cent, added to the rate of 7 3-10 which 
their advance would secure to them ought, I think, to satisfy 
reasonable people. I am perfectly willing to give the one-fifth 
of one per cent., for advances and consider it as a mode of ob- 
taining subscriptions. 

Yours truly, 

S. P. Chase. 

Notwithstanding these restrictions which he keenly 
felt Mr. Cooke sold $4,224,050 of the first series of notes 
dated August 19, 1861, and took $1,000,000 of the second 
$50,000,000 lot issued on October ist. For this work he 
received a commission of $6,680.06 and an allowance on 
account of advertising of $150, a total of $6,830.06.^ 

He expended his $150 allowance, all his commis- 
sions and a considerable sum besides in advertising the 
$50,000,000 loan of August, 1861, in and about Phila- 
delphia. He frequently stated in after life that his ex- 
penditures in bringing it to the notice of the people had 
been $10,000. 

He furnished to the Secretary of the Treasury vouch- 
ers of sums he had paid out to promote the loan amount- 
ing to $3,041.44 which did not take into the reckoning 
many unenumerated expenses. On December 18, 1861, 
the Philadelphia agent wrote to Mr. Chase: "I send 
by express the bills and vouchers ... in the above 
mentioned memorandum, also a book containing copies 
of the various advertisements, editorial notices, etc., 
and of the circulars distributed from my own office. 
I send these as a matter of form to let you see what 
my course has been and by what means I have swelled 
up my subscriptions. If I had spent twice as much 

1 MS. Records of the Treasury Dept 


more I could have obtained twice as many subscriptions, 
I think.'' 

Mr. Cooke had sold about one-fourth of all the notes 
that were sold by agents outside the sub-treasuries, some 
of those appointed not even having opened books for 
subscriptions, and none of them adopting his energetic 

This loyal, enthusiastic and successful service in the 
government's behalf raised him in the eyes of the Treas- 
ury Department to an eminence not enjoyed by any other 
American financier, and led in due time to his appoint- 
ment as the sole subscription agent for national loans. 
A small balance of the $50,000,000 which the Associated 
Banks had advanced to Mr. Chase, about $5,000,000, 
was paid to them in notes, since not quite all could be 
sold by the methods then employed, but the bankers 
were persuaded to embrace their privilege and make the 
Treasury a second loan for a like sum on similar terms.^ 
To this appeal there was dwindling public response and 
no disposition was manifested on Mr. Chase's part to 
deal more liberally by his agents. Their accounts were 
closed and the banks directly received practically all the 
securities on which this loan was based, to make use of 
them in their own time and in their own way. When 
December came and the option upon the third lot of 
notes of $50,000,000 was about to expire the bankers 
plainly told the Secretary that they had given to the 
government all the accommodation of this kind which 
their resources would allow and his only alternative was 

* Their profits in interest from the date of credit on their books to the 
date of payment of the money to the Treasury was 7 3-10 per cent, for 
thirty-two days or $320,000 on the first $50,000,000 and the same rate for 
fifty-three days or $530,000 on the second $50,000,000. 


to offer them the twenty year bonds. The act of July 
17, 1861, under which these various operations were 
conducted had stipulated that the Secretary of the 
Treasury might issue bonds at par "to bear interest not 
exceeding seven per centum per annum/' Thus it was 
conceived and decided that if he should issue them at 
less than seven per cent, he might receive lov/er bids. 
Indeed this privilege was specifically accorded him 
by a supplementary act.^ Fifty millions in six per 
cent, bonds were equal to $45,795,478.48 in seven 
per cent, bonds, and while most loath to be re- 
sponsible for such a loss to the government he was 
compelled to this course. As it was the banks were 
imable to fulfil their engagements to Mr. Chase on the 
subject of this loan. A number declined to pay in coin, 
which was still the medium of all public and private ex- 
changes, and the nation at the end of 1861 was face to 
face with a suspension of specie payments and an era 
replete with the evils and dangers of large paper money 

The war proceeded and promised to be fiercer and 
more prolonged than any but a few of the more pro- 
phetic had foreseen. Mr. Chase's estimates of income 
were proving by experience to have been too large : his 
estimates of the expenditures of the government too 
moderate, as the demands for armies, military imple- 
ments and war supplies of all kinds increased. In the 
first five months of the fiscal year or up to the 30th of 
November, 1861, he had borrowed nearly $200,000,000 
as follows : * 

1 Act of August 5, 1861, Sec. 7. 

* Report of the Secretary of the Treasury, December, 1861. 


There were paid to creditors or exchanged 

for coin at par at different times in July 

and August two years six per cent, notes 

to the amount of $14,019,034.66 

There was borrowed at par in the same month 

upon sixty days six per cent, notes 

the sum of 12,877,750.00 

There was borrowed at par on the 19th of 

August upon three years seven-thirty bonds 

issued for the most part to subscribers to 

the National Loan 50,000,000.00 

There was borrowed October ist on the 

like securities 50,000,000.00 

There was borrowed at par for seven per cent. 

on the 1 6th of November upon twenty years 

six per cent, bonds reduced to the equivalent 

of 7s, including interest 45,795478.48 

There were issued and were in circulation 

and on deposit with the Treasurer, No- 
vember 30th, of demand notes 25,242,588.14 

Making an aggregate realized from loans 

in various forms 197,242,588.14 

This sum large as it v^as all clear-sighted men knew 
to be entirely inadequate if the government were to go 
forward and effect the return to the Union of the se- 
ceded Southern states. The expenditures for the fiscal 
year ending June 30, 1862, which Secretary Chase had 
estimated at $320,ooo,(XX), when Congress met in July, 
he now thought would mount to $543,000,000, calling 
therefore for large additional loans. He also made an 
estimate of the public debt at the end of the fiscal year : 

On July I, i860, the debt was $64,769,703.08 

On July I, 1 86 1, the debt was 90,867,828.68 

On July I, 1862, it would probably be 517,372,802.93 

On July I, 1862, the debt actually was 514,211,371.62 



When the regular session of Congress, the first of 
Mr. Lincoln's administration, met in December, 1861, 
Mr. Chase had had several months of rather dire ex- 
perience as a war financier. It is not too much to say 
that he had exhausted the ordinary resources of his 
office. The credit of the government on the face of 
things was sensibly higher at the end of 1861 than it had 
been in the first months of the year. Bonds and Treas- 
ury notes bearing 7 and 7 3-10 per cent, interest were 
now sold in limited amounts at par while earlier in the 
year they could have been disposed of only at a dis- 
count. Nevertheless it was certain that little more was 
to be expected from the banks and while Jay Cooke's 
marked success in selling the seven-thirty notes to the 
people for specie or its equivalent was encouraging, and 
by more generous support on Mr. Chase's part might 
have been continued to the great advantage of the gov- 
ernment, the question is very problematical. In any 
case the country was on the verge of a suspension of 
specie payments. This was a common course of pro- 
cedure for the state banks in emergencies much less 
grave and with or without a paper money apparition they 
were in a technical position when this step might natu- 
rally be expected. As for outside aid it might be wholly 
disregarded. With the great financial influences of 



Europe openly hostile loans cx>uld have been sought in 
vain except at very large discounts on bonds taken by 
usurers and speculators. The London Economist said 
about this time: *'It is utterly out of the question in 
our judgment that the Americans can obtain either at 
home or in Europe anything like the extravagant sums 
they are asking — for Europe will not lend them ; Amer- 
ica cannot," 

The London Times remarked to the same text: "No 
pressure that ever threatened is equal to that which now 
hangs over the United States and it may safely be said 
that if in future generations they faithfully meet their 
liabilities they will fairly earn a fame which will shine 
throughout the world/' * 

This was the actual financial situation when Congress 
met in December and Mr. Chase knew very definitely 
and practically, what Lincoln, Seward and the other 
government leaders realized only somewhat less clearly, 
that if the nation were to survive in such a war as this 
one had become, new and much greater sources of in- 
come must be sought and found at once. Secretary 
Chase in his report to Congress at its meeting in De- 
cember recommended two radical new measures, the 
issue of a considerable amount of interest bearing paper 
currency and notes to be emitted through banking asso- 
ciations, the germ of the idea which later bore fruit in 
the national banking law. 

Mr. Chase at this time openly deprecated the issue of 
legal tenders saying that the "possible disasters so far 
outweigh the probable benefits of the plan that he feels 
himself constrained to forbear recommending its adop- 

* Cited by Schuckers, p. 226, 


tion." ^ It is true that in casting about for useful ex- 
pedients after the battle of Bull Run $50,000,000 of so- 
called "demand notes," authorized by the loan bill of 
July 17, 1861, had been issued by the Treasury Depart- 
ment. They were non-interest bearing and at first it 
was with the greatest difficulty that any one could be 
found to receive them. They could be given out in pay- 
ment of government debts only after Secretary Chase, 
his assistant, George Harrington and other officers in 
the Treasury Department had signed a paper, pledging 
themselves to receive the new notes on their salary ac- 
counts. Shopkeepers, hotel proprietors, railway station 
agents and banks hesitated, or openly refused to take 
them against Mr. Chase's vigorous protests.^ By the 
supplementary act of August 5, 1861, they were made a 
legal currency for the payment of import duties, a very 
valuable advantage. Moreover the issue was so limited 
that no danger to credit or values could be anticipated 
and their superior points later became quite clear, since 
they soon commanded a handsome premium over other 
sorts of government paper money. This measure as 
we have noted had Secretary Chase's cordial approval 
and it was only when the proposal was made to increase 
the emission of this kind of money and force the loan 
upon the country by a legal tender provision, it being 
assumed that no more notes of this character would be 
received by the people with their consent, that he ex- 
pressed his misgivings. There were then in Congress, 
as there have been in all Congresses both before and 
since, many members with none of the Secretary's con- 

* Report of the Secretary of the Treasury of December, 1861. 
' Sch tickers, pp. 224, 225. 


scientious qualms on the currency question. At the 
head of the group of men who were ready to cast to the 
winds the teachings of experience was Thaddeus Stev- 
ens, the powerful leader from Pennsylvania, then Chair- 
man of the Committee on Ways and Means. It was his 
delight to pour the vials of his vehement ridicule upon 
the natural safeguards of wise governmepts and honest 
nations on the subject of money. He was supported by 
such members as Elbridge G. Spaulding of New York, 
who has rather proudly taken to himself the credit for 
the policy which was soon to be inaugurated ^ and the 
course of military events was such that the country 
was swept quickly, perhaps imperatively into the legal 
tender issues. The greenback was then and for years 
afterward one of the most hotly and ill-naturedly de- 
bated subjects in the financial policy of the United States, 
and it will always remain a nice problem to argue 
whether by pursuing any other course the Northern 
leaders could have prosecuted the war. It is to be re- 
membered that it was one of the great wars of the 
world. Usual methods could not avail and those who 
best knew of the practical difficulties which beset the 
government day by day were willing to take not too 
much account of science and system, or humor their 
predilections in favor of an ideal if by some expedient 
they could eflfect a grand result. It is plain that the 
Treasury, and through it Lincoln and the War Depart- 
ment, could have gone on no longer without an important 
financial device which would prove immediately avail- 

1 E. G. Spaulding, History of the Legal Tender Paper Money Issued 
During the Great Rebellion being a Loan zvithout Interest and a National 


Convincing himself that his national banking law 
could not soon be passed Mr. Chase was rapidly con- 
verted to the views of the legal tender men. Nothing 
more could be done under the law of July 17 or by any 
similar measure in the existing state of affairs,^ and the 
new proposal took the form of a bill authorizing an 
emission of $50,000,000 (raised to $150,000,000) of 
greenbacks made a legal tender by government fiat for 
all purposes except the payment of import duties and in- 
terest on the debt, with an issue of six per cent, bonds re- 
deemable in not less than five nor more than twenty 
years, the currency being convertible at the will of the 
holder into the interest bearing securities. There was 
a prejudice both North and South against legal tender 
paper* and a deep-seated doubt as to the constitutionality 
of legislation authorizing it. The plea was the neces- 
sity of the hour; it was defended even by those who 
seem to have known the least of the evils of debased 
standards, such as Stevens and Spaulding, as a war 
measure. Mr. Spaulding wrote on January 8, 1862, that 
it was "a measure of necessity and not one of choice. 
We will be out of means to pay the daily expenses in 
about thirty days and the committee do not see any other 
way to get along till we can get the tax bills ready." * 
Mr. Chase still regretted the proposed step but on Jan- 
uary 22, 1862,* promised his co-operation. A week later 
(January 29) he wrote that *'the condition of the Treas- 
ury certainly needs immediate action" ; it was "impossi- 
ble," said he, "in consequence of the large expenditures 

1 Spaulding, p. 32. 

2 J. C. Schwab, The Confederate States of America, p. 88. 
> Spaulding, p. 17. 

♦ Ibid., p. 27. 


entailed by the war and the suspension of the banks to 
procure sufficient coin for disbursements." It had be- 
come, he continued, ** indispensably necessary that we 
should resort to the issue of United States notes." ^ On 
February 3d the Secretary wrote to Mr. Spaulding and 
concluded his letter with these earnest words : 

"Immediate action is of great importance. The 
Treasury is nearly empty. I have been obliged to draw 
for the last installment of the November loan, so soon as 
it is paid. I fear the banks generally will refuse to 
receive the United States notes. You will see the neces- 
sity of urging the bill through without more delay." ^ 

The real and grave danger of the situation could not 
be exaggerated and this was the argument used in be- 
half of the bill, helped forward by fervent appeals to 
patriotism such as these of Mr. Kellogg, of Illinois, who 

"Mr. diairman, I am pained when I sit in my place 
in the House and hear members talk about the sacred- 
ness of capital ; that the interests of money must not be 
touched. Yes sir, they will vote six hundred thousand 
of the flower of the American youth for the army to be 
sacrificed without a blush ; but the great interests of cap- 
ital, of currency, must not be touched. We have sum- 
moned the youth; they have come. I would summon 
the capital; and if it does not come voluntarily before 
this republic shall go down or one star be lost, I would 
take every cent from the treasury of the states, from the 
treasury of capitalists, from the treasury of individuals 
and press it into the use of the government." * 

Thus the first legal tender bill passed the House of 

» Spaulding, p. 45. 2 Ji,id,, p. 6a « Ibid., p. 76. 


Representatives on February 6, 1862, to meet in the 
Senate the same antagonism from sober heads, finally 
overcoming all its enemies through the arguments which 
prevailed in the other branch of Congress, although the 
senators insisted upon a clause requiring the interest on 
the bonds to be paid in gold, and provided means for the 
accomplishment of this necessary object which in con- 
ference took the form of a stipulation that only gold 
(and the demand notes of July 17, 1861) should be re- 
ceivable at the custom houses. The imports it was 
thought would always be large enough to insure a suf- 
ficient gold income, if it were set aside and applied to 
this use as the law required it to be, to pay the interest 
on the national debt. On February 25, 1862, the legal 
tender act became a law. 

Meantime on February 12, 1862, the needs of the 
Treasury were so urgent that Congress at Secretary 
Chase's solicitation had authorized a supplementary 
issue of demand notes of $10,000,000, bringing that 
emission to $60,000,000, and on March 17th Congress 
gave a legal tender quality to this money which being 
receivable like gold in payment of import dues it seems 
not to have needed. Throughout the war these notes 
followed gold in its spectacular fluctuations in New York 
City because of their value at the custom houses. 

One step on the way to evil easily leads to others. 
Though Mr. Chase was a reluctant convert to the legal 
tender and the leaders in Congress when the first law 
was passed in February made fair promises for the 
future it was less than five months, on July 11, 1862, 
until a further emission of ''United States notes'' (green- 
backs) of $150,000,000 was authorized, thus doubling 


their amount. This currency was issued promptly and 
almost to the full limit of the grant to replace the de- 
mand notes which were being burned as they came in, 
and in payment of the government's pressing obliga- 
tions, going then to fill the general founts of money in 
all parts of the country. 

In this way the government was saved the humiliat- 
ing and costly operation of "shinning'' through the 
"shaving shops of New York, Boston and Philadelphia," 
as Mr. Spaulding described the operation of negotiating 
the national loans whereby government stocks would be 
"knocked down to seventy-five or sixty cents on the dol- 
lar." ^ Its authors argued not only that the policy was a 
temporary one, forced upon the country by hard neces- 
sity but promised that they would recommend no far- 
ther going on the evil road. Those who opposed it, 
such as Mr. Morrill of Vermont, had no more effective 
argument than their expressed conviction that the war 
could be ended "by the 30th of July next as well as in 
thirty years." "The ice that chokes the Mississippi," 
said he, "is not more sure to melt and disappear with the 
approaching vernal season than are the rebellious armies 
upon its banks when our western army shall break from 
its moorings and rush with the current to the gulf and 
baptize as it goes, in blood, the people to a fresher 

Mr. Morrill and those who thought as he were false 
prophets and the legal tender men were at the moment 
triumphant. Mr. Spaulding's fear that government 
stocks would be "knocked down" to seventy-five or sixty 
cents on the dollar was not realized; they escaped this 

^ Spaulding, p. 21. 


fate. Standards were changed and money was made 
plentiful ; prices rose and values were readjusted. Bonds 
were sold at par, not the par of i860 and 1861 but at the 
new par in legal tenders, and who will say that the de- 
ception did not greatly facilitate the operations of the 
Treasury Department? Was not the thought that 
United States stocks were being taken at their face value, 
even when they were selling actually at but forty or 
fifty cents for the dollar's worth of gold, productive of a 
feeling of confidence which was of value in bringing the 
war to its end ? President Lincoln retained McClellan at 
the head of the Army of the Potomac when his useful- 
ness had ended, ordered and delayed military movements 
in answer to public opinion, sent soldiers home to vote, 
reprimanded eager Abolitionist generals like Fremont 
for freeing slaves and postponed emancipation because 
of the knowledge that he was the chosen head of a 
democracy. The war could not be successfully waged 
without the support of the people of the North who were 
frequently expressing their sentiments at the polls. The 
legal tender currency when the last word is said, what- 
ever else it was, will be understood to have been a device 
of this class. Come what might the government's credit 
was kept at a fairly steady level in terms of greenbacks. 
The people believed that the finances of the nation were 
in a sound condition so long as bonds were not sold at 
a discount and loans were not negotiated at an exorbi- 
tant rate of interest. It is true that a railing fire was 
for a long time directed at Secretary Chase and the legal 
tender policy.* The declaration is made that the ex- 

^ See Simon Newcomb, A Critical Exomination of our Financial Policy 
during the Southern Rebellion; W. G. Sumner, History of American 
Currency; Horace White, Money and Banking, 


penses of the war should have been met by taxing the 
people at some burdensome rate — which would have con- 
verted them into Copperheads; that the government 
should have continued specie payments — when specie 
was unobtainable ; that loans should have been contracted 
at the discounts demanded by lenders — however usur- 
ious. All this and much more doctrinaires said, or 
would have us infer, should have been suffered by the 
nation rather than do violation to its monetary stand- 
ards. The resumption of specie payments, though at 
a late day, and the liquidation of the Civil War debt in 
gold made the policy seem but the temporary aberration 
which it was meant to be. It may have been uncon- 
stitutional. At least this was the view taken by Mr. 
Chase himself, as Chief Justice, in his famous decision 
in the legal tender cases.* "It is not surprising," said 
he in that opinion, "that amid the tumult of the late 
Civil War and under the influence of apprehensions 
for the safety of the republic, almost universal, different 
views never before entertained by American statesmen 
or jurists were adopted by many. The time was not 
favorable to considerate reflection upon the constitutional 
limits of legislative or executive authority. If power 
was assumed from patriotic motives the assumption 
found ready justification in patriotic hearts." Nicolay 
and Hay would seem to express the rational historical 
judgment on this subject when they say: "It will prob- 
ably be the verdict of posterity as it was the opinion of 
the ablest statesmen of the time that the legal tender act 
was a necessary exercise of the powers of government 
in a time of supreme emergency, that the result of that 

1 8 Wall, 625. 



act was all that its advocates hoped for in sustaining gov- 
ernment in a period of vast and compulsory expenditure, 
and that the evils which grew out of it, great as they 
unquestionably were, were not so disastrous as intelli- 
gent economists at the time apprehended." * 

Other measures characterized the government's fi- 
nancial policy in 1862 and forwarded the operations of 
war, the chief among them being the temporary loan 
system and the issue of the so-called "certificates of in- 
debtedness." It was at the suggestion of John J. Cisco, 
Assistant Treasurer of the United States at New York,^ 
that Secretary Chase early in 1862 adopted the policy of 
receiving on deposit, subject to withdrawal after thirty 
days on ten days' notice, the temporarily idle funds of 
banks, corporations and individual capitalists. The 
maximum rate of interest which he was authorized to 
pay such depositors was five per cent, and in the later 
years of the war six per cent. By the legal tender act 
of February 25, 1862, the amount of such deposits which 
the Secretary could receive was fixed at $25,000,000, 
being increased to $50,000,000 on March 17, 1862, and 
to $100,000,000 on July II, 1862, when the second legal 
tender bill was passed. Later the limit was raised to 
$150,000,000 and at one time the government obtained 
the use of as much as $120,000,000 through this de- 

One week after the first legal tender bill was passed, 
on March i, 1862, authority was conferred upon the 
Secretary of the Treasury * to issue ''certificates of in- 

1 Vol. VI, p. 237. 

* Schuckers, p. 268. 
*Ibid., p. 270. 

* Amended by act of March I7, 1862. 


debtedness/' another kind of fiat currency very disturb- 
ing to standards of value. The aggregate amount of 
these certificates to be outstanding at any time was un- 
limited and it was no more or less than the conversion 
of government debt into interest bearing securities which 
passed current among the people, a familiar device in 
war finance. 

In the meantime, while the waters were in flood in 
financial channels Jay Cooke was frequently in confer- 
ence with Secretary Chase. They were in complete un- 
derstanding and Mr. Cooke busied himself early in 1862 
in strengthening his position for the demands which he 
foresaw would be made upon his house. By this time 
he had positively declined the appointment as Assistant 
Treasurer. Mr. Chase had been subjected to some crit- 
icism for his course in reference to this appointment and 
the friends of the occupant of the office, James H. Wal- 
ton, warmly defended him against charges which in the 
newspapers at least were made the grounds of his re- 
moval. On October 2^, 1861, Mr. Chase wrote to Jay 
Cooke still expressing a hope that he would reconsider 
his determination not to serve the government as its 
Assistant Treasurer in Philadelphia : 

My dear Mr. Cooke: 

Your note is just received and I return the pap^s with a 
slight alteration. 

I have no personal anxiety for defence; but do wish to feet 
myself that I have done what I ought in my place in deference to 
the Republican organization as well as to the whole People. 

Had I not nominated a successor to Mr. Walton, and had not 
the President made an appointment accordingly, I should not 
on the whole think it best to create a vacancy, unless sure to 
fill it by a gentleman much more useful to the government. As 


things are, however, I cannot recommend the retention of Mr. 
Walton and the President desires, if you do not accept the ap- 
pointment' yourself, to appoint Mr. Allison of Beaver, formerly 
M. C. from that district. Mr. A — is a competent man, a gen- 
tleman and irreproachable as I believe. I do not know that he 
has any great financial ability and in this respect his appoint- 
ment will not fulfil my wishes. In every other respect I shall 
be satisfied with him. 

If, therefore, you cannot make up your mind to accept, the 
matter may be considered as settled unless some objection to 
Mr. A's appointment presents itself to your mind which has not 
occurred to mine. 

Tell Kate if you get this in time, to give a look at Philadelphia 
carpet stores and furniture establishments before she goes to 
New York. 

You must write plainer. The chief clerk at the P. O. De- 
partment mistook your J. B. Moorhead for Mr. Bellowhead. 

Can you find nic a coupe, light, strong, shutting up close, for 
one horse, neat yet fit for office work at say $250 to $300. 

Yours truly, 

S. P. Chase. 

Mr. Chase wrote again on this topic in a letter with- 
out date : * 

Mv dear Mr. Cooke: 

Enclosed is an article from the " News." Please see Mr. 
Mercer, Mr. Patterson and Mr. Thomas, the Collector, and pick 
out some good Republican for Assistant Treasurer, but let him 
be a first class man. 

I wish you would take the place. Can't you have some proper 
answer made to the article, that a Republican was appointed early 
— that he did not accept — that Mr. Walton is loyal — that un- 
der changed circumstances there was no need for haste in mak- 
ing a change, etc. 

} The following letter relating to this apiyointnient was addressed to Mr. 


The suggestion of Mr. Chase that he would like Jay 
Cooke to purchase and forward him a coupe was pro- 
ductive of new personal relationships which sufficiently 
well illustrate the variant dispositions of the two men. 
While the Secretary of the Treasury seems up to this 
time to have been very responsive to Mr. Cooke's 
friendly offices to him and his daughters — which were 
not reserved for Secretaries of the Treasury, as those 
who knew him fully understood, for they were tendered 
to all his fellow beings so long as he lived — Chase now 
developed a sensitiveness to attention lest it be oflFered 
with a view to unfair rewards. He had eagerly sought 
Mr. Cooke's counsel and aid in the formulation of his 
financial policies, but some newspaper criticisms were 
lashing him into anxiety lest his friendship for a banker 
would become a subject for public criticism. He was 
very unhappily impressed by Mr. Lincoln's rude west- 
ern anecdotes. Like Jay Cooke he was without a single 

Chase and was forwarded to Jay Cooke: 

Philadelphia, i8-8, i86i. 
Dear Sir: 

In common with all men who are intimately acquainted with Jas. H. 
Walton, I have been astonished at the recent accusation made against him 
of sympathy or complicity with traitors. 

My acquaintance with Mr. Walton was made in the Senate of Penn- 
sylvania, where we served together three years. Our relations there, in 
spite of a diversity of political opinions, were intimate and confidential 
and have remained so ever since. Those relations could not exist if he 
held a single sentiment in common with the black-hearted villains who are 
now striving to overthrow the government. I assert positively that Penn- 
sylvania contains no more loyal citizen. He has never uttered a word 
nor ever entertained a thought that was not true to his country. No man 
of his party has been more open in his denunciation of the vile dough- 
faces in Northern States who are still able to find excuses and palliations 
for theft, piracy and treason. I write this without solicitation to render 
justice to one who needs no other vindication than his own past history. 

Yours respectfully, David Taggart. 


vulgar impulse. He had seen enough to be convinced 
that he was a greater man than the President in more 
than one regard and he was putting himself in the way 
of gratifying, in 1864, that ambition which had been 
ungratified in the national conventions of 1856 and i860. 
His stoical nature was asserting itself in his relations 
with Mr. Cooke with a result which, but for the remark- 
able humility of heart of the financier, and his willing- 
ness to admire the Secretary, in spite of his moods, might 
have deprived the country of the services of a man who 
was soon to prove himself one of its greatest benefactors. 
On October 25, 1861, Mr. Chase writes: 

My dear friend: 

The tenor of your note leads me to fear you are under some 
misapprehension alx)ut the coupe. What I want is a plain and 
light but substantial concern — not heavy, for one good horse 
— so constructed that two persons can ride in it protected from 
the weather with a neat seat for the driver — in one word, 
comfortable but not showy or costly. 

Mr. Mclntire * will be appointed, I think. 

Mr. Cooke in his generous way bought the carriage 

and forwarded it paying for it out of his own purse, and 

Chase wrote : 

Washington, November 21, 1861. 
My dear Cooke: 

I have not seen the coupe you were kind enough to send me 
and have not yet determined whether I shall put it to public or 

^ Mr. Walton's office, after Mr. Cooke declined it, was offered to 
Joseph Patterson, President of the Western National Bank of Philadel- 
phia, who also would not take it. At length it was tendered to and ac- 
cepted by Archibald Mclntyre, a retired business man of the city whose 
name had been suggested by Mr. Cooke and with whom, through the sub- 
treasury the financier as the national loan agent was later to have dealings 
of much magnitude. 


private use. In the latter case as I find my expenses overrun 
my income I shall be strongly tempted to accept it as you offer 
it, but I must not. A public officer while in office must accept 
no presents beyond those which the ordinary intercourse of 
society prompts and allows from friend to friend. 

My cares press me apparently with increasing weight. But 
the mail must close and so must 

Your friend, 

S. P. Chase. 

Mr. Cooke had gone all over the city with Mr. Moor- 
head who was considered the better judge of equipages 
de luxe to choose a suitable vehicle for the Secretary, 
and Kate Chase, who was then in Philadelphia, accom- 
panied them on some of their visits to the carriage shops. 

Another letter must be inserted to make complete 
the record of this little personal exchange: 

Washington, December i6, 1861. 
My dear Mr. Cooke: 

Your very kind note — just like yourself — came only this 
morning. You must remember that I rarely get letters written 
on Saturday till Monday but it was not the less welcome be- 
cause of the little delay. I only wish you had come instead of 
the letter. 

I am glad you are going to establish a bank here and shall be 
still more gratified if it is founded on my plan. It would de- 
light me to have it the first of the kind. 

As to the Associated Banks no one could be more cordial than 
I have always been in the acknowledgment of their services. 
They have done well and I have endeavored to make their con- 
nection with the Department profitable as well as pleasant. If 
I have failed to meet their views in all respects they ought to 
use consideration and reflect whether in my place and with my 
obligations they would have acted otherwise than I. 

Nettie comes home Christmas. I have written her to come 
with Mr. H. D. C — 's on Friday when her school terminates. 


Can you not come through with her on Friday night and spend 
Saturday and Sunday with me? 

I find the coupe you sent me too light for my purpose. Will 
you be displeased with me if I send it back, thanking you most 
sincerely for your kindness in sending it and for your kind 
intentions. I had come to the conclusion to allow Katie to 
accept it as the gift of yourself and Mr. Moorhead but as it will 
hardly bear the service to which it must be subjected it is best 
to return it unless the carriage maker is unwilling to receive it. 

Give my best regards to Mrs. Cooke, and believe me, 

Most sincerely your friend, 

S. P. Chase. 

P. S. The coupe has not been used except to be taken out once 
from my house to the Dept. with Mr. Harrington and myself in 

When you come, come straight to my house. 

Thus was the coupe rejected but it was not long 
before Mr. Cooke found new opportunities to gratify 
his generous instincts. Miss Kate Chase ordered book- 
shelves while she was visiting at his home in Philadel- 
phia and the fact coming to his knowledge he did not 
permit the young lady to see the bill. In expressing 
her gratitude to him she wrote that she would be "very 
careful'' in future '*how I leave orders at your house." 

Mr. Cooke was still revolving in his mind the ques- 
tion of establishing a banking house in Washington. 
His negotiations with the Clarks and A. J. Drexel hav- 
ing come to naught, in the first case because Edward 
Clark was unwilling to spare his brother Clarence to go 
to Washington, and in the case of Mr. Drexel because 
of his indisposition to make the risk unless he was in 
receipt of positive promises of business from the Treas- 
ury Department, Mr. Cooke laid his plans to take the 
step upon his own account. He had this course in mind 


when on his visit to Washington in August, 1861, for 
Mr. Moorhead wrote to him at that time: 

If you conclude to establish a branch in Washington I will 
agree to spend the winter there, I will get out of the railroad 
and be free to aid in anything you undertake. My own con- 
victions are that we could do a verv fine business there — in con- 
nection with the house here. Henry D. might be established and 
thus accomplish a good end. With your financial abilities, and 
the capital and credit our house commands, a good harvest should 
be gained under existing circumstances. 

In telling his brother Henry of Drexel's decision not 
to take part in the venture Jay Cooke mentioned the 
name of one whom he thought might be drawn into 
the arrangement. This was Harris C. Fahnestock of 
the Harrisburg Bank, a nephew of J. W. Weir, its cash- 
ier. Fahnestock had been actively employed in the sale 
of the $3,0(X),ooo Pennsylvania state loan and had won 
Mr. Cooke's good opinion in that and earlier transac- 
tions. He therefore addressed Mr. Fahnestock on the 
subject and that young man being willing to join Henry 
Cooke at Washington, he definitely determined before 
the end of 1861 to open a house in that city, although he 
was not without doubts of the success of the adventure. 

On December 22^ 1861, his father wrote him from 
Sandusky : 

I regret to hear you express any misgivings on the subject of 
the Washington bank matter. . . . True the times are fear- 
ful. But it is in just such times when an enterprise like this, 
with a skillful pilot, will be sure to be rewarded in the exact ra- 
tio of its peril. . . . The fact that the movement meets the 
approval of the Secretary of the Treasury is worth more, as you 
will find than you s^em now to estimate. I know from Sakey 
[Mrs. Wm. G. Moorhead] the exalted opinion which Gov- 
ernor Chase has of you and your financial skill. 


The partners in the new house were to be Jay Cooke 
and William G. Moorhead, the Philadelphia partners, 
Henry D. Cooke, Harris C. Fahnestock and J. W. Weir. 
Henry D. Cooke and Fahnestock were to reside in 
Washington and have the practical direction of the 
office, Fahnestock having a one-sixth interest without 
contributing capital. Mr. Weir was tendered a one- 
twentieth interest in the net profits "in consideration of 
his influence," as Jay Cooke wrote, "and the fact that he 
can do the new concern in many ways the same good 
that a special partner could." 

Mr. Cooke suggested that as Fahnestock was "af- 
flicted" with a long name the title might well be Cooke 
Brothers and Co. Mr. Fahnestock assisted by Mr. 
Weir sought to secure somewhat better terms but the 
financier explained that "the one-sixth profits to a party 
without capital who has a guarantee of his full ex- 
penses" was quite liberal. As a young man he had 
joined the Clarks for one-eighth and with no guarantee. 
Mr. Weir computed that Cooke, Fahnestock and Co. 
was a title containing but two letters more than Cooke 
Brothers and Co. but the house was destined to bear the 
name of the Philadelphia firm, Jay Cooke and Co., the 
"afflicted" Fahnestock being soon reduced to "Fahny." 

Perhaps Mr. Chase was not entirely in earnest, as he 
was at a later day, when he made the suggestion, but 
there was at least a chance of his joining Mr. Cooke as 
a partner in the banking business either at Philadel- 
phia or Washington. In the midst of much trouble he 
concluded a letter to Mr. Cooke on December 23, 1861 : 

What is indispensable is such retrenchment as will bring the 
payments within mesons immediately at command. I fear it is 


too late to accomplish this within any very short period. But 
steps must be taken toward it such as will restore confidence, or 
I must cast oflF the responsibility and go into your firm. 

With most cordial regards, 

Yours faithfully, 

S. P. Chase. 

For the Washington house satisfactory quarters were 
secured at 452 15th Street opposite the Treasury Build- 
ing. It was February, 1862, before the counters, desks, 
books and safes were in their places and the doors could 
be opened for business and Jay Cooke was soon responsi- 
ble for the acts of two very active and inexperienced 
young bankers. They wrote and telegraphed to Phila- 
delphia with more ardor than settled judgment. The 
firm's head was apprised of their smallest movements ; he 
was compelled to counsel them in regard to matters with 
which he should not have been annoyed, although they 
gained in assurance at a rapid rate. Henry D. Cooke 
came and went at Mr. Chase's house and office almost as 
an assistant or a private secretary and in this way 
learned much that was of the greatest value to a banking 
house. He remained on terms of warm intimacy with 
John Sherman and through him closely followed the do- 
ings of Congress. The Washington house transmitted 
to Philadelphia the earliest advices concerning military 
movements, of so much influence in deciding the course 
of prices in stock exchanges, and it could also urge the 
Treasury Department to make prompt deliveries of 
notes and bonds which had been disposed of by the Phil- 
adelphia house, transmit them as Philadelphia directed 
to those to whom they had been sold and attend to the 
payment of the moneys which were soon collected in 
large amounts from the subscribers to government loans. 


Mr. Chase himself was early enrolled as a depositor of 
Jay Cooke and Company's Washington branch; many 
officers of the government of different ranks opened ac- 
counts with the house and connections were established 
far and near which put its prosperity beyond the range 
of doubt. 

Henry D. Cooke actively identified the firm with the 
interests of the people of Washington by piloting 
through Congress a bill to authorize the construction of 
the first street railroads in the national capital. Jay 
Cooke then organized the Washington and Georgetown 
Street Railroad Company. Stock was taken by both the 
Cooke houses, by Drexel and Company and the Clarks in 
Philadelphia and by a number of Washington capital- 
ists. Secretary Chase accepted the invitation to become 
a stockholder and again had a vision of resigning from 
the Treasury Department ^ to take the presidency of the 
organization but Henry D. Cooke was elected to this 
office. On July ii, 1862, President Cooke with a party 
of newspaper men made the first trip over the tracks. 
The cars were run from the Capitol to Willard's Hotel, 
and a few hours later both houses of Congress were 
asked to take the ride, many members availing them- 
selves of the opportunity. The line was laid up to the 

1 Chase wrote to Jay Cooke on May 31, 1862 : " It gives me real pleas- 
ure to see the prompt manner in which you secured the control of the 
Washington City Railway to good hands. This town will have reason 
to thank you and I hope you will realize all the benefits you expect from 
it. I told Henry D. that I was strongly inclined to resign as Secretary and 
take the office of President of the company but believe I will hold out 
where I am, till I see my whole scheme of finance realized, if it is to be 
realized at all. Meantime I am much obliged to you for allowing me to 
come in as a stockholder. I wisli 1 could get all my little property into 
productive form and my debts paid. I should then feel quite independent." 


White House but the curves at the street corners were 
not yet finished and a fortnight or more elapsed before 
Henry Cooke could write to his brother in Philadelphia : 
"Our railroad now runs regularly from the State De- 
partment to the Capitol. Yesterday's receipts were 
$350 including the omnibuses, the railroad adding over 
$100 to the receipts. We carried about 2,500 pas- 
sengers on nine cars, making about twelve round trips 
each. We will do better to-day and when the line opens 
to Georgetown our receipts on that single route will 
reach not less than $500. You will also bear in mind 
that this is the dullest season in Washington.'' 

On the portions of the road open for traffic at the end 
of August, 1862, Henry Cooke computed the net earn- 
ings on the investment at 36 per cent, and when the 7th 
and 14th Street lines were completed the camps and hos- 
pitals in the outskirts of the city made a great deal of 
business for the company. 

Governor Chase, with the zeal of the true Abolition- 
ist, urged Henry Cooke to remove the restrictions in 
reference to negroes who were not allowed to ride in the 
cars. On September i, 1863, the Secretary wrote this 
ringing letter to Jay Cooke : 

Let my first letter of this month be a remonstrance against 
meanness and oppression. Why cannot colored people ride in 
the Washington and Georgetown Street Railroad cars? Who 
volunteers nowadays except colored men? And do they not 
volunteer under circumstances in which no white man would 
volunteer? The compensation of the colored man is ten dollars 
a month, the white man's thirteen; the white regiments are 
officered by whites; no commission in a colored regiment is 
given to a colored man ; the white private may hope promotion — 
the colored soldier can hope none as laws and regulations now 


stand. Yet the colored men are coming to the standards with 
a degree of alacrity and earnestness which do them honor. 
Banks writes he could not have taken Port Hudson without his 
colored recruits, Grant writes that the colored regiments are 
indispensable. I repeat why cannot people of this race ride in 
the W. & G. Street R. R. cars? Their exclusion is a shame and 
disgrace. I see in the Star a statement that the company is 
getting cars for their use. What kind of cars ? If poorer than 
the others I desire as one of the stockholders of the com- 
pany to protest against it. If the colored people are to be con- 
fined to special cars let them be better than the others so as 
to compensate in some measure for exclusion from the others 
by superior accommodation. But have no such cars. Let all cars 
be free to all. Let all decent people ride in any car convenient 
when they get it. What is to be feared if this simple and just 
rule be adopted I know not, but of this I am sure that nothing 
is so much to be justly feared as the doing of injustice and the 
acting of meanness. You can stop it on these cars. Stop it 
then I pray you. 

The board of directors refused to raise the prohibition 
in answer to Secretary Chase's warmly philanthropic 
plea. The Washington office very soon sold its stock, 
although it was a quite profitable investment, and Henry 
Cooke resigned the presidency because of the lobbying in 
behalf of the line which was required in Congress and 
the knowledge that he must face the issue of running 
the cars on Sunday, a course for which he wished not 
to be responsible, being like his brother Jay strict and 
dutiful in his religious observances. 

While issuing legal tenders, certificates of indebted- 
ness, and receiving temporary deposits, Secretary 
Chase sought further support from the loan act of July 
17, 1861. He again established official relations with 
Mr. Cooke, whose appointment to this new agency was 


made on March 7, 1862. The commission was as fol- 

[Treasury Department, 

March 7th. 1862. 

You are hereby appointed Subscription Agent for the National Loan 
authorized by the Act of Congress of 17th July 1861. 

You will accept subscriptions under such instructions as may from time 
to time be given you. A Blank Bond for such agency is herewith enclosed 
in the penal sum of one million dollars. 

Very respectfully, 

Your obedient servant 
S. P. Chase, 

Secretary of the Treasury.] 
Jay Cooke, Esq., 
Philadelphia, Pa. 

Some of Mr. Cooke's friends were now making it as 
difficult as possible for him to continue his career as a 


government financier. One million dollars was a large 
sum for a bond, since the balance in Mr. Cooke's hands 
at any one time on this operation could not well reach 
that amount. At least one whom he had come to ac- 
count a friend, refused his request when he asked for 
a renewal of an earlier favor. The letter was as fol- 

Philadelphia, March 14, 1862. 
Dear Jay: 

W. G. spoke to me yesterday in regard to your new responsi- 
bilities to the government. I went on your first bond cheerfully 
from the fact that at that time the business was to be conducted 
in your own office and under your own immediate supervision 
which fact had my entire confidence. I look upon the proposed 
arrangement as being under different circumstances. Besides I 
have lately resolved and determined to relieve myself from the 
heavy liabilities under which I have been resting. I have been 
warned to this from the late sad evidences we have had of the 
uncertainty of life. I hope you will not suppose I have any less 
confidence in you personally than heretofore. I am not ambi- 
tious to make money or take risks. You do not take risks with- 
out a pretty good prospect of making money. I must therefore 
ask you to excuse me for declining in this instance for the rea- 
sons above set forth. 

President Mercer wrote asking Mr. Cooke to "re- 
duce" his outstanding account with the Farmers' and 
Mechanics' Bank. "We cannot carry so large an 
amount with our present understanding without loss and 
inconvenience," said he. "It must come down and 
without smashing any crockery. I ask you to bring it 
down so as not to exceed one-half of the present bal- 

Of this fibre were the financiers in Mr. Cooke's own 
city, and it is not surprising perhaps that the New 

On South Third Strict. ^ Ihr G^'urd Ba«k, Pkiladtlphia 


York bankers, of whom his partners sometimes thought 
so badly, did not warmly co-operate in forwarding his 
measures for befriending the government in the time of 
its great need. Again, as before and later, frequently, 
Mr. Cooke permitted no obstacle to interfere with the 
attainment of his ends. Nor did he harbor ill feeling 
against those who sought to impede his progress. He 
swept the firmament with a large glass and the doubts, 
fears, suspicions and incivilities of those about him were 
not allowed to disturb his personal composure. 

No large operations were possible at this period under 
the law of July 17, 1861, although Mr. Chase had the 
time limit of the grant extended, but Jay Cooke bought 
coin for the government to enable it to pay the interest 
upon the public debt,^ negotiated certificates of indebted- 
ness for the Treasury Department to protect the national 
credit, conferred with the Secretary both in Washington 
and Philadelphia, regarding his future policies, and car- 
ried on a large private business into which he had been 
helped by his official connections, so widely advertised. 
While Henry Cooke and Fahnestock wrote frequently 
from Washington that the government was '*hard up," 

1 In a letter to Henry Cooke on March 4, 1862, Jay Cooke wrote as 
follows : 

"I have your private note of yesterday in relation to purchase of gold 
and sale of 7 3/10. You must express to Gov. C. my appreciation of his 
kindness and confidence. We must all study by our watchfut care the 
interests confided to us to justify this confidence and to show him that the 
Treasury is a gainer by our confidential connection with it. I know we 
can transact all these various confidential matters on the very best terms 
and that we can give entire satisfaction. I want the Governor to trust 
to our good management, integrity and skill and I pledge myself that he 
will have no cause to regret his confidence . . . You can tell him I 
will give it my personal attention and not even the clerks or any one 
shall know for whom we are operating." 


"strapped" and ''broke" ; that the Treasury was "awfully 
empty" ; that its officers "grab for every dollar they can 
get to keep the wheels moving," relief during the spring 
and summer of 1862 was found chiefly in new issues of 
legal tenders and the certificates of indebtedness. In 
dire emergencies such amounts of unissued seven-thirties 
as could be easily marketed were sent for sale to Mr. 
Cisco, in New York, or to Jay Cooke, in Philadelphia. 
On March 22 y 1862, Mr. Cooke received the following 
letter from Secretary Chase: 

You are authorized to dispose of $750,000 three years 
7-30 bonds at par. It is desirable in order to make immediate 
provision for payment of some troops going in the field to obtain 
the money as soon as possible. You will of course observe former 
instructions as to such operations in the disposition of these 
bonds as net to affect unnecessarily the market. 

In authorizing Cooke to protect the certificates of 
indebtedness from depreciation, Mr. Chase wrote on 
April II, 1862:* 

It is important to the government as well as to the contractors 
and others who have received certificates of indebtedness in pay- 
ment of claims that persons obliged to sell shall find a market 
without being compelled to sacrifice, and it is believed that the 
judicious employment of (say) a million dollars in purchases 
will bring them up to par or nearly. If you concur in this 
opinion you are authorized to make purchases at any rate up to 
99% and all your purchases will be taken of you at the rate 
actually paid, and % of one per cent, additional as compensation. 
This authority is limited to one million of dollars and you will 
report from day to day the amount purchased and the numbers 
of certificates and the rates paid. You will be allowed interest 
on the certificates purchased from date of purchase to redemp- 

* MS. Treasury Records. 


tion by the department. This authority is given in strict confi- 

With great respect, 

S. P. Chase. 

During the next few days, Mr. Cooke bought about 
$700,000 of the certificates at from 97 to 98. His power 
was extended in the additional sum of $500,000 on May 
1st, and at several times throughout the year, upon the 
financier's advice, this policy was pursued with great ad- 
vantage to the public credit. In October, Mr. Cooke 
also recommended the purchase of '81 s, the bonds which 
were issued in 1861, when the Associated Banks would 
receive no more of the Treasury notes, and which had 
been sold from time to time, as the market would absorb 
them since that date, but Secretary Chase demurred. 
He said : 

"It might be very useful to purchase some of the 1881 
6s a6 you suggest but I should not feel warranted in 
making an order to that effect at present. The case is 
diflferent with the certificates. It is of great importance 
to the public creditors, and of course to the government 
to sustain them." ^ 

Mr. Cooke in this period intervened on his own ac- 
count in a number of ways to guard and strengthen the 
credit of the government. Without such watchful- 
ness on his part, the movement of the markets would 
have caused the Secretary of the Treasury much em- 
barrassment. Nevertheless this and similar patriotic 
services performed freely throughout the war without 
waiting tediously for official authorization, often 
grudgingly given, did not save him from a reprimand. 

1 To J. C, Oct. 24, 1862, Treasury Letterbooks. 


Because he had delayed for a few days the return of 
some part of the proceeds of a sale of bonds, using the 
money to support the credit of another issue in a falling 
market, Mr. Chase although not doubting that the oper- 
ation was "beneficial" to the government, wrote as fol- 

"It may appear to you that I am somewhat precise and 
technical but you will remember that I am not acting for 
myself, and must therefore see that all business is so 
transacted, that the record of it will be clear and subject 
to no misconstruction. I need not add that I have every 
confidence in your business sagacity, and your zeal for 
the public interests. All I ask is that you will remember 
that in transactions for the Department form, if not as 
important as substance, is too important to be disre- 
garded." ' 

Unquestionably 1862 was the most trying year of the 
war in a military sense, a time of terrible awakening 
after the confidence bordering upon bravado, that had 
preceded the first battle of Bull Run, and had been re- 
vived upon the appointment of McClellan to a place that 
for a season made him the idol of the nation. The 
reaction came, and Mr. Chase was the barometer for 
a large element of public opinion in the North. 

The Cooke letters for this time are important as well 
as interesting because they so accurately reflect the 
course of the Secretary's mind. 

On May 20, 1862, Henry Cooke wrote to his wife: 
"Gov. Chase sent for me this morning before I had fin- 
ished my breakfast to talk over the President's proc- 
lamation, [repealing General Hunter's order freeing the 

1 Chase to J. C, Apr. 26, 1862. 



slaves in the Department of the South]. He don't like 
it at all, but if he takes the advice I gave him, he will 
yield to Lincoln in this matter with a good grace/' 

Jay Cooke was likewise impatient for emancipation. 
On May 30th, he wrote to the Secretary of the Treas- 
ury : "My own feeling grows stronger every day that be- 
fore this war is ended, slavery must, either by some such 
wholesale declaration as that of Hunter or through the 
operations of such a bill as that passed for the District 
of Columbia, be finally ended and blotted out; and God 
grant that we get rid of it speedily." 

But the rupture between Chase and the President was 
not yet very serious, for in writing to Jay Cooke on 
May 31st, the Secretary said: "I have read your 
father's letter, and feel very much as he does. We 
are certainly too lenient; but the President hates to be 
harsh even when harshness is deserved. He thinks too 
that it is wisest not to be harsh, and though I find it 
hard to acquiesce, yet I must say, I have always found 
his judgment wonderfully good." 

On July 7, 1862, Fahnestock, reporting an interview 
which he had just had with the Secretary of the Treas- 
ury, writes: 

The Governor reiterates in stronger terms than ever his dis- 
trust of McClellan, says he is " the cruellest imposition ever 
forced upon a nation and has cost us fifty thousand of our best 
young lives. In answer to my soundings as to the prospect of 
offensive demonstrations against Richmond he says, " Mac will 
never be ready to take Richmond. All the reinforcements that 
can be sent him will not place him in a position to move success- 
fully." These are nearly his own words. He seems impressed 
with the idea that Mac is a total failure. That there is nothing at 
all in him, that he is not and never can be equal to the position in 


which he has been placed, that he (Governor C.) was instrumental 
in placing him there but that he long since " washed his hands " 
of it . . . Now all this bitterness (in which the Governor 
is perfectly honest) is directly at variance with the opinions of 
the masses civil and military. I have conversed with scores of 
the latter fresh from the field and though mangled and maimed 
they are full of fight and anxious to be again with " Little Mac* 
One poor fellow on Saturday (in the ofike) had a pistol ball 
in his arm and a musket ball had entered his cheek close by the 
nose and passed out under his chin, but said he '' would soon 
be fixed up and back again." ... I am satisfied that Mac 
has not been properly treated, that desired reinforcements have 
not been given him and I only fear that now when he has his 
battle half fought his honors will be shared by some one of the 
newly imported generals. From Governor C.'s feeling I am sure 
he would like nothing better than a change. But I think that 
Lincoln feels more than ever disposed to give Mac a full and 
fair trial. ... I regard Governor Chase's intense hostility 
to McClellan as a dangerous feature. How far he may press it 
I don't know. H. D. will have opportunities to sound him. You 
know the Governor is very firm in his convictions and generally 
carries his point. 

Secretary Chase now again contemplated resignation 
from office as indicated by a letter which he addressed 
to Jay Cooke. At a despondent hour he wrote to the 
financier as follows : 

Washington, July 4, 1862. 
My dear Mr. Cooke: 

The anniversary of our national independence. How sad the 
state in which it finds us ! Is it the darkest hour before the dawn ? 
God grant it. 

I have no heart to go anywhere just now. In a few days I 
hope to feel better; and possibly after the adjournment of Con- 
gress may find time to make a short journey, if indeed I do not 
make my way to my cottage on the Miami and stay there. 

Please let Nettie come home with H. D. and say to Mrs. H. D. 


that I insist on her coming to keep house for me until she goes 
into her own house in Georgetown. 

Yours most cordially, 

S. P. Chase. 

Governor Chase's antipathy to McClellan very shortly 
led to his direct attacks upon Lincoln. Henry D. 
Cooke who did not share Fahnestock's love for the gen- 
eral, writing on July i6th, reports to Jay Cooke more 
interesting secrets of the cabinet: 

It was rumored yesterday that the President was preparing a 
veto message on the Confiscation Bill and Governor C. was very 
anxious about it. He told me that the President had not con- 
sulted him — nor so far as he knew a single member of his 
cabinet in regard to the matter. He was certain that he was 
writing some kind of a message for he was closeted all day and 
even dispensed with the usual cabinet meeting, yesterday being 
the regular day. Governor C. thinks it cannot be possible that 
Lincoln would do such a thing as veto the bill. If he does there 
will be an end of him. Governor C. says that Lincoln takes his 
own course in regard to military matters and the war policy in 
general, that he does not even consult his cabinet or make them 
his confidants. He says that the President is alone responsible 
or entitled to credit or blame, that the secretaries are responsible 
only for the management of their separate and several depart- 
ments. The Governor says he is willing to be responsible for 
his administration of the Treasury but he is not willing to be held 
accountable for other people's blunders or errors of policy. I 
am sure that he would like to have it known that the President's 
policy is his own and not that suggested by his cabinet. 

Jay Cooke always believed that he was an important 
factor in determining the President to displace McClellan 
from the supreme command in July, 1862, in favor of 
General Halleck. He writes in his Memoirs: 

"For more than a year before the removal of Mc- 


Clellan from the command of the Army of the Potomac, 
this removal was urged by thousands of influential and 
patriotic men, who while honoring General McCIellan 
for his many good qualities, as an organizer of armies, 
yet deemed him unfit as a leader of those armies, and 
chafed at the great delays and wasted opportunities. 
This feeling of disappointment and doubt so took hold 
of the popular mind, that gloom and depression prevailed 
universally. I found the subscriptions to the loans I 
had in charge rapidly falling oflF, so that finally with 
Mr. Chase's consent and desire, I went to Washington, 
and with my brother, Henry D. Cooke, visited Mr. Lin- 
coln with the design of showing him the absolute neces- 
sity of placing some more pushing, active and bold war- 
rior in McClellan's place. At this time, Mr. Lincoln 
was living temporarily at the Soldiers' Home, and after 
tea, my brother and I drove out there. We found a 
large crowd of officers and civilians there paying calls 
and on business, and were requested by Mr. Lincoln 
to remain until these people had left for the evening, 
so that it was past ten o'clock before we began our con- 
ference. Mr. Lincoln had his youngest son on his lap, 
while we were talking. I began by reminding him that 
the sole charge of raising the vast sums daily required 
was committed to me, that I was not a politician, that 
I desired no office, but under God was trying to do my 
duty in aid of my country, and that I now came to him 
to plead for a change of commanders of the army, and 
a more active pressing eflfort to bring the war to a 
speedy close. I told him that I came direct from the 
people, and knew their thoughts, and especially had felt 
the pulse of finance, and feared with all my eflforts 


a feeble response to my appeals, unless the gloom and 
doubt occasioned by McClellan's supineness and inac- 
tivity could be done away with. I impressed these 
views upon Mr. Lincoln earnestly and almost plead- 
ingly, and have every reason to know that they accorded 
with his own; but Mr. Lincoln, it is well known, had a 
tender heart, and he hated to remove McClellan until 
satisfied that the people and circumstances compelled 
him. The result of this long conference reaching to- 
ward midnight, was the removal of McClellan within 
the week, so that I have always thought that my inter- 
view and appeal were the immediate cause of Mr. Lin- 
coln's prompt action.'' * 

Affairs reached a serious crisis of course after the 
second battle of Bull Run, late in August. Again the 
reports sent to Jay Cooke by Henry D. Cooke are of 
much interest. "The cannonading and even the long 
volleys of musketry can be distinctly heard from the 
front porch of my house in Georgetown," he said.^ His 
wife and children went over to Washington "glad to 
get out of the sound of such music." The Secretary of 

^ The date of this interview is uncertain. " I am well satisfied from all 
I can see that you made a decided impression on the President and on 
Seward, too, notwithstanding his bravado." — Henry Cooke to Jay Cooke, 
July 23, 1862. 

" I am rejoiced at the turn matters have taken in Gov. C's favor or 
rather in favor of his views. People here would have rebelled if a change 
had not been made in the programme. You must not let Gov. C. think 
that I consider the articles as complete or satisfactory; they are only 
partially so but are progressive. I am busy half my time at least trying 
to instill Gov. C's and my own similar views into the people and the 
papers. My work seems increasing. We received Qver forty telegraphic 
despatches to-day and sent as many." — J. C. to H. D. C, July 25, 1862. 

2 Henry Cooke occupied a mansion which is still standing at 30th and 
Q Streets. 


the Treasury issued an order to all his clerks who could 
possibly do so, to abandon the business of the Depart- 
ment, and repair to the field of battle to take care of the 
wounded. In case of defeat, Henry Cooke thought it 
would be "the end of the republic/' Business was 
wholly suspended in Washington. Great excitement 
prevailed among the people. All trucks, wagons and 
private carriages found in the streets were impressed in- 
to the government service, and Henry Cooke freely 
tendered the use of the street car company's omnibuses 
(twenty five in all), horses, drivers and any of the 
equipment of the line which could be of value in the 
emergency. The Washington house of Jay Cooke and 
Company was stripped of almost all its funds, and what 
remained were put in order for removal at the first sig- 
nal of the coming of the "rebels." In the beginning 
there were reports of Union success, but when it was 
known that McClellan had failed to support Pope and 
that defeat had come largely, if not entirely, through 
the jealousy of commanders in the field, the rage of the 
people of Washington, and especially of those close to 
Mr. Chase was indescribable. Henry Cooke wrote on 
September 2, 1862: 

My dear Brother: 

This is the bluest clay of the war to me at least. I feel 
a sensation of indescribable sadness when I see the government 
drifting to certain destruction upon the rocks of petty jealousies 
and rivalries. Our army across the river is fast becoming de- 
moralized by their jealousies. Strange as it may seem both officers 
and men — a very large portion of them — are clamoring for 
the restoration of McClellan to the command in the field. . . . 
I have concluded as a matter of further precaution to send over 
to Philadelphia in a sealed package as a special deposit all the 


bills receivable in our hands except those coming due within the 
coming week. These we will keep and send the balance out 
of harm's way and if there should be any prospect of a bombard- 
ment or shelling I will send Lollie and the children over to 
Philadelphia, but I shall stay here, come what will, to protect 
our firm and railroad interests. 

. . . Don't think I am causelessly less hopeful or rather 
more despondent than usual. I have watched events coolly and 
dispassionately and have the very best means of knowing every- 
thing of importance that occurs. The only time I get excited 
is when I think how this grand government is being wrecked 
because those military pilots who should guide it through 
the storm have left the ship to drift while they are trying to cut 
each other's throats. It is not the enemy I fear but our internal 
dissensions and disgraceful strife. If we were only now united 
on the field as the rebels are we could crush the rebellion with a 

Again on September 3d, Henry Cooke wrote: 

Dear Jay: 

I have very little to add to my advices of yesterday. Our 
army (stricken as it were by a fatal cowardice, demoralization 
or blindness) has been steadily falling back for the past 36 
hours towards and into the entrenchments on the heights oppo- 
site Georgetown and along down to Alexandria. The forts are 
being rapidly mounted with monster guns, and 5000 sailors 
(from men of war) who are accustomed to handling the heavier 
pieces on shipboard are on their way hither to aid the regular 
artillery who will take care of the lighter pieces. The gunboats 
are in position along the river about Alexandria. McClellan 
is again in chief command and Stanton did not resign and I am 
assured by one who knows he will not resign in the present 
emergency. The reinstatement of McClellan is in consequence 
of the clamor of the army which virtually refused to fight under 
any one but McClellan. This is an unfathomed mystery to me. 
It shows the extent of McC.'s partisan machinations. I believe 
the clamor was manufactured and inflamed by his emissaries, 


that it was not the real desire of a majority of the army and that 
the President should have put it down by a drumhead court 
martial and instantaneous shooting of all engaged in it or at 
least of the ringleaders so as to put an end to military dictation 
over the constitutional authorities of the land. These too are 
Gk)vernor Chase's views. I spent nearly two hours with him 
alone last evening and we talked freely. He regards the pros- 
pect as full of doubt, gloom and uncertainty and would not be 
surprised if the worst should happen. This too is the opinion of 
others of the government and of most of those who have the 
best means of knowing the position of affairs. . . . 

To show the feeling of the government it is taking extraordi- 
nary measures of precaution in addition to those above referred 
to. The barrooms and restaurants where liquor is sold have 
been closed for three days and the liquor put away, the citizens 
are called on to give up all (or as much as they can) of their 
houses to the wounded soldiers and are appealed to for lint and 
all the Department clerks are to be immediately enrolled and or- 
ganized into military companies for the defense of the public 
buildings and city. 

Henry Cooke being in this state of mind, naturally 
advised his brother to "work off" his stock of govern- 
ment securities. We have a delightful view of Jay 
Cooke's equable temper under the most trying situations, 
in his refusal to share the excitement of the time. He 
wrote his partners at the capital, that there was no need 
to fear the capture of Washington, and suggested that 
his brother should look after his "nerves" which led to 
a letter of September 4th: 

The distant public have had no conception of the true source 
of trouble — of the demoralization of the army, which vir- 
tually rebelled against the government, refused to fight the 
enemy when victory was in our grasp and disgracefully retreated 
to the cover and protection of our fortifications before a worn- 
out and half whipped foe because their own choice of generals 


did not happen to be in command. Thus the golden opportunity 
of the war was allowed to slip by and the rebels have gained 
what may be fairly claimed by them a substantial victory. I 
tell you, Jay, this manifestation of an insubordinate spirit by our 
army is the worst and most discouraging feature that has yet 
manifested itself. I make this explanation for fear you may 
have misunderstood me from an expression in your last. My 
nerves have not been in the least disturbed but I have been heart 
sick when I have seen the country sacrificed to the damnable am- 
bition of petty generals who would rather the Union army should 
suffer defeat than that a rival should get the credit of a victory. 
Henceforth, now that McC. is in command, there will be no more 
attacking from our side; and no more fighting unless we arc 
driven like a cornered and cowardly rat to repel the attack of our 
enemy. Jay, this is truth. 

This was the truth, not only as Henry Cooke saw it; 
it was the view of Mr. Chase, and without the adjectives 
it is the view of the historian at this cool distance of 

They do say, at least Pitt says, [writes Eleutheros Cooke to 
Jay Cooke on September 4th] that in the midst of the overwhelm- 
ing and disgraceful disasters inflicted upon our country by mili- 
tary incompetency you remain " cool, self-collected and calm as a 
summer sea." Is there no way to infuse into the administration 
at least some slight comprehension of the difficulties of the crisis 
and of the duties necessary (as extreme war measures) to over- 
come them? If not they will hear thunder all along the sky 
where they least expect it. The patience of the country is ex- 
hausted. . . . Both the cause and the support of the rebellion 
must be struck down. Humanity, duty, necessity, patriotism, 
even mercy require that we should utterly crush and destroy the 
means of the rebels to prosecute their murderous warfare. 

Jay Cooke had written to Henry E. Johnston, a Bahi- 
more banker, with whom he was later to have important 
financial connections, predicting the termination of the 


war in 1862. Mr. Johnston did not share the Philadel- 
phia financier's "sanguine views/' On the contrary he 
looked "for many years of hostilities with increased bit- 
terness of strife." "Indeed," he continued, "we can see 
no termination at present except in the total prostration 
of one or the other side unless returning reason should 
resume its sway and prevent this fearful eflfusion of 
fraternal blood, and you must not call me a 'rebel' for 
expressing these views. May God in his mercy defend 
the country from two more years of so horrible and un- 
natural a strife." 

Jay Cooke had expressed this hopeful view, it is true, 
before the second battle of Bull Run, but his prophecy 
was but one small illustration of his confidence in the 
Union, and the spirit in him which was so usefully em- 
ployed in infusing all around him with fervor and pa- 

The censorship of the telegraph was becoming rig- 
orous, and as the Philadelphia and Washington houses 
were in communication constantly, all movements, if they 
were to be conducted wisely, depending upon early and 
accurate apprisal of the course of the President, the 
heads of Departments, Congress and generals in 
the field, a cipher was devised, the partners holding the 

Furthermore, despatches of great importance were 
sent by individuals in the office of Jay Cooke and Com- 
pany, Washington, to clerks of Jay Cooke and Company, 
Philadelphia, at their home addresses. The cipher was 
ingeniously formed from terms in common usage in a 
banking house, so that "clean" appearing despatches 
could be prepared, thus easily passing the scrutiny of 


the censor. Secession army was Vermilye and Com- 
pany; artillery — Drexel and Company; won decisive 
victory — ^place to credit ; retreat — discount ; Washington 
— ^bonds ; Lincoln — Belmont ; Chase — Colgate ; great loss 
on our side — will not be paid this week, and so on. Thus 
a business-like looking telegram to Jay Cooke and Com- 
pany, dated Washington, August 29, 1862, "J^^^'^son 
buys six thousand legal tenders of Fox and Company,'* 
became when translated in Philadelphia: "Pope cap- 
tures 6000 cavalry at Warrenton." And on September 
i8th, while the battle of Antietam was in progress, 
"Sweeny applies for more. Decided change in market 
and cannot reply positively" was "McClellan applies for 
help. Tremendous battle going on. Result undeter- 

Despite occasional criticisms and reprimands which 
did not strike very deep, Mr. Chase was now looking 
to Jay Cooke as an adviser and assistant in all the graver 
movements of his department with more confidence than 
ever before. Indeed the Secretary was in an entirely 
helpless position. He had offered the great five-twenty 
loan and it could not be sold. On September 5, 1862, 
Mr. Cooke received this telegram from Washington : 

The Governor wants you to come soon as possible. Asked 
me to telegraph and get your answer and beg you not to refuse. 
He wants you to stay over Sunday. Answer. 

Jay Cooke and Co. 

And Henry D. Cooke wrote the same day: 

We telegraphed you that Governor Chase wants you to come 
on immediately. If you can possibly come, do so. The Gov- 
ernor needs you now more than ever before. He wants both 
your advice and your assistance, and it can be made profitable 


to you. He said, " Tell Jay to stay with me, for I want every 
moment of his time I can get. I want him if he will to spend 
Sunday with me — quietly and alone." He told me to insist in 
his name on your coming, and get your answer at the earliest 

On September 20, 1862, Henry D. Cooke wrote again : 

I had an interview with Governor Chase this morning. He 
has been awaiting events before writing. I supposed he had 
written ; as he said he would do so. This morning he told me he 
had not written; but that there were a good many things he 
would like to say to you if he could get a chance. He was in 
hopes you would have run over with Kate, yet he did not feel 
he had a right to ask you to come so often, although you could 
not come too often to suit him. As I feared (and as I wrote 
you in a letter received at Philadelphia the day you were last in 
New York) the New Yorkers and especially Cisco are jealous 
of your agency in the matter. The Governor says they seem 
to think that Philadelphia should not be consulted until after 
New York has had her say and fixed it all her own way. I told 
the Governor that you did not reciprocate such a feeling ; but that 
you would like to hear from him and had been expecting a letter 
for several days. The fact is I am convinced that they kicked 
up something of a " row " because instead of going to them 
directly he went to them through a third person. They are as bad 
as our generals in the field. They would rather the public inter- 
ests should suffer than that their petty pride should be rubbed by 
a fancied slight. You have friends enough in your own imme- 
diate circle in New York to carry out any such programme with- 
out going to Cisco or any of his tribe and if I were in your place 
I would have nothing to do with him. The Governor was 
evidently provoked by them though (between us) he said he 
wouldn't give you for all and everybody else put together and he 
depended on you more than on any one else. 

Mr. Chase had now overcome some of the qualms of 
conscience with which he had been troubled when he re- 





turned the coupe, for on February 7, 1862, he wrote: 

My dear Cooke: 

I congratulate you on the rise of your seven-thirties. And 
now I want to be a borrower myself. Will you lend me $2000 
in the shape of your draft on New York? If so please send it 
to me immediately. I want it to pay on account of a store I am 
rebuilding on Katie's property in Cincinnati. 

Your friend, S. P. Chase. 

Throughout the year 1862, at Chase's solicitation, 
Cooke was investing various sums of money for the 
Secretary, with a view to obtaining for him the largest 
possible income on his fortune. Every few weeks 
he received checks which represented the proceeds of 
various speculations in railway and industrial stocks con- 
ducted with a practical banker's acumen plus a very 
generous regard for a friend's best pecuniary interests. 
This had gone so far that the Puritan took fright at the 
apparition of his alter ego. He repeatedly urged the 
financier to write him private letters about private mat- 
ters. This Mr. Cooke endeavored to do, but to one of 
his temperament the tact or craft of the politician was 
quite foreign — the need of it inexplicable. He had 
naught to conceal. Forms were nothing; the ends to be 
attained all important, and in a humor from which he 
was never entirely free, even in the presence of Jay 
Cooke's openness, confidence and enthusiasm. Chase 
wrote on October 24, 1862, as follows: 

My dear Cooke: 

I must again remind you of the necessity of putting a little 
more form into the address of your letters to the Secretary of 
the Treasury. He is a very particular person and don't like to 
have private and public matters mixed. Please commence ail your 
letters on public matters to him with " Sir " and write separate 


letters on matters in which you are trusted jas a confidential agent 
and other matters in which our action is not confidential but 
ordinary. All these letters whether confidential or not must go 
on file. Letters on private matters may be addressed dear 
Governor or dear friend or as you will, but let them contain 
nothing on public business and vice versa. 

Your friend, 

S. P. Chase. 



The next, or third crisis in the financial history of 
the war was reached late in the year 1862. The first 
had been passed through the aid aflforded the govern- 
ment by the Associated Banks, Jay Cooke, as we have 
seen, materially assisting Secretary Chase in this emer- 
gency. The second crisis was met by Congress, to 
which the responsibility justly inheres, by the enactment 
of the legal tender laws; and now at the end of 1862, 
as military reverses rapidly succeeded one another to sap 
the courage of the North, relief was found in the great 
and successful "five-twenty" loan. To Mr. Cooke, and 
to him alone, is due the credit for this brilliant financial 
operation. It was a sweeping triumph for him, for 
Secretary Chase, by whom the honor was eagerly taken 
in furtherance of his presidential ambitions, for Mr. 
Lincoln and for the nation at large. Demonstrably it 
dispirited the South, gave Europe, especially England 
and Napoleon, useful evidence of the determined cour- 
age and material wealth of the Northern people, and 
was a factor of vast importance in deciding the fate of 
the Union. 

To those who have discredited the work, and some 
both then and since have done so, saying that the five- 
twenty loan was not a loan but a mere conversion on 



terms very disadvantageous to the government,* the 
study of the life of Jay Cooke will probably be uncon- 
vincing. They do not express the opinion of the body 
of the people of their own time, or the sober view of the 
historian and economist of this day, and the selling of 
these bonds looms in the annals of national finance as a 
very large achievement, essential to the successful con- 
duct of the war. 

Upon the suspension of specie payments and the 
emission of the legal tender notes, gold became a com- 
modity which was traded in on exchanges like wheat, 
com, cotton or any other staple. It often attained a 
very fanciful and exorbitant premium which reflected 
two principal facts — the redundancy of the irredeema- 
ble paper currency and the speculative daring of a small 
group of men displayed amid noisy scenes and gov- 
erned by the turns of the great military contest. Thus 
was gold bought, sold and "cornered." It fluctuated 
wildly, and throughout the war it was the favorite com- 
modity for the speculator, since the range of gain or 
loss in price was large and the changes sudden and ex- 
citing. It is idle to deny that gold was not worth a tol- 
erably large premium over the notes, bonds and secur- 
ities whose value was measured in the terms of the legal 
tenders, but it is very foolish to assert, as some then 
did, that the speculators were not the evil geniuses 
which Jay Cooke said they were to make the fluctua- 
tions so wide and violent. In New York where the 
business centred, an entire section of the Stock Ex- 
change called the Gold Room^ was set aside for these 

^ Compare Newcomb and Sumner. 

2 Graphically described by Horace White in Money and Banking, 


Operators, and Philadelphia and other cities also had 
their "Gold Boards." 

Already on January 13, 1862, gold was selling at 
103, or at a premium of $3 upon each $100 of green- 
backs. It rose to 119 during July, crossing 120 for the 
first time in September, 130 in October, and upon the 
last day of the year, December 31, 1862, was quoted at 
^33^«* The streams in the circulating system being 
raised and swollen by the legal tenders, the certificates 
of indebtedness and minor paper issues, Mr. Chase made 
his arrangements to float the great loan. By the first 
legal tender law of February 25, 1862, as we have noted. 
Congress authorized $500,000,000 of six per cent, bonds, 
payable after five and in not more than twenty years, 
wherefore their name the five-twenty sixes or more 
briefly and popularly the five-twenties. The grant had a 
double value, and it was made perhaps with the idea 
of securing the legal tenders which were to be con- 
vertible into the bonds (thus answering the objections 
of those who would have opposed the issue unalterably, 
if they had thought it entirely irredeemable), rather 
than as a means of opening up a new source of public 

Mr. Cooke in 1862, had continued his sales of the sev- 
en-thirties and the six per cent, bonds (8is) of 1861, 
both in Philadelphia and Washington and had made 
some rather unimportant dispositions of the five-twen- 
ties. In the fiscal year which had ended on June 30, 
1862, the public debt had been increased to $514,211,- 
371.92 and the principal items for the twelve months 

^ Schuckcrs, Appendix. 


Seven-thirty Notes (three year bonds) $122,836,550 

United States Notes (legal tenders including the 

" Demand Notes '*) 149,660,000 

Temporary Loans to Sub-Treasuries 57,746,116 

Certificates of Indebtedness 49f88i»979 

In the fiscal year the Secretary of the Treasury had 
received only $13,990,600 from the five-twenty loan, and 
to the end of November it had yielded him but $23,- 
750,000/ He thought that the government might reas- 
onably expect an income of $35,000,000 more from the 
law by the end of the fiscal year, June 30, 1863. He 
despaired of any large or valuable revenue from this 
source unless Congress should amend the terms upon 
which the bonds could be distributed. 

Indeed, Mr. Chase was so thoroughly discouraged 
with the prospect of making the five-twenty loan of 
value to the government, that upon the testimony of his 
assistant, George Harrington, he was ready to advise 
the law's repeal in his Report of December, 1862. The 
bonds, Mr. Harrington declares, were "an innovation 
upon all precedent and were repudiated by banks and 
bankers who would none of them." 

They were "peremptorily refused in the market for 
nearly twelve months.'' Noting the suggestion for 
the repeal of the provision, Harrington visited the 
Secretary and asked his chief why he had determined 
upon this course. "Because,'' said Mr. Chase, "with 
all my efforts I have been unable to dispose of a sin- 
gle bond." ^ After this conference the Secretary 

1 Report of the Secretary of the Treasury, December, 1862. 

2 Extracts from the Forthcoming Work Entitled Personal Recollections 
and Official Experiences, by George Harrington, a pamphlet printed at 
Portland, 1892, p. 12. This book seems not to have been published. 


changed his decision with an explanation of the reas- 
on why the issue could not be sold. The difficulty 
in his belief rested in the fact that the bonds must 
be distributed at their "market value." This clause 
was inserted for the specific purpose of conferring upon 
the Secretary of the Treasury the right to decide when 
the exigencies of the situation required the sale of a 
loan at less than par, the par restriction having made 
impossible some operations early in the war; but he 
now sought amendments at the hands of Congress, to 
which he desired to shift the responsibility for the fail- 
ure of this large financial undertaking. The advance of 
the five-twenties to a price above par was impossible, 
said the Secretary, because of the legal tenders which 
would at once be exchanged for them, and he had no 
intention of fixing their value far below lOO. If Con- 
gress did not change the law, it must make provision 
at once for new loans.* 

Whether or not Mr. Harrington was well served by 
his memory when he took to himself the credit for hav- 
ing saved the five-twenty loan, is not easy to deter- 
mine. The answer to this question depends upon the 
time of the preparation and revision of Secretary 
Chase's draft of his report to Congress. If it were 
ready in September or October, which is improbable, 
then the episode described by his assistant may relate to 
this loan. Otherwise the testimony must be disallowed, 
for Mr. Cooke was busily putting out the bonds two 
months before the Secretary of the Treasury sent in his 

Already in the first months of 1862, Jay Cooke had 

^ Report of the Secretary of the Treasury, December, 1862. 


been selling considerable amounts (if relatively small, 
measured by the standards which he soon established) 
of the five-twenties. On June 12, 1862, Henry Cooke 
wrote to his brother that he had just come from Mr. 
Chase's office, and that the Secretary had determined to 
offer the loan through them, having had enough of ''out- 
side parties." At this particular time he seems to have 
been holding back the issue because of a little difficulty 
arising from the premium on the gold required for back 
interest. Henry Cooke took the matter to Chase with 
Jay Cooke's "remedy," which was "to sell at par with- 
out reference to the interest and to stamp on the face 
of the bond the date of sale, etc." "Your suggestion," 
Henry Cooke adds, "will probably be adopted. It 
was very favorably received." On July 23, 1862, Mr. 
Cooke remitted $345,000 for five-twenties and he was 
making regular weekly sales and returns altogether 
aggregating up to the middle of October about $3,000,- 
000 which directly contradict Mr. Harrington's version 
of Chase's statement, that no bonds had been or could 
be sold. The sums were of course not great enough 
to satisfy a Treasury whose requirements were near 
two millions of dollars a day, and the Secretary made 
inquiries in New York to determine what price could 
be obtained for larger amounts of the bonds. Mr. 
Cisco, the Assistant Treasurer in that city, and others 
with whom he conferred, thought that sales could not 
be effected at more than 97 or 98, meaning a loss to 
the government of from two to three millions on each one 
hundred millions of the loan.* Mr. Cooke had always 

* Schuckers, pp. 345, 137. Cisco to Chase, Oct. 10, 1862, in Chase papers 
at Library of Pennsylvania Historical Society. 


declared that he could distribute the five-twenty bonds 
among the people at par, but he must bide his time until 
other men — many of them quite unfriendly — were con- 
sulted, and the Secretary, considering the political as- 
pects of his movement, was ready to give the Philadel- 
phia banker the opportunity he desired as the govern- 
ment's sole financial agent, with the whole country as 
the field of his operations. 

The Secretary of the Treasury wrote to Jay Cooke 
therefore as follows: 

Treasury Department, Oct 23, 1861. 

The conversions of United States notes in five-twenty years 
six per cent, bonds are quite too slow to meet the wants of 
the government created by the war. I have carefully considered 
many suggestions made of modes of hastening them. Two only 
seem to be entitled to much consideration ; first a negotiation of 
a large amount of the bonds, say fifty milHons for United 
States notes in the way of loan ; and second stimulations to 
convefsions by enlisting in the work a number of agents very 
much in the same way as was done in the case of the popular 
loan. The first mode is most convenient in several respects. It 
would relieve the Department of responsibility and trouble; it 
would secure the needed amount at once, and it would probably 
engage the heartiest support of the large capitalists. On the 
other hand it would be the most expensive mode. The act of 
Congress makes all the United States notes convertible into 
5-20 bonds at par and of course makes it impossible to obtain 
subscriptions to these bonds except from investors at that rate. 
Very few subscribe for large amounts of a loan except with a 
view to profits from resales and it is too plain for comment 
that where the government is always in the market offering her 
bonds at par for her own notes, subscribers to these bonds in 
large amounts cannot expect to make profits if they take them 
at par. Hence in order to obtain these notes for bonds from 


capitalists desiring to make their profit, not by interest but by 
resale, it is absolutely necessary to give them a margin for that 
profit by sales to them at some rate below par. All the informa- 
tion I can collect leads me to think that no higher rate than 97 
50-100 or at most 98 could be obtained for the bonds in this 
way and there is some reason to fear that not even those rates 
could be obtained. On fifty millions the best rate suggested 
would involve a loss to the country of two per cent, or one mil- 
lion dollars. I do not like to incur this loss if it can be avoided 
though I feel that it is better to incur this loss or even a greater 
one than let the public creditors and the public credit suffer. 
My thoughts turn therefore to the second plan and remembering 
your great success as an agent for the national loan in obtaining 
subscriptions, and considering that as an agent for conversions 
into 5-20S you have on the limited scale to which your action 
is now confined succeeded better than any other officer of the 
government, it has seemed to me possible that by enlarging 
your sphere and increasing your compensation so that you 
can pay sub-agents, and defray expenses of very liberal ad- 
vertising, conversions may be stimulated as to secure the needed 
funds without the sacrifice which a loan would involve. To do 
this it would be necessary to raise the conversions to a million 
dollars per day. Can this be done? Are you willing to un- 
dertake it? If you answer these questions affirmatively I pro- 
pose to allow you Yi of one per cent, on the first ten 
millions converted, and J4 of one per cent, on all the 
excess, in consideration of which you select your own sub- 
agents, being of course responsible for them, allow them at 
least y^ of one per cent, on the first 10,000,000 and 
i/io on the excess, and pay yourself all the expenses of 
advertising, circulars, etc. Your present bond as agent does not 
cover your responsibility under this extended agency and it 
will of course be necessary to execute a new bond. It will not 
be necessary to increase the amount $200,000 as you will be ex- 
pected to pay over to the Assistant Treasurer so promptly as 
never to have that amount in the hands of yourself or sub- 
agents. Your immediate attention to the matter is desired as 


action cannot be too prompt. The present moment, seems more 
favorable for the attempt than any since the defeat before 
Richmond, and I hope aspects are to brighten instead of darken 
henceforth. With great respect. 

Yours truly, 

S. P. Chase, 

Secretary of the Treasury. 
Jay Cooke, Esq., Philadelphia. 

Mr. Cooke agreed to undertake the agency which was 
proposed in this letter although he said that the allow- 
ance was too small to procure the largest and best re- 
sults; he wished at least three-eighths upon all sales 
above $10,000,000. The Secretary authorized the work 
to proceed, saying if an allowance greater than one- 
fourth were found to be indispensable after they should 
have passed $10,000,000 they could return to the dis- 
cussion and make the matter the subject of future nego- 

Mr. Cooke's partner, William G. Moorhead, wrote 
from Sandusky on October 28th : 

I am delighted at your success with the government. This 
arrangement places you in the position desired and gives ample 
scope for the exercise of your financial abilities. The field is a 
large one but I have confidence in your ability to cultivate it. 
The only difficulty that presents itself to my mind is that of the 
sub-agents. If you are to be responsible for them it will re- 
quire great caution and management to prevent losses. The 
amount involved being so large, the risque will be very con- 
siderable, unless you require of them the same that the gov- 
ernment requires of us, payments in advance. I presume you 
will arrange chiefly with the banks of New York, Boston and 
Philadelphia. What will the New Yorkers say about it? I fear 
they will " cut up " in some way. They must admit that our 
village can accomplish something as well as the great city of 


New York. Write me all about it and what prospect you have 
of selling. I put you down for $100,000,000. Am I too ex- 
travagant ? 

Mr. Cooke entered upon the delegated task with 
characteristic promptitude and energy, introducing on a 
large scale the methods he had so successfully pursued 
in a smaller field in reference to the seven-thirty loan in 
1861. "You have gone into it with a startling energy 
and vigor/' wrote Henry D. Cooke on October 29th, 
''and we must try to keep up with you, if we can in our 
humble way. . . . The Governor is much gratified. 
. . . . He came over to see us last evening and 
we had a good talk." 

Further evidencing his satisfaction, Jay Cooke re- 
ceived a letter from Secretary Chase dated November 
8th, in which he said : 

"I am gratified by the success which has attended your 
efforts thus far and appreciate the great liberality you 
have shown in the use of so much larger a proportion 
of the commission than I suggested in advertising, in 
compensation to local agents and otherwise. '* 

Mr. Cooke desired larger allowances so that he could 
render his agency still more useful to the government 
and in a few days this letter came from Mr. Chase: 

Washington, Nov. 13, 1862. 
My dear Mr. Cooke: 

I have your letters official and unofficial. The former I have 
officially acknowledged. The latter gratify me equally. Your 
success thus far has been all that could have been reasonably 
hoped, and I expect great things from your energetic and 
zealous agents as well as from yourself. I am delighted with 
the hopeful and resolute tone of the extracts you send me. 


You must not think me parsimonious because I keep an eye 
on outgoes. I am ready to share my own with any deserving 
man but I hate to be lavish where the public is concerned. The 
People trust me and I feel their trust as a great obligation con- 
stantly. Nothing is nearer my heart than to do exactly what 
they would wish me to do could their great honest eye look right 
at my whole public conduct. 

Please have sample specimens of affidavits, notices, etc., sent 
me. I want to keep a book of them. I regard this as the second 
great national or popular loan and I want to preserve a full rec- 
ord of its progress and results. 

Your friend, 

S. P. Chase. 

In the first week of November Jay Cooke owed the 
United States $1,500,000 for bonds, so large an amount 
that it gave his Washington partners a fright and 
caused them to advise him to reduce his balance at once. 
"It would look badly if it should get out," urged Henry 
D. Cooke, although the business required a much 
greater working balance, which the firm soon gained, if 
the transactions were to be conducted on a large and 
successful scale. 

Mr. Cooke at once sent out travelling agents to con- 
fer with bankers, establish sub-agencies, visit newspaper 
editors and act for him in fields which he could not per- 
sonally reach. They reported to him their adventures 
and observations, many of them sufficiently curious. A 
clerk in the Philadelphia office, Robert Clarkson, in De- 
cember made a trip through Ohio, Indiana and Illinois. 
He met luke-warm Unionists in a region where they 
might least be expected to abide, writing from Columbus, 
O., on December 7th : 


There is a growing disposition to have Ohio take care of her- 
self, and the murmurs are by no means concealed that while 
the war is employing the machinery and capital of the Eastern 
states the West is left in the cold, with communication entirely 
cut off, the Baltimore and Ohio Railroad left almost criminally 
out of us and goods and freight of all descriptions lying on the 
sidings for want of cars and transportation. The loco foco 
element do not pour any oil on the troubled waters, but point 
to the fact that New England and New York and Pennsylvania 
are gaining all, and that the Northwest had better join the 
Southern Confederacy than see things continue in this way. 
These things will only stir me to greater action and I mention 
them as reasons why I must stay longer here in central Ohio 
than I anticipated. 

On December nth Clarkson wrote from Dayton, O. : 

The papers here are all right except the Empire which is in 
Vallandigham's interest, and this you know is his district and 
very shabby politically. Much good will be done and I hope 
that heavy sales will be made. Vallandigham in the canvass 
used to illustrate the Democratic rule by a $5 gold piece, the 
Republican by a greenback and then show a Continental shin 
plaster to indicate what the country was coming to. He is a 
vile dog, yet there are hundreds of farmers who swear by him 
and he could only be beaten by taking a new county on in the 
new apportionment. 

The peaceful progress of the loan was interrupted in 
December by the dispute between Seward and Chase 
which resulted in the resignations of both those secretar- 
ies. "There is a terrible row in the cabinet," Henry D. 
Cooke told his brother on December 19th. "This 
morning we wrote you the enclosed despatch. The tele- 
graph censor refused to allow it to go over the wires. 
. . . Seward has resigned. He was unwilling to re- 


main if Halleck and Stanton were retained. A caucus of 
senators had passed a resolution of censure against the 
administration, or more particularly against the Presi- 
dent and Seward (so report says) and Seward made his 
resignation absolute/' etc. 

The next day Henry Cooke had the correct version of 
the affair, at least as it was seen through Secretary 
Chase's eyes. He wrote to Jay Cooke : 

We notice that the Inquirer of this morning has all the details 
of the cabinet rumpus up to last evening. Our efforts to see 
Governor C. after Wm. G. left were unavailing as he was with 
the President up to a late hour (midnight) last night and again 
this morning, when we telegraphed you (between lo and 1 1 
o'clock) that he had resigned. He sent for me this afternoon 
and gave the reasons which induced him to resign — which in 
brief are as follows : He and Seward have long represented ri- 
val, if not antagonistic views of policy. The popular pressure 
acting through the Senate caucus compelled Seward to resign. 
Now what would be Chase's position if he were to remain in 
the cabinet? He already has tremendous difficulties to over- 
come in carr}'ing on the finances. Congress, he says, is very 
kindly disposed toward him and has given every evidence of 
confidence in him and his policy. The resolution of the senatorial 
caucus is not aimed at him, he knows, and is so assured by the 
senators themselves who passed it, so that of itself has nothing 
to do with his resignation, nor has the Train resolution (al- 
though he did not allude to it). But the clamor that will follow 
the resignation of Seward will much of it be directed against 
him and the existing opposition in some quarters to his financial 
policy will be intensified ten-fold by added hostility, from Sew- 
ard's friends. Every step in the future will be embarrassed 
by factious opposition. All this will be because Seward's friends 
will charge Governor C. with having been connected with the 
movement to oust Seward. Already there are whisperings of it 
which are made plausible by the pretext that Chase had gotten 















Seward out of the way for the purpose of obtaining and main- 
taining control in the cabinet. Although Governor C. recognizes 
the importance of his remaining in office to protect and perfect 
his policy, and feels his obligations to capitalists, who have in- 
vested in the loans, to do so as long as his capacity for useful- 
ness is unimpaired, he feels that if he were to remain in the cab- 
inet at his own instance under the existing circumstances his 
ability to carry through even his own measures would not be 
equal to that of another person sympathizing with him in his 
views. Hence, even his obligations to protect capitalists would 
be best subserved by resigning. The President has not accepted 
his resignation and insists upon his remaining. Congressmen, 
Senators and others are also urging him to withdraw his resigna- 
tion. He is in doubt what to do. He will probably let his res- 
ignation stand and put upon the President the responsibility of 
insisting upon his remaining in office. This will probably relieve 
him from imputations of Seward's friends and clear his future 
course of difficulties. But he has not made up his mind to re- 
main even if the President should insist. He says he wants to 
consult you freely and asked me to telegraph you to come. I 
told him of your Sunday objections, but he said he thought this 
a great national emergency, involving great questions that might 
affect the prolongation of the war indefinitely, and the loss of 
thousands of lives, and the ruin or happiness of millions, and he 
hoped you would consider yourself justifiable in coming. 

On December 22nd Henry Cooke was able to report 
that Chase and Seward were again at their posts, "all 
parties, senators as well as others, seeming to be very 
well satisfied that matters have been adjusted." Chase 
again urged Jay Cooke to come to Washington for a 
conference and he would have gone perhaps, even on 
Sunday, though travel upon that day was in violation 
of his life time rule, if he had been well enough to do so. 
But an indisposition developed into a sickness that kept 
him from his office for several days and when the two 


men did meet it was to discuss the financial legislation 
required of Congress for the year 1863, — Mr. Chase's 
national banking law, the question of a new issue of 
legal tenders, and other measures of capital importance 
to the country. 

Not to involve the narrative needlessly this chapter 
will be confined as closely as possible to the five-twenty 
loan. A provision in the new "omnibus" financial bill 
of March 3, 1863, worked the repeal of so much of the 
act authorizing the five-twenties as restricted the 
negotiation of the bonds to their "market value," a point 
regarding which an unnecessary ado was made in Mr. 
Chase's reports. It was provided furthermore that hold- 
ers of the legal tenders should present them for ex- 
change for bonds on or before July i, 1863, a measure 
of greater importance. An undoubted impetus was given 
to subscriptions by the thought that the privilege would 
be withdrawn at a definite date set not far forward, but 
it is to the personal equation — to Jay Cooke, that the re- 
markable success of the loan is to be attributed. 

The early months of the year 1863 were marked by 
great speculative excitement. Gold started at 133 in 
January, crossing 160 by the end of the month. On the 
last day of February it stood at 172, a price it did not 
reach again for more than a year. On February 24th 
when Jay Cooke was in Washington, Clarkson wrote: 
"The excitement in gold to-day baffles description and 
could not have been worse if Congress had been a 
stock board (bent on putting up some favorite article) 
instead of a body of legislators." 

William G. Moorhead again in the office in Mr. 
Cooke's absence wrote at this time : 


I regret to be obliged to say that gold almost reached the price 
I fixed some time ago, to wit: 75. Now I will change the 
figures to 100 where there is quite as much probability of its 
going as there was its reaching 50 or 60 some time ago. We 
must be prepared for anything in these times. My opinion is 
that nothing but extensive victories and the restoration of the 
Union can prevent gold reaching 100 within 60 or 90 days. 
Don't pronounce me a fool for this prediction. It is not so wild 
as my last was at the time it was made. We are keeping quiet. 
I am too timid to operate. When you are at the helm, I feel 
confidence, although we may differ in our views in regard to 

This panic was not unnaturally induced by military 
defeats and the fear of another large issue of green- 
backs, Congress being at the time in the midst of very 
angry financial discussions. On February 5, 1863, 
while the legislative commotion was at its height five- 
twenties were at 94^. On February 14th the Evening 
Bulletin of Philadelphia said : 

Gold is now selling at 155 and state railroad sixes are 
selling at 114, while United States sixes are selling at 97. We 
contend that all this disparity is the result of fear — groundless 
fear — fear induced by misunderstanding of the questions at 
issue as well as by the influence of domestic traitors who by every 
means are trying to perpetuate the theory of states' rights and 
the d€)ctrine that citizens owe a higher allegiance to the state than 
to the national government; as if the state could afford any 
guaranty to person or property in the event of anarchy in na- 
tional affairs. 

Jay Cooke now performed his first great feat of going 
into the market to support government stocks, an exer- 
cise which later won him so much reputation that to 
break the price of gold and correspondingly raise the 


quotations of bonds it was necessary only to publish a 
canard that he was about to visit New York. This 
achievement is described by Henry Cooke in a letter of 
December i, 1863, when Secretary Chase was com- 
plaining about the benefits Jay Cooke was supposed to 
be deriving from the interest on a balance of cash re- 
maining in his hands. Henry Cooke writes: 

I agree with you that you are entitled to any trifling advantage 
you may gain in this way as an offset to the risk you run of a 
decline in the market, and parties refusing to take the bonds off 
your hands. There was such a decline last winter when bonds 
went down to 95 and parties did refuse to take bonds on the plea 
that they were not delivered in the time promised [the govern- 
ment promised deliveries in three or four days and was at this 
period about thirty days behindhand in filling Jay Cooke's or- 
ders] and you and your agents had to take them, hold them and 
work them off. You did more than this. You went into the 
market and bought up every bond that offered below par and 
thus enhanced the government credit at great risk to yourselves 
to an amount ten-fold more than any possible advantage you 
could get in the way of interest occasionally received on deferred 
deliveries of bonds. 

In this manner the market was supported at a dan- 
gerous hour and in March, 1863, prices had so far re- 
covered that Mr. Cooke was receiving subscriptions to 
the loan at the rate of one million dollars a day. On 
March 24, 1863, Henry Cooke wrote from Washington : 

The Governor is immensely delighted at the way we are rolling 
in subscriptions to the 5-20. I showed him our footings for 
to-day up to three o'clock, $1,095,000 (since increased to $1,- 
165,000) and told him that if he would give us full swing the 
daily receipts could be run up to $1,250,000, and possibly more. 
He says if he could average by big lumps and all one and a half 


millions per day from the 5-20S it would be all he wants, and 
he would look for money from no other source. I told him I 
felt sure we could put the average up to that amount, if we could 
occasionally work oif ten or twenty millions on foreign account 
without interfering with domestic sales, etc. 

The next day Henry Cooke wrote on the same sub- 
ject in the same strain : 

I have done all I could, and so has Governor Chase, to hurry 
up the printing and forwarding of the bonds. ... I have 
shown him how the delay in deliveries checks sales as shown by 
the falling oif in to-day's orders. He is greatly delighted and 
says after he gets through with the 5-20S we must go into the 
big loan, using our present machinery which he desires us to 
extend to every nook and comer of the loyal states. His idea 
is to give us full control of all the issues — the 10-40 year bonds, 
legal tender Treasury notes and interest-bearing convertible 
Treasury notes — so we can offer subscribers the option. But 
for the present he will depend on 5-20S and if sales keep up until 
July 1st will offer nothing else. . . . If we can continue our 
success we can handle the whole of the government loan and the 
brilliancy of the achievement will silence and shame all cavil as to 
the means of its accomplishment and all envious accusations of 
" partiality " and " monopoly.*' As long as we serve the govern- 
ment well the Governor fears nothing from complaining parties 
and is willing to take the responsibility of putting it all into our 

The first great movement in this bond was now well 
begun, and it did not suffer any important abatement 
until the entire loan of 500 millions was distributed. 
Indeed it was oversubscribed to a considerable amount 
before Jay Cooke could bring his machinery to a stand- 
still. The great difficulty was to obtain enough bonds 
from the Treasury Department, which in turn was un- 
able to get deliveries from the printers and engravers. 


New plates were made and the force was increased, 
but the output was still insufficient for the demand. 
L. B, Chittenden, the Register of the Treasury, working 
as he was at a pitiable rate,^ could not affix his signa- 
ture to the bonds rapidly enough to satisfy the public 
requirements. Despite its sympathies, the Washington 
house of Jay Cooke was relentlessly "punching" the 
officers of the Department and urging them to greater 
activity, while they in turn asked Mr. Cooke to reduce 
his balance, an exchange of civilities which continued 
until the loan was closed. Early in April Jay Cooke's 
balance was $8,000,000 ($1,000,000 had frightened his 
young partners at Washington and some Treasury of- 
ficials a few months before) and nearly the whole 
amount represented orders not yet filled by the govern- 
ment, although the Department was furnishing Mr. 
Cooke $1,500,000 a day. "We keep at them day and 
night," wrote Henry Cooke in response to the request 
for greater promptitude in the despatch of bonds, "and 
they are straining every nerve to keep up." The mak- 
ing of still another set of plates urged by Henry Cooke 
later brought the capacity of the Department up to 
$2,500,000 or $3,000,000 daily, subject to the physical 
limitations of Mr. Chittenden in affixing his signature 
to the documents, much depending upon whether the 
orders called for the bonds in large or small denomina- 
tions. An acting Register of the Treasury was ap- 
pointed so that the Register himself could devote his 
whole time to this business. The name was engraved 

^ " Poor fellow ! I don't see how he stands it to sign his name so many 
times in a day in addition to the other hundreds of signatures to checks, 
certificates, etc." — H. D. Cooke to Jay Cooke, March 26, 1863. 


upon the registered bonds and various devices were em- 
ployed to improve the service. '*I am watching the 
operations with the closest attention/' Harrington wrote 
Mr. Cooke on May 2, 1863, "and I tell you I will work 
up to your own standard whatever that standard may 
be." Still the Department ran behind. In New York 
on May 28th when Jay Cooke met his sub-agents and 
boldly made rules for them that he believed would throw 
half the subscriptions in future into the sub-treasuries 
(thus losing him his commissions) he found them "al- 
most disposed to back out and quit the business.'' 
"The delay of bonds/' he remarked, "is ruinous and they 
say it is getting to be intolerable. It takes all their 
time to manufacture excuses." ^ 

In popularizing and selling the 5-20 loan Mr. Cooke 
largely relied upon the newspapers, although circulars, 
posters and the conversational powers of his agents and 
solicitors were also freely and successfully utilized. 
Never before or since in this country, if in any land, has 
the press been subsidized in the same large and system- 
atic manner. The newspapers were hired to support 
the loan and to serve Cooke, Chase, Lincoln and the 
Union, and they were closely watched and guided by the 
practical journalists who were employed with this special 
purpose in view. In Philadelphia the recognized organ 
of Mr. Cooke and Mr. Chase was the Inquirer. When 
it spoke throughout the war it was felt that it voiced the 
sentiments of the Treasury Department. Its publica- 
tion and editorial offices were in Chestnut Street very 
near the office of Jay Cooke and Company. In Phil- 
adelphia and sometimes in New York Mr. Cooke per- 

1 J. C to H. D. C, May 28, 1863. 



sonally visited the editors, both German and English, 
to indoctrinate them with his views. In Washington 
Henry Cooke was on warm terms of friendship with the 
correspondents congregated in that city, inviting them 
individually and in parties to partake of the hospitalities 
of his handsome home in Georgetown to be "filled full 
to the brim not only with edibles and bibibles, but with 
the glorious financial prospects of the future ;'* while Mr. 
Cooke's sub-agents and travelling representatives in all 
parts of the country made it a prime point, upon their 
principal's urgent request, to visit and advise with the 
editors of papers printed in all languages in their re- 
spective communities. Thus hope was put into faint 
writers ; Copperheads were made afraid and in many in- 
stances rendered harmless as doves; the people were 
treated to optimistic instead of the despairing cynical 
views to which they were often prone to surrender them- 
selves if left without inspiriting leadership; and the 
loan and the Union went forward triumphantly. 

Mr. Cooke not only inserted announcements of his 
agency in the advertising columns of newspapers, but 
also used their editorial and news columns lavishly. 
The editors and publishers to whom patriotic considera- 
tions were without appeal were touched at a more 
vulnerable point, and thus practically the entire news- 
paper press of the loyal states responded to his masterly 
direction on financial questions. He believed in the 
power of the press and to him as to Napoleon it was the 
Fourth Estate, a force to be reckoned with, and inci- 
dentally to be controlled with a strong hand. With the 
newspapers he would have risked the issue of almost 
any contest. Mr. Cooke's advertisements were as 


spirited and confident as the man from whom they ema- 
nated. He at once inserted an announcement of his ap- 
pointment in the columns of many different journals, 
and kept the loan before the people constantly. 

Nor were the readers of the German newspapers 
neglected by the indomitable financier. He placed much 
reliance throughout the war upon this thrifty people who 
for the most part were sturdily loyal to the Union cause. 

Mr. Cooke's agents advertised in their own names, if 
they preferred it, as in New York, where it seemed to be 
unpleasant to the people to be reminded that they were 
subscribing to a loan which came to them through Phila- 
delphia. Fisk and Hatch, Livermore, Clews and Com- 
pany and Vermilye and Company, Mr. Cooke's leading 
agents in New York City, said little about the principal 
whom they so long and so loyally served. But in the 
West the agents were glad publicly to acknowledge that 
they were tributary to Philadelphia. The people in- 
stantly recognized the name of Jay Cooke and looked 
upon him as a financial leader of wisdom and integrity 
whose advice they could follow with confidence. 

One of the most effective as well as one of the earliest 
of Mr. Cooke's newspaper broadsides was a kind of 
farmer's and mechanic's catechism, entitled "The Best 
Way to Put Money Out at Interest," afterward re- 
printed as " Interesting Correspondence on the 5-20 
Loan." The idea was Jay Cooke's and it delighted Mr. 
Chase and Henry Cooke who carried it to the Secretary. 
The latter made a few changes in the figures in the con- 
servative interest and it seems to have appeared first in 
the Philadelphia Public Ledger on March 27, 1863, be- 
ing sent out with the authority of that journal to be 

Office of JAY COOKE, 

At Jay Cooke & Go. B 


114 South. Third Street, 

Pfiiladclphia, Nov. 1, 1862. 

The undenigiied, having been appointed SUBSCRIPTION AGENT by the. 
SECRETARY of thb TREASURY, is now prepared to furnish, at once, the 


of the UNITED STATES, designated as *> FIVE-TWENTIES," redeemable at tha 
pWasnre of the ^Ooremmcnt, after fire years, and autliorixt^ by Act of Congress 
approved Feb. 25, 1SG2. 

The COUPON BONDS arc issu«>d in snms of 

$50, $100, $500, and $1000, 

Tlie REGISTERED BONDS in sums of 

$50, $100, $500, $1000, and $5000. 

Interest will commence from the DATE OF SUBSCRIPTIOI, and is FAYAILC M BOli, 

at the Mint, or any Sab-Treasury or Depository of the United States, on the first 
days of May and November of each year. At the present prbmiux ov oold, these 
Bonds yield about EIGHT per cent, per annum. Tlie ample provision made by 
Customs Duties, Excise Stamps and Internal Revenue, for the payment of Interest 
and liquidation of the Principal, makes an investment in this Loan safe, profitable 
and available at all times.^ In a word, this being the permanent Loan Into which 
the Legal Tender Notes are^convertible, it will become the PRINCIPAL LOAN In 
the market, and a profitable mode of investment for Trust Funds, the surplus funds 
of capitalists, as well as the earnings of the industrial classes. 

Subscriptions received at PAR in Legal Tender Notes, or notes «nd disoks of 
banks at par in Philadelphia. Subscribers by mail will receive prompt attantloo, 
snd evory facility and explanation will be aflTordcd on application at this ofloe. 

A full supply of BONDS will be kept on hand for immediate dellveiy 


Snhseripiimn •# jrcnf • 



iOffiee pon Son ^oote, 

hd lag SoqI^ IbSa. ^an|i^^$, 

9t9. 114 ®ub iOtitte ®ttaie, 

9^irat)rlf>^ia, ten 1. 9?oo. 1862. 

tnVintait%^nttt,wnbm(B^ai^amt0'<Btixttax ale ®u(fcrtptioii0 
Kg ml rmannt tf^ left brrrtf o^nr $rr)iig bir 

Irnm <Biiia8jtg |al)r O|ir03riitigrii |loiii»5 

Ux 9)ereutt0teii ^taattn au^mtUn, bir old bte ,,96iif • Stoanjiget'' 
brific^nrt toerbnt, inbem fir na^ brm (SkfaOrn ber dtrdtrrung na^ funf 3a^mt rin9flj>f^ 
»rrbrn fonnrn. Vit Unifier ij^ auforijirt bur^ rincn ^ft bre (Songrrf, ber am 25»m 
Srbruar 1662 unter^rtc^nrt irurbf. 

X)ir ®pu|IOtl Ootlbd iDrrbrn ou^grdrBen in 6umntrn ton 

$50, $100, $500, ""^ $1000. 

Xiit 9le(|i1lt{tten $Bpnb« in ©ummtn von 

$50, $100, $500, $1000 un^ 5000. 

Tit dntrrrffrn brginnrn »oin Xa^t bet ®ubfcrt)>ttoit unb finb ^aWhat in 
Ovlb tn brr V^unit, obrr irgrnb rinrm Untcr-i^c^A^Amt obcr Depofitonum brr IBerri' 
niStrn ^taatrn, am erPrit ^agr M Vlai obcr 9?ovrmbrr jrbrn 3a||rre. 3u brr grgrii' 
»artigrn (Bolb-yramtr flcbrn birfr 9onbd ai^t ^^o^rnt ptx 3a^r. Dtr autfrrtc^rnbrn 
Scrfrl^rungnt, tDrlc^r burc^ 3^^^ ®frm)>r(grfr0f, unb innrrr 9{rvrnum ^ttxofltn |tnt 
f&r 3A^Iung brr 3inrrn unb SImortifah'on M Qapitalt, mad^tn tint ffapitalanlagr in birfrr 
Vnlrit^r ftc^rr, unb vortt^rilfyaft, unb birfrlbr fAnn }u jrbrr ^tit Ui^t rralifirt torrbrn. 
Vlit rinrm SBort, ba tirfrtf bir pmnanrntr 9(nlri()r i^, in torlc^r bir **Lega1 Tender'* 
9}otrn ronvrrtirt tvrrbm fiinnrn, fo mirb ti balb bir ^aiit>tattletfie im ViaxUt \tix^, 
bir rinr vort(>ril(aftr QJrlrgrn^rit barbirfft **Trust Funds'*, unbrf((^aftidtrd Srrmogrn von 
({apitalif^rn, unb bir C^rfiKirniffr brr inbuftrirUrn (SlaiTm anjulrgrn. 

(SubfcripHonrn mrrbrn angrnommrn jum 9^cnnti>crtft in ''Legal Tender" 9Io' 
ten, obrr 9}otrn unb (IM^ von Sanfrn bir "pmi" f^r^rn in ^^ilabrlp^ia. (^ubfmV 
tionrn prr 9)ofl lorrbrn piinhlicb brforat unb Mt bir {i(b an birfr JDfficr mrnbrn, rrl^altcn 
(ebr grtoiinfcbtr 9(udfunfr. 

({in ^orrat^ von 9 o n b ^ toirb \iti€ an ^anb grj^altrn ^ur fofortigrn ^bliifrrung. 

Siibfcriptioiid Vlficnt 


5-20 AGENCY 


copied in all parts of the country. It was afterward 
printed as a circular of which there were two or three 
different editions. After some preliminary remarks de- 
scriptive of a visit to the agency in Third Street the 
paper took the form of twelve questions supposed to 
have been propounded by a farmer in Berks County, 
Pa., which were answered lucidly by Jay Cooke. It 
read as follows : 


[From the Philadelphia Ledger, March 28.] 

One of the most surprising things in the recent conversion 
of greenback notes into the popular Five-Twenty six per cent. 
Government loan at par, is the universality of the call. We hap- 
pened in yesterday, at the office of Jay Cooke, who is the agent 
for the sale of these loans, and the conversion of the greenbacks, 
and found his table literally covered with orders and accompany- 
ing drafts for almost all amounts, from five thousand to a hun- 
dred thousand dollars each, and from all parts of the Union. 
The little States of Delaware and New Jersey are free takers, as 
are also Pennsylvania, New York and the New England States. 
But the West is most especially an active taker, as well through 
her banks as by individuals. The amount of orders lying before 
us, all received during the day, amounted to over fifteen hundred 
thousand dollars. With this spontaneous proffer of money. 
Secretary Chase must feel himself entirely at ease, and will take 
care to put himself beyond those money sharpers, whose chief 
study is how to profit themselves most from the troubles of the 
country and the necessities of the Treasury. There are millions 
of dollars lying idle all over the country, and while the uncer- 
tainty existed as to what Congress would do, and the bullion 
brokers were successful in running up gold to the discredit of 
the Government issues, this capital was clutched close. But as 
the policy and measures of the Secretary of the Treasury are 
gradually developed, confidence in the Government and in the 
future is strengthened, and holders are now anxious to make 


their long unemployed means productive — hence the ready and 
liberal investment in the Five-Twenty loans at par. Almost 
every town and village throughout the country has individual 
holders of money, to larger amounts probably than ever before 
at one time, for which satisfactory takers cannot be found. Many 
of those are now investors in these loans, and the number of 
such is likely to increase, until the demand shall put all the Gov- 
ernment loans on a par with, at least, the loans of the various 
incorporated companies. The country banks are also free takers 
for themselves and their customers. On the ist of July this Five- 
Twenty Year loan will, under the law, be withdrawn. 

,Berks County, Pa., March 20, 1863. 

Jay Cooke, Esq., 

United States Loan Agent. 

114 South Third Street, Philadelphia. 

Dear Sir: — I see by our papers that you are selling! for the 
Government a new Loan called " Five-Twenties." I expect to 
have shortly a few thousand dollars to spare, and as I have made 
up my mind that the Government Loans are safe and good, and 
that it is my duty and interest, at this time, to put my money 
into them in preference over any other loans or stocks, I write 
to get information of you as follows : 

1st. Why are they called "Five-Twenties?" 

2nd. Do you take country money, or only Legal Tender Notes, 
or will a check on Philadelphia or New York, answer for sub- 
scriptions ? 

3d. Do you sell the Bonds at Par? 

4th. As I cannot come to Philadelphia, how am I to get the 

5th. What interest do they pay, and how and when and where 
is it paid, and is it paid in Gold or Legal Tenders? 

6th. How does Secretary Chase get enough Gold to pay this 
Interest ? 

7th. Will the face of the Bonds be paid in Gold when due? 

8th. Can I have the Bonds payable to Bearer with Coupons, 
or registered and payable to my order? 

9th. What sizes are the bonds? 


lOth. Will I have to pay the same tax on them as I now pay 
OD my Railroad, or other Bonds? 

nth. What is the present debt of the Government, and what 
amount is it likely to reach if the Rebellion should last a year 
or two longer? 

12th, Will Secretary Chase get enough from Custom House 
duties and Internal Revenue, Income Taxes, &c., &c., to make it 
certain that he can pay the Interest punctually ? 

I have no doubt that a good many of my neighbors would like 
to take these Bonds, and if you will answer my questions I will 
show the letter to them. 

Very Respectfully, 
S M F . 

OMce of Jay Cooke, Subscription Agent o/l 
OMce of Jay Cooke & Co., Bankers, J 

114 S. Third St. 
Philadelphia, March 23, 1863. 
Dear Sir: 

Your letter of the 20th inst. is received, and I will cheerfully 
give you the information desired by answering your questions in 
due order. 

1st. These. Bonds are called "Five-Twenties" because, while 
they are twenty year Bonds they may be redeemed by the Govern- 
ment in GOLD at any time after five years. Many people sup- 
pose, that the Interest is only 5.20 per cent. 

2nd. Legal Tender notes or checks upon Philadelphia or New 
York that will bring Legal Tenders, are what the Secretary 
allows me to receive. No doubt your nearest Bank will give 
you a check or Legal Tenders for your country funds. 

3d. The Bonds are sold at Par, the Interest to commence the 
day you pay the money. 

4th. I have made arrangements with your nearest Bank or 
Banker, who will generally have the Bonds on hand. If not, 
you can send the money to me by Express, and I will send back 
the Bonds free of cost. 

5th. The Bonds pay Six per cent., Interest in Gold, three per 
cent every six months, on the first day of May and November at 


the Mint in Philadelphia, or at any Sub-Treasury in New York 
or elsewhere. If you have Coupon Bonds, all you have to do 
is to cut the proper Coupon each six months, and collect it your- 
self or give it to Bank for Collection. If you have Registered 
Bonds, you can give your Bank a power of attorney to collect the 
interest for you. 

6th. The duties on imports of all articles from abroad must 
be paid in Gold, and this is the way Secretary Chase gets his 
gold. It is now being paid into the Treasury at the rate of Two 
Hundred Thousand Dollars each day, which is twice as much as 
he needs to pay the Interest in Gold. 

7th. Congress has provided that the Bonds shall be Paid in 
Gold when due. 

8th. You can have either Coupon Bonds payable to the Bearer, 
or Registered Bonds payable to your order. 

9th. The former are in 50's, loo's, 500's, and looo's, — the lat- 
ter in same amounts, also $5000 and $10,000. 

loth. No! You will not have to pay any taxes on these Bonds 
if your income from them does not exceed $600 ; and on all above 
$600 you will only have to pay one-half as much Income Tax 
as if your money was invested in Mortgages or other Securities. 
I consider the Government Bonds as first of all — all other 
Bonds are taxed one-quarter per cent, to pay the Interest on the 
Government Bonds, and the Supreme Court of the United States 
has just decided that no State, or City, or County can tax Gov- 
ernment Bonds. 

nth. The present bonded debt of the United States is less 
than Three Hundred Millions including the seven and three- 
tenths Treasury Notes; but the Government owes enough more 
in the shape of Legal Tenders, Deposits in the Sub-Treasuries, 
Certificates of Indebtedness, &c., to increase the debt to about 
eight or nine hundred millions. Secretary Chase has calculated 
that the debt may reach one thousand seven hundred millions, 
if the Rebellion lasts eighteen months longer. It is, however, 
believed now that it will not last six months longer ; but even if 
it does, our National Debt will be small compared with that of 
Great Britain or France, whilst our resources are vastly greater. 


1 2th. I have no doubt that the revenue will not only be ample 
to pay the ordinary expenses of the Government and all Interest 
on the debt, but leave at least one hundred millions annually 
toward paying off the debt, and that the Government will be able 
to get out of debt again as it was twice before — in a few years 
after the close of the war. 

I hope that all who have idle money will at once purchase these 
Five Twenty Year Bonds. The right to demand them for Legal 
Tenders will end on the first day of July, 1863, as per the follow- 
ing authorized notice : 


On and after JULY ist, 1863, the privilege of converting the 
TIONAL SIX PER CENT LOAN (commonly called " Five- 
Twenties ") will cease. 

All who wish to invest in the Five-Twenty Loan must, there- 
fore, apply before the ist of JULY next. 

Jay Cooke, Subscription Agent, 
No. 114 S. Third Street, Philadelphia. 

Those who neglect these Six per cent. Bonds, the Interest 
and Principal of which they will get in Gold, may have occasion 
to regret it. I am, very truly, your friend. 

Jay Cooke, 
Subscription Agent, 
At Office of Jay Cooke & Co., 
No. 114 S. Third St., Philadelphia. 
The Banks and Bankers of your and adjoining Counties will 
keep a supply of these Bonds on hand, if you prefer to go there 
and get them. 

In all parts of the country the newspapers were com- 
mending Secretary Chase and Jay Cooke for their finan- 
cial sagacity, advising the people to invest in the loan, 
recording the amount daily received from subscriptions 



and like the managers of Patti and Jenny Lind, vocif- 
erously reiterating that the last chance to see, hear and 
get so much for so little money was near at hand. 
Another newspaper article distributed by Jay Cooke's 
writers and published very widely was entitled, "A Day 
at the Agency for the Five-Twenty Loan." It read as 
follows : * 

It would rejoice the heart of every patriot if he could wit- 
ness in person the daily operations at the agency of the national 
loan in this city. The people are there to give aid and comfort to 
the government by investing their savings and their capital in the 
Five-Twenty bonds. They are giving lively exercise to the agent 
and his clerks, bookkeepers and cashiers. None of the latter are 
likely to get rusty for want of action. There they sit at their 
desks each one the focal point of converging streams of orders 
for the loan. There they sit amidst piles of orders by mail, 
flights of orders by telegraph and incessant orders by word of 
mouth. The figures and amounts overheard by the visitor as 
he stands at one of these desks run through nearly the whole 
scale of arithmetical enumeration — hundreds, thousands, tens of 
thousands, hundreds of thousands, millions. 

Here is a letter from a lady in Camden who orders $300 and 
there is one from St. Paul, Minn., for $12,500. Here lies one 
from Pottsville, Pa., for $1,000 and another from Pittsburg for 
$75,000. Along comes a telegram from Norristown for $250 
and close upon the messenger's heels comes another with a 
despatch from New York for $250,000. Near one of the desks 
is a nursery maid who wants a bond for $50 and just behind 
her placidly waiting his turn is a portly gentleman, one of the 
" solid men " of Philadelphia, at whom you can scarcely look 
without having visions of plethoric pocketbooks and heavy bal- 
ances in bank. He wants $25,000. And so the g^eat current of 
orders constantly streams in, the letters accumulating on the 
desks in quires, the telegraph messengers always hurrying to and 

^ Philadelphia Inquirer, April 9, 1863. 


fro and our city people passing in and out from the counters in 
never ending procession. 

In the midst of all this may be seen the agent of the govern- 
ment receiving visitors, answering questions, giving directions 
and pencil in hand footing up the enormous aggregates. Before 
him you see a certificate of deposit into the Treasury made previ- 
ous to twelve o'clock for a quarter of a million, and close by 
are two of his trusty aids making up a third package of $400,000, 
swelling the amount of Treasury deposits for the day to eleven 
hundred and fifty thousand dollars. 

This is no fapcy sketch but a truthful description of real trans- 
actions as witnessed by the writer within the last twenty-four 
hours at the government agency, and the like of which might 
have been seen there by any one else at any time within the last 
two weeks. The truth is the scenes to be observed there nowa- 
days are so active and inspiring that there is no need whatever 
for exaggeration. The people are at last alive to the value of 
the investment which has been so long within their reach. What- 
ever misgivings they may have had in the dark days of the war 
have all passed away and they are now laying their treasure on 
the altar of their country with patriotic confidence and generous 

This article was followed by another circular, "An 
Hour at Jay Cooke and Co.'s/' which was generally dis- 
tributed to newspaper editors for use in their news 
columns. It was as follows : 

[From our own Correspondent.] 

Philadelphia, , 1863. 

The wisdom of Secretary Chase was never more shown than 
in the manner in which the 5.20 loan has been placed before 
the country. The extraordinary success attending the 7. 3/10 
loan led the Secretary of the Treasury to adopt a similar plan 
in placing before the public the 5.20 bonds. As doubtless many 
of your readers are ignorant of the meaning of the symbols 
" 5.20," notwithstanding the fact that they daily see such items 
in the newspapers as that " Jay Cooke, subscription agent, reports 


the sale of $1,200,000 5.20 bonds for yesterday," we will proceed 
to enlighten them by an extract from a letter of Mr. Cooke to a 
citizen of Berk's county, explaining the particulars of the loan : 

[Here follows the correspondence in the circular entitled " The 
Best Way to Put Money out at Interest."] 

Having given you an idea of the bonds, we will proceed 
to a description of the manner in which these securities are taken 
by the public. 

The principal office of Mr. Jay Cooke, the subscription agent, 
is in Philadelphia, with over one thousand five hundred cor- 
respondents in all of the principal cities and towns of the Union, 
who likewise receive subscriptions, and each of whom are re- 
sponsible to their own customers. 

At the Philadelphia office Mr. Cooke employs upwards of 
thirty clerks. 

Upon our first visit to the office we were shown through the 
banking department to the 5.20 offices, where we found Mr. 
Cooke surrounded by his assistants, doing a business of over a 
million of dollars per day. I propose to give a brief account of 
what I saw. 

It is now eleven o'clock in the morning. The clerk comes 
in with letters from the post office (large numbers have already 
been received, of which there are full one hundred in number, 
from all sections of the country where the old flag waves. These 
contain orders amounting from $50 to $100,000 each. They 
are placed on file, and as soon as the bonds are issued they are 
mailed to subscribers. But the most interesting feature is the 
personal subscriptions. An old lady totters into the office, and 
with her money tied up in the comer of her handkerchief, wishes 
one of the bonds. She is shown into the back room and given a 
seat. The assistant receives her money, gives her a certificate, 
and she leaves, happy in the thought that her little pittance is not 
only safe, but is earning her something. Next comes a hale old 
farmer from Berks county, with his $5,000. He has heard of the 
loan; some of his neighbors have invested; he has read Mr. 
Cooke's letter, and he has concluded to put his money where he 
is not only sure of his interest, but he is aiding the Government 


— a double reason — he asks a g^eat many questions, all of which 
are answered satisfactorily. The consequence of which is, he 
leaves his $5,000 and takes his certificate. 
Here conies a telegraphic dispatch from Boston : 

Jay Cooke, 

Subscription Agent, 

Philadelphia : 
Send us one hundred thousand assorted 5-20's. 

Spencer, Vh-a & Co. 

No sooner is this read and attended to, than another comes. 
Some idea may be formed when it is known that their telegraph 
bill amounts to over $40 per day. In fact, so rapidly has the 
loan been taken by the public that only $200,000,000 remain 
unsold. In taking a retrospective view of the state of the coun- 
try upon the accession of the present Administration, the diffi- 
culties with which Mr. Chase had to contend, the obstacles which 
met him at every turn, his bureau swarming with traitors, the 
Treasury depleted by the treachery, treason and robbery of his 
predecessors — with all the expenses of the Government to meet, 
and which were more in one month than ever before in nearly 
a whole year — the success attending his efforts is almost incon- 
ceivable. He has preserved our national credit — he has paid 
the expenses of the Government, and now he is receiving aid 
from the people at the rate of $2,000,000 and upwards per day. 
Another feature of Mr. Chase's policy is, that he has not asked 
any assistance from abroad. Knowing the loyalty of the people, 
he has appealed to them, with what success the $10,000,000 or 
$12,000,000 pouring weekly into the Treasury, will best answer. 

Little incidents in the experience of the agency, sug- 
gested to the writers by Jay Cooke, furnished the texts 
for articles which made the rounds of the newspapers, 
as the following: 

An encouraging feature is the fact that the demand for the 
loan is thoroughly awakened in sections of the country from 
which there has hitherto been no call for this class of investment. 
From Maryland the orders are steadily on the increase and for 


western Virginia and Kentucky sales have been very consid- 
erable. An order was received yesterday from Key West, Florida. 
A soldier in the Army of the Potomac sends to the Subscription 
Agent his surplus earnings with the remark, '' If I fight hard 
enough my bonds will be good." Another " brave defender " 
sends from Suffolk $500 to invest in 5-20S and says, '' I am 
much pleased with my purchase. I am willing to trust Uncle 
Sam; if he is not good nobody else is." While soldiers exhibit 
such a spirit there can be no such word as fail.^ 

Many people well informed upon other subjects have accus- 
tomed themselves to hoarding gold in various sums under the 
impression that it is a good investment. The utter folly of this 
is shown by the following calculation showing the difference in 
five years between hoarding gold and selling it and investing the 
proceeds. One thousand dollars in gold, if kept hoarded for- 
ever, will be only $1,000. Now if this amount of gold is sold at 
50 per cent, premium you will have $1,500 to invest in 5-20 six 
per cent, bonds. These will pay annually $90 in gold, making 
in five years $450 besides the compound interest ; and at the end 
of five years, if then paid, the holder will receive the $1,500 in 
gold. Thus the $1,000 will produce over $2,000. If not paid 
off in five years the bonds will sell at a handsome premium.* 

We invite the attention of our readers to the article in the 
reading columns entitled " The Best Way to Put Money out at 
Interest," which is well worth the perusal of everybody, as it fully 
explains how to make the safest and most profitable investments. 
Some of our neighbors who some time since went into this are 
now realizing good profits. For instance, a certain party in our 
town in the latter part of April, 1862, purchased a certificate of 
indebtedness of $1,000 for 98 per cent, or for $980 and on the 
20th of March last sold the same to Jay Cooke and Company of 
Philadelphia for $1,080.20, thus making $100.20 on his invest- 
ment, which is about 11 per cent. We would advise all persons 
who have money to put out at interest to avail themselves of this 

iPhila. Press, April 28, 1863. «"A Word to Gold Hoarders," Phila. 
Bulletin, April 8, 1863. ^ Shippensburg News, April 11, 1863. 


Senator Wright, in a late speech inculcating the duty of loyalty 
to our government, said that when in Paris last July he saw three 
or four acres of old men and women of all classes waiting to 
contribute to the demand of government for two or three hun- 
dred million of francs. This was for the support of a despotic 
government that may be changed any day. Are we less patriotic 
than the French? Our administration wants money to perpetu- 
ate the best government that the world ever saw, and asks us to 
loan it money at six per cent, per annum payable semi-annually 
in gold. And there is offered as security for the loan the faith 
of the government with all she possesses and expects to possess. 
The people of the east are investing in this fund at the rate of 
millions a day, showing that their faith wavers not in the stability 
of the republic. Never was there a time when there was so 
much money in Blair county seeking investment as at present. 
Here is a rare chance to show our loyalty, and profit ourselves. 
That the government is to be sustained at all hazards is a fore- 
gone conclusion. Then come on with your spare cash and help 
her to give rebellion the finishing stroke and restore the country 
to her former quiet and prosperity. The agents are men of 
responsibility, thoroughly acquainted with the business and will 
give all information necessary on the subject.^ 

Last week, in the midst of all the discouragement consequent 
upon the reverse at Chancellorsville, and the retreat of Hooker's 
army, no less than eight millions were subscribed. What a lesson 
this affords to the poor, weak-minded mortals who send gold up 
or down to suit every breath of report, or rumor blowing from 
any quarter. There are those who would make gold the barom- 
eter, but it seems that after all it indicates nothing, and is 
therefore no barometer. The national credit stands firmer and 
better now than it ever did before. Reverses make no change 
in the popular faith which remains unshaken and true to the im- 
mortal destiny of the republic.^ 

The war is not only developing heroism and devotion to the 
national cause in the field, but there are instances of spirit and 

1 Hollidaysburg Register, March 25, 1863. 

^ North American and United States Gazette, May li, 1863. 


generosity at home, one of which came under our notice this 
morning. A gentleman whose countenance indicated character 
in no ordinary degree appeared at the office of Jay Cooke, Sub- 
scription Agent, and handed Mr. Cooke $660 " for the govern- 
ment." Supposing, naturally, that he wanted Five Twenty loan, 
$10 were returned him, as only multiples of $50 are received. A 
minute's explanation ensued in which the gentleman in Jackson 
style declined to give his name and wanted to have the $660 
sent as a donation to the government. A letter was accordingly 
written and sent to Secretary Chase, asking that it be used by 
the United States without any receipt, bond or return except the 
satisfaction of having done his duty. The most singular part 
of the whole matter is that when the letter was presented for 
signature with a dash of good humor he signed it " A War 
Democrat," and left for the post office with the letter which will 
doubtless be publicly acknowledged.^ 

The acknowledgment came soon. It was as follows: 

^ ^. , Treasury Department, June 2, 1863. 

I received a letter to-day enclosing the check of Jay Cooke 
and Company of Philadelphia on Jay Cooke and Company of 
Washington for $660 which the writer offers to the United 
States " as a slight token of his appreciation of the value of the 
government and as a personal contribution without any other 
return than the satisfaction of doing his duty towards its success 
against the rebellion." 

The letter is signed " A War Democrat," and I have no clue 
whatever to the real name of the writer. The designation, how- 
ever, is enough. It marks him as one of that great multitude of 
Democrats who believe that Democracy is best proved by sus- 
taining those temporarily entrusted with the administration of 
affairs in their efforts to maintain democratic institutions and 
popular government against the attempt to establish a slave-hold- 
ing oligarchy on the ruins of the American Union. Among such 
Democrats any man may be proud to enroll himself. 

The contribution of the " War Democrat " of Philadelphia has 

1 Phila. Evening Bulletin, June i, 1863. 


been placed in the Treasury. May the acts of such patriots at 
home, and the heroic deeds of our brave soldiers and sailors on 
land and sea, inspire in all exercising public functions the liveliest 
sense of obligation to exert every faculty and every energy for 
the speediest possible termination of the war by the most eco- 
nomical and the most vigorous employment of all the vast re- 
sources of men and money, so liberally furnished by a generous 
and patriotic people. 

Yours very truly, 

S. P. Chase, 
Jay Cooke, Esq., Secretary of the Treasury. 

Subscription Agent, Philadelphia. 

Mr. Cooke's travelling agents for the sale of the 
5-20 loan, according to a memorandum of his own on 
the subject found among his papers, were nine in num- 
ber — George A. Bassett for Indiana; Henry C. Storms 
and W. B. Hubbard for Ohio; C. J. Bradford for Penn- 
sylvania; Thomas F. Shewell for Illinois; William 
Poulterer for Michigan; F. T. Loes and Paul Jagode 
for Wisconsin, and Silas Yerkes, Jr., for Iowa, Missouri 
and Minnesota. These agents were constantly in mo- 
tion, travelling hither and thither, conferring with bank- 
ers, brokers and editors in the interest of the loan, 
distributing circulars and posting bills at public places — 
hotels, railroad stations, court houses, post offices, read- 
ing rooms — and upon walls, telegraph poles and the 
trunks of trees. They urged at Jay Cooke's direction 
the desirability of having *'our own people own the na- 
tional debt," and sensibly increased the orders for bonds. 
They reported their movements to the Subscription 
Agent but he enjoined them to write him short letters. 
By their works rather than by their words would he 
know them, honor them and reward them. 


The effort to sell the bonds was confined to no neigh- 
borhood or class of citizens, and many subscriptions 
were secured in the localities which in the parlance of 
the day were Copperhead or even openly "Secesh." 
Much was made of the fact that up to May 8th more 
than one and a half millions were subscribed in Balti- 
more ^ where Mr. Cooke had an active press agent, John 
Wills. A newspaper in that city said: "The one im- 
portant idea seems to be forcing its truth upon the people 
and that is if the government loans are not safe and 
good no others can be. When the nation goes down all 
else sinks with it. If the ocean dries up ships are no 
longer of use for there is nothing upon which they can 
float." * The subscriptions from Kentucky were widely 
heralded, one order "covering $350,000 in gold, which 
at the present premium, will buy one-half a million of 
the loan." William T. Page of the Canal Bank of 
Evansville, Ind., wrote in August, 1863, saying that he 
had sent a bag of gold to be sold and invested in 5-20 
bonds. "This amount, $10,400," he wrote, "is from a 
Copperhead neighborhood and I doubt if a single per- 
son who subscribes for the bonds ever had a real Union 
pulsation of the heart since the rebellion broke out." 

After the capture of New Orleans, Jay Cooke made 
an effort to develop a trade in 5-20S in that city with 
the army and army followers, if not with the native 
Louisianians. In Washington it was remarked that "a 
very large proportion of the office sales were made to 
officers and soldiers." 

B. S. Russell, a banker of Towanda, Pa., a friend of 

1 Baltimore American, May gth. 
« Balto. Clipper, May 12, 1863. 


Jay Cooke, wrote him that the politicians there would 
not take the war loans. David Wilmot, from whom 
much was expected, on account of his prominence in 
the slavery discussion, not only would not subscribe for 
himself, Mr. Russell complained, but discouraged the in- 
vestment in the hearing of other men. The bonds were 
being sold, as Jay Cooke anticipated, if sold they should 
be, to the rank and file of the people, — the class of citi- 
zens not too famous or too wise in whose veins the blood 
of the country coursed red and warm, and who bore 
the great financial burdens of the war as they bore the 
weight of the knapsack and the musket upon the battle- 

Mr. Cooke's arrangements now enabled him to reach 
out into every nook and corner of the country to obtain 
the money of the man or woman who perhaps had but 
$50 or $100 to invest, but who had a patriotic heart 
and was ready to contribute his or her mite to the gov- 
ernment. "Money is the great power in war and will 
conquer at last,'' wrote a faithful editor, "and he who 
contributes his money to aid his country in her hour of 
danger may thereby evince as much patriotism as he 
who marches to the battle field. The widow's two mites 
told more of goodness of heart than the rich gifts of 
those who cast in only of their abundance." * 

The newspapers in hamlets and villages, especially in 
the western states, called to the support of the govern- 
ment the farmers who emptied their stockings and 
brought forth the store from under the rafters, spread- 
ing it out in little counting houses to be forwarded to 
Mr. Cooke in Philadelphia for use by the government 

» Daily Evening News, St. Louis, May 19, 1863. 


in terminating the rebellion. The Subscription Agent 
gave them another broadside. This appeal was as fol- 


You have a solemn duty to perform to your government and to 
posterity ! 

Our gallant army and navy must be supported by every man 
and woman who has any means, large or small, at their control, 
The United States Government, to which we owe our prosperity 
as a nation, security of person and property of every sort, calls 
on each individual to rally to its support — not with donations 
or gifts — though who could withhold them — but with 
si:bscriptions to her loans, based on the best security 
in the world, the untold and scarcely yet tried resources of this 
mighty Continent, which were developing rapidly when the re- 
bellion broke out, and to maintain which, as a priceless her- 
itage TO POSTERITY, this defence against rebellion is made. 

There is no miscalculation, and can be no failure — the cost 
has been counted, and the burthen will be light to us, and gladly 
borne by posterity. What our Revolutionary Fathers are to us, 
WE will be to coming generations, if we fail not in our plain 
and simple duty ! 

The owner of every foot of ground, of every house and work- 
shop, owes a debt of service in the field, or of his means in this 
noble work I 

Talk not of Taxes! they secure the Loans. Take the 
Loans! and the Taxes will fall more lightly — and they supply 
the ready, present and required means to strike the death blow at 
rebellion and the foul dist«rbers of the Nation's peace! 

Talk not of Rulers! They are the ministers of god! who 
rules the world and the destiny of this mighty Nation! Our 
first duty is to God — our next to bur country — fail not of 
either ! 

Your nearest patriotic Bank or Banker will supply this loan, 
on which so much depends ! 

See advertisement on first page. The Bonds are now ready for 


delivery at the office of Jay Cooke & Co., Bankers, No. 114 
S. 3d St., Philadelphia, Pa. 

More useful perhaps than any of its other services 
was the newspaper's publication of the total sum of 
popular subscriptions to the loan day by day. In so 
great a transaction it was impossible to record the names 
of all the individual takers of the bonds, as Mr. Cooke 
had done in Philadelphia in 1861 when he was the agent 
in a limited district for the disposition of the 7-30S, but 
space could be found for the totals for states, cities and 
neighborhoods, and the aggregate footings were ea- 
gerly scanned, inspiring the hesitant to follow the good 
example of other men. At the end of March, 1863, sub- 
scriptions were being received at the rate of about one 
million dollars daily, and they were expected soon to 
reach $1,250,000^ which they promptly did. Up to 
April loth it was announced that Jay Cooke had sold 
nearly $25,000,000 of this loan. For the week ending 
April 25th the subscriptions were as follows: 

Monday, April 20 $1,311,000 

Tuesday, April 21 1,825,350 

Wednesday, April 22 2,243,700 

Thursday, April 2}^ 1,218,350 

Friday, April 24 1,073,700 

Saturday, April 25 2,475,000 


On May ist there was an extraordinary pressure for 
bonds. The interest being payable semi-annually, on 
that day, and on November ist, a desire was shown to 
obtain "even coupons.'' Upwards of 5,000 persons, the 

^Inquirer, March 29, 1863. 


names of farmers and mechanics being side by side with 
bankers, capitaHsts, members of the cabinet and con- 
gressmen, ordered through Jay Cooke upon that day, 
their subscriptions aggregating more than five millions 
of dollars. 

For some time after May ist, not xmnaturally, the sub- 
scriptions were made at a diminished rate. The efTorts 
of that day were exhausting . On May 7th Mr. Cooke 
announced that he had received subscriptions to the 
amount of $700,000, distributed geographically as fol- 
lows : ^ 

Philadelphia and Pennsylvania $286,000 

Ohio 174,000 

Baltimore and Maryland 1 14,000 

Providence, R. 1 78,000 

Illinois 17,000 

New Jersey 13,000 

Kentucky 1 1,000 

Indiana and Western States 7,000 


The next day, May 8th, the subscriptions rose above 
$1,000,000 as follows: 

New York $300,000 

Boston 250,000 

Philadelphia 105,000 

Pennsylvania 66,000 

Ohio 126,000 

Kentucky 100,000 

Michigan 50,000 

Baltimore and Maryland 35,ooo 

Other states 10,000 

^ Phila. Inquirer, May 8, 1863. 


On May loth, Mr. Cooke announced that his sales of 
bonds since the establishment of the agency had reached 
a total of $68,932,150. 

The subscriptions were not long in resuming their 
April rate and soon indeed attained a still higher level. 
At least a dozen days in May yielded more than two 
millions of dollars each. Subscriptions were taken ag- 
gregating about $12,000,000 a week. The month closed 
as follows: 

May 20 .2,159,050 

May 21 2,006400 

May 22 2492,600 

May 23 2,307,750 

May 25 2,285,800 

May 26 2,929,000 

May 27 2,329,000 

May 28 2,058,750 

May 29 1,640450 

May 30 1,309,600 

Mr. Chase, as he freely admitted, had been unable to 
sell the 5-20S in any market, although he had made the 
effort to do so for several months. In the autumn of 
1862 he found that he could probably obtain 97 or 98 
cents for a block of $50,000,000 with a prospect of lower 
prices for additional issues. Jay Cooke proposed the 
sale at par. He had been paid the one-half of one per 
cent, definitely promised him for his services, com- 
missions of sub-agents and advertising expenses in con- 
nection with the first $10,000,000, but it was impossible 
to persuade the Secretary to agree to the payment of 
three-eighths upon later amounts. In vain was he told 
that Mr. Cooke could not hold his sub-agents and pay 
his necessary expenses for a smaller allowance. It was 


by offering liberal rates of compensation — at least one- 
eighth — to those who sold the bonds and the generous 
treatment of the newspapers — one-eighth more for the 
expenses of advertising, transportation, travelling 
agents, telegrams, etc. — that he was enabled to achieve 
his success as a popular loan agent. There seemed then 
little unfairness in the claim of a third eighth for his 
own services. He was freely using the one-eighth 
which should have been his and, with a daring which no 
other man would have shown, — believing in a righteous 
determination in the end, — continued to offer the loan, 
even drawing largely upon his private fortune to meet 
the costs of the operation, while Chase with inconceiva- 
ble pertinacity refused to make a definite written con- 
tract, and for nearly a year kept the agent in a state of 
uncertainty and suspense. Jay Cooke and his brother 
Henry thought that they had secured a verbal promise 
of three-eighths from Mr. Chase when, frightened by the 
large subscriptions in May, he attempted to make a dif- 
ferent arrangement. Cooke's sub-agents (so the Secre- 
tary was told) were boasting that they got one-fourth 
instead of one-eighth for their services, lumping the 
commission and the allowance for advertising expenses, 
and the Secretary insisted that in future they must un- 
derstand the relationship and furnish vouchers to cover 
their advertising accounts. Mr. Cisco in New York 
complained that Mr. Cooke's men were allowing a dis- 
count of one-eighth to the public, and they in turn found 
fault with Mr. Chase who had authorized the assistant 
treasurers to offer one-eighth to buyers of bonds. The 
difficulties arising from this source served but to in- 
crease the unpleasantness. 


The sales of the 

United States SIX per cent. Loan, 


have amounted for many weeks past to 

over Two Millions of Dollars daily. 

The First of July 

is rapidly approaching, when the public will no longer have the 
right to Subscribe at Par for this desirable Loan, the principal 
and interest of which is payable IN GOLD. 

All parties contemplating investing in these Six per eent. 
Bonds, shonld at once forward their money through any of the looftl 
agentiee, or direct, to 


Subscription Agent. 

114 South Third Sbwl. Philad'«. 




On June i, 1863, Mr. Qiase intervened in a way 
which most disastrously affected the course of the loan. 
He was determined at once to fix the allowance at one- 
fourth. It required the diligent labors of Henry Cooke 
to prevent the consummation even on all sales above the 
$10,000,000, and it was only on urgent representations 
that the commissions had already been paid to the sub- 
agents, that Mr. Chase was induced to limit his demands 
to sales made after June ist.* Moreover, he repeated 
that for the one-eighth paid for advertisements and dis- 
tribution he must have the vouchers from Mr. Cooke. 
He telegraphed as follows: 

From this date, June ist, inclusive, your compensation as 
agent including compensation of sub-agents will be one-eighth 
of one per cent, and actual expenses of advertising and trans- 

The Secretary added by letter under the same date: 

I prize very highly indeed your services to the Department 
and have no disposition to reduce the compensation either of 
yourself or your agents below what is just and liberal. On the 
other hand I have a duty to the country to perform which for- 
bids me to pay rates which will not be approved by all right- 
minded men ; and I cannot think that now, when your past serv- 
ices must have been fully compensated and when the necessity 
for extensive advertising must be greatly reduced and the amount 
of subscriptions so largely increased that a very low rate will 
afford you a larger remuneration than a very high rate formerly, 
the original compensation should be continued. 

Mr. Chase could retain his composure under attack 
less easily than any public man of his time both because 
of his constitutional peculiarities and his political am- 

1 Letter of Fahnestock to Jay Cooke, June i, 1863. 
• MSS. in Treasury Department. 


bitions. On December 22^ 1862, Charles R. Train, a 
Representative from Massachusetts, moved in the House 
for an investigation of the affairs of the Treasury De- 
partment : 

Resolved that a select committee of five be appointed to in- 
quire whether any officer or employee in any Department of the 
government is a partner, or interested directly or indirectly in 
any banking house, money corporation, or other business firm 
having contracts with the government, or dealing in stocks or 
other property ; and that said committee have power to send for 
persons and papers and to employ a stenographic clerk at the 
rate of compensation usually paid to such an officer; and that 
said committee have authority to report at any time by bill or 

It was a thrust aimed at Jay Cooke, the introducer of 
the resolution, being as Henry Cooke said *'the mere 
instrument of some jealous or disaffected parties." Mr. 
Chase had betrayed much sensitiveness to this, the 
earliest of the Congressional attacks upon his adminis- 
tration, although nothing at all came of it. It did not 
even have the advantage, which Henry D. Cooke prophe- 
sied for it, of freeing Mr. Chase and Jay Cooke and 
Company "in all future time from the repetition of the 
charges and innuendoes which have been proven to be 

In May, 1863, when the subscriptions were so large 
and the loan was progressing so handsomely the as- 
saults were renewed. Several newspapers joined in 
the movement. The New York World which Mr. 
Cooke had not yet learned how to conciliate, virulent in 
its attacks upon him, his house and the entire Union 
cause, said: 

^ Globe, p. 167. 


What may be the motive of Messrs. Jay Cooke and Company in 
thus ostentatiously parading the name of their house in connect- 
ion with a " great national loan " we do not know. Nor do we 
care to inquire what induced the Secretary of the Treasury to 
give to this house a monopoly of the five-twenty funding business 
instead of doing the business by accredited assistant treasurers 
in the different cities. That will be a useful matter for inquiry 
at another time. If, however, Jay Cooke and Company receive 
from the government one-half of one per centum on all the notes 
funded we can readily see a powerful motive for that house to 
procure as large a sum to be converted into bonds as possible. 
And a good accountant in that case could easily compute from 
the telegraphic announcements the weekly profits of this favored 
house. Whether firms in Washington or New York quite as re- 
sponsible as Messrs. Jay Cooke and Company would have done 
the same business for a much less percentage others are compe- 
tent to say. It is not easy to see why more should be allowed to 
bankers for selling government bonds than to auctioneers for 
selling government prize ships. 

But our people seem to delight in being cheated. The serenity 
with which they swallow the false statements of the success of 
our arms ; the puffs of upstart generals manufactured to order ; 
the success of the Mexicans; the success of the Poles not less 
than the repudiations and cunning contrivances of the Treasury 
Department leave little doubt that the luxury of being humbugged 
is only equalled by that of being imprisoned without law, wasted 
by war, and impoverished by taxes. ^ 

Such demonstrations gave the Secretary of the Treas- 
ury much uneasiness. He visited New^ York and New 
England. To many, now that the bonds seemed to be 
selling themselves at the rate of more than $2,000,000 
a day, the task looked very simple and Mr. Chase was 
besought to put an end to the "monopoly." 

In creating the special outside agency, he reserved 

1 May 20, 1863. 


the right to dispose of the five-twenties through the 
assistant treasurers, so that he was scarcely guilty of 
creating the odious exclusive privilege conjured up 
and charged to his account by the Copperheads, to his 
very great discomfiture. Although Mr. Cooke by his 
single-handed efforts made the market for the bonds, 
wherever they were sold, no commissions were allowed 
the Subscription Agent upon sales eflfected by the as- 
sistant treasurers over whose operations he had no con- 

Mr. Chase was encouraged to draw the reins upon 
Mr. Cooke not only by the attacks of certain New York 
newspapers, but also by John J. Cisco and a group of 
bankers who revolved about the Assistant Treasurer in 
that city. They had become jealous of the Philadelphia 
financier's success, and noted with distinct displeasure 
his growing prestige. Earlier the principal agent of the 
Treasury Department, Mr. Cisco, now found that he was 
overshadowed by a man who operated in another city. 
His annoyance was increased for he had been outwitted 
at Washington by Henry Cooke who had effected an ar- 
rangement with Harrington and Chittenden by which 
the orders of Jay Cooke and Company (as the largest 
buyers) were given the precedence over all others. Mr. 
Cooke and his houses therefore had a material advan- 
tage over the sub-treasuries. Moreover, the Fiscal 
Agent could order in advance of his needs and keep 
bonds on hand, when he could obtain them, for im- 
mediate delivery, while the sub-treasurers were deprived 
of this privilege by the regulations of the Department. 

Rut even Mr. Cisco, as unfriendly as he was to Mr. 
Cooke for no explicable cause- beyond his jealousy of 


Philadelphia and its financiers and his political sym- 
pathies, had the civility to declare that three-eighths 
was little enough for managing the sale of the loan. Mr. 
Chase was allowed to cool off. Henry Cooke writing to 
his brother reports a conversation with the Secretary 
who said, "that in putting the loan into your hands he 
had done the best thing possible and he was glad he had 
the courage to do it, etc. He expected a Congressional 
investigating committee and charges of favoritism, etc., 
but he did not care if you would keep things in shape 
to meet them. He suggested that you should increase 
your bond which is not so large as the old one. I think 
if you were to take the old bond and have it renewed so 
as to cover your new appointment it would answer. He 
also asked if you could not deposit up a little closer." 
Thus day after day did this scrupulous and attentive 
public servant guard his own political interests and the 
interests as he understood them of his party and his 

Itemized statements with the vouchers for commis- 
sions and all the various expenses incurred in adver- 
tising and promoting the loan were furnished the Secre- 
tary of the Treasury and he was enabled to see that Mr. 
Cooke had left for himself considerably less than the 
one-eighth pledged him as his own part of the allowance. 

Despite the Secretary's unsettlement of mind and ap- 
parent unwillingness to support Mr. Cooke in the great 
work, he declared that he would go on with undimin- 
ished vim. But in reality he was much hampered by 
the announcement of Mr. Chase's economical policy, as 
he was distressed by such expressions of distrust, and 
the subscriptions were falling off in June quite as much 


for this reason as because of Lee's determination to in- 
vade the North by a movement which culminated in the 
battle of Gettysburg. 

In June the subscriptions, through the Agency, were 
as follows : * 

June I $1,503,050 

June 2 658,150 

June 3 775>85o 

June 4 1,342,300 

June 5 1,275,000 

June 6 1,034,550 

June 8 1,071,000 

June 9 835,200 

June 10 1,449,950 

June II 1,369,100 

June 12 1,122,200 

June 13 1,260,900 

June 15 543450 

June 16 429,900 

June 17 446,300 

June 18 546,850 

June 19 730,800 

June 20 512,500 

June 22 456,850 

June 23 774»ooo 

June 24 1457400 

June 25 1492,950 

June 26 1,270,000 

June 27 1,292,850 

June 29 , 332,700 

June 30 1,324,650 

During the fiscal year ending June 30, 1863, the loan 
yielded Secretary Chase $175,037,259.44 which added to 
$13,990,600 for the fiscal year 1862 indicated a total 

1 Commercial List, Phila., July 4, 1863. 


issue of about $189,000,000 of these bonds, three- fourths 
of which had been sold by Jay Cooke. 

With the announcement of Lee's determination to in- 
vade the North the excitement was intense. There was 
panic again in Washington, greater than any the city 
had experienced since the second battle of Bull Run, 
and the military situation seriously interfered with the 
calculations of the Treasury Department. On June 
25, 1863, Henry Cooke wrote: 

If the rebs should cut off land communication with the North 
Harrington is determined there shall be no interruption of the 
receipts and deliveries of bonds and of Department business. 
He will put two or three swift revenue steamers on the line con- 
necting with the railroad at Havre de Grace or beyond and so 
keep up intercourse. We have no fears of Washington, be- 
lieving that we are prepared for any force the rebs can bring 
against us from any quarter, but it is possible that our lines of 
communication with the North may be temporarily deranged. 

On June 29th he observed in a letter to Jay Cooke 
that they were in "tight quarters, the r. rs. (rebel raid- 
ers) being all around the city," although postal com- 
munication had not yet been interrupted. "The city,** 
he continued, "is full of all sorts of stories and the 
anxiety is general and quite intense, but not boisterous. 
Indeed there is an unusual quiet prevailing and the 
streets are half deserted, presenting a regular Sunday 

Fahnestock was not so cool or hopeful. He had just 
returned from a visit to his home in Harrisburg, where 
the "greatest excitement" prevailed. He wrote Jay 
Cooke of the precautions taken to protect the Washing- 
ton office, saying: "We are as low in funds as we dare 
be and have had a very kind offer from one of the for- 


eign legations to protect our traps and one of our clerks 
in their house in case we should happen to be invaded; 
so be comfortable upon that point/' ^ 

To increase the fiscal agent's difficulties he was at 
such times compelled to face a partner who was a cool 
Union man. As soon as he withdrew from Mr. Cooke's 
inspiring presence he was prone to surrender to his 
fears and despondencies and he had it often in his mind 
to check the loan operations, and if possible induce a 
severance of the firm's relations with the Treasury De- 
partment. Late in 1862 Mr. Moorhead was writing: 

Unless we have a military success near the heart of the rebel- 
lion all the talent of the universe combined cannot arrange a finan- 
cial scheme that will furnish money for the government. We 
need not flatter ourselves to the contrary. Common sense must 
guide us in our operations. We can keep near shore and it is 
our duty to do so. 

A few days later, on his departure for Harrisburg, 
before Mr. Cooke's return after a brief absence from 
the office Moorhead wrote : 

I have become more interested in our business here by my 
connection with it the last few days and I am convinced that our 
true policy is to cut down our government securities to the lowest 
point. We ought not to assume the risk of those things. We 
cannot sustain their credit with our capital. The amount out is 

1 On July 3 after the battle of Gettysburg, Mr. Cooke's friend George 
R. Messersmith of Chambersburg wrote : " After living nearly two 
weeks under the rule of our * Southern brethren ' we are still all alive and 
well, and the 'old bank' has lost nothing. Personally I have suffered 
heavily having large encampments on my farm during their entire stay. 
Crops, fences, trees, everything save the buildings, are utterly destroyed. 
We have had a sad time of it. Up to last evening 50,000 men and 200 
cannon have passed through this place. To-day all is quiet and I hope 
we shall see no more of them. Are these vandals again to escape?" 

Mr. Messersmith's '* vandals " did escape once more and old Eleutheros 


too enormous for our limited means. I much prefer paying 
debts and sailing very nearly under bare poles for a while. The 
reputation of our house is so well established that we can do a 
snug business and make money enough in a quiet way without 
risk. I want to have a full, free talk on this subject on my re- 
turn. I am well advanced in years and I trust possess some 
judgment mixed with considerable discretion. I go for cau- 

As late as in June, 1864, when Grant was suffering 
his defeats in the Wilderness, Mr. Moorhead was still 
ready to give up the cause : 

Don't get in a passion and say that I am " coppery *' ; *tis not 
so. I am sober and look at things as they are. Dispose of all 
your governments as fast as you can to any advantage. Take in 
sail and let us be prepared for the worst. 

And again the next day : 

I have no faith or confidence in the future of this country as a 
great government. Time will decide and in less than six months, 

Such lugubrious prophecies counted for very little 
with Jay Cooke, even though they came from the prin- 
cipal, if a minority partner, in his gigantic operations. 
He went forward in spite of all discouragements and 
obstacles. A witness of the events of that time in re- 
calling his enthusiasm for the loan gives the account 
of a visit of a poor, ill-clad woman, anxious as were 

Cooke out in Sandusky, in common with many other loyal men did not 
sleep for several nights for anxiety lest Meade would not pursue and 
destroy the retreating army, "almost fainting with regret and mortifica- 
tion at each day's news that no movement " was made for battle. " Never 
before except perhaps after the battle of Antietam was there so glorious 
an opportunity to crush the enemy and end the war," wrote Eleutheros 
Cooke. "Providence had done His part in swelling the Potomac and 
with wise counsels and prompt action we should now have been celebrating 
the conquest of Virginia and the practical downfall of the Rebellion." 




thousands who brought their meagre savings to his of- 
fice to have from his own lips a recommendation of the 
loan. She had a shawl wrapped about her shoulders. 
*'I believe in the Union so firmly," said the financier, 
"that if I were you I would take off that shawl, sell it 
and buy government bonds." 

When the first of July arrived, the end of the term 
fixed by law for the sale of the five-twenties, Mr. Chase 
decided to continue the operation. Although in some 
doubt as to his powers in the case he chose to consider 
the g^ant discretionary. It was most desirable from 
every patriotic standpoint that this liberal interpretation 
should be put upon the words: "And the holders of 
United States notes . . . shall present the same for 
bonds ... on or before the first day of July, 
1863, and thereafter the right so to exchange the same 
shall cease and determine." ^ There is evidence that 
Mr. Cooke in the face of this positive command did not 
very fully believe in the theory of discretionary power. 
He had honestly thought and honestly stated to sub- 
scribers that the privilege of buying these bonds would 
cease on July ist. He had as much conscientious con- 
cern upon this point as upon another of much more im- 
portance, that his promises should be adhered to regard- 
ing the payment of the principal of the debt in coin. He 
constantly made the declaration that it would be so paid, 
although the enemies of the financial policies of the 
Union denied that the government rested under any such 
obligation. Henry Cooke wrote upon this subject: 

After a thorough search of all laws, joint resolutions, etc., of 
Congress, no clause or paragraph can be found establishing the 

^ Cf. Schuckers, p. 346, who advances an odd theory on this subject 


principle that the principal of the funded debt is payable in coin, 
although this is frequently and positively affirmed of the interest. 
Such, however, has been the uniform practice of the government 
from its foundation and it is held that it is in pursuance of con- 
stitutional provisions which are above statute law. The Secre- 
tary decided over a year ago, and it was so announced, that 
while the current, or temporary, indebtedness might be paid in 
greenbacks, the permanent, or funded, debt must be paid in coin, 
and it was so announced in the papers at the time. All the 
analogies and precedents, and the requirements of the Consti- 
tution make it imperative that the funded debt should be paid 
in coin, and this assurance ought to be enough without specific 
law. These views I submit after discussing the subject with 
Mr. Field, with Mr. West, Mr. Henderson and others familiar 
with the law, the Department practice and the general views of 
the Secretary. Besides, the whole phraseology of the different 
loan acts implies that the bonds, when redeemed, shall be re- 
deemed in gold and silver. Any other construction would give 
the death blow to the public credit and would be the height of 
folly. Of course Governor Chase could not be guilty of such an 

There was some 4oubt for a time whether Jay Cooke 
would be continued as the agent after July ist. Rumors 
of his withdrawal from the work were published in New 
York. Mr. Chase had a plan for disposing of a block 
of bonds at par to a group of bankers, withholding other 
issues for sixty days so that they could sell them at a 
premium large enough to compensate them for their 
trouble, but he was brought to regard the idea as im- 
practicable and Mr. Cooke was instructed to continue 
his agency for *'a brief period/* which was set down at 
probably thirty days. 

* November 19, 1863. Fahnestock about this time asked Chase if the 
gold piece worn upon his watch guard was a " reminiscence." *'No," re- 
plied the Secretary, " a prophecy." 


What his compensation was to be was still wholly un- 
certain, Mr. Chase refused to make an arrangement 
to which the Subscription Agent would agree. If one- 
quarter would not do the Secretary thought that three- 
tenths should suffice. Mr. Cooke responded that the 
sum was too small. If a change were to be made he 
must continue to ask for one-eighth for his sub-agents 
and one-eighth for advertising, while he would suffer 
the reduction to affect his own share only and content 
himself with one-tenth for his personal services. Much 
more could be done with three-eighths than three-tenths 
and still more with one-half than with three-eighths. 

To this the Governor rejoined, [says Henry D. Cooke] that he 
believed experience and the results acconiphshed established the 
correctness of your [Jay Cooke's] opinions, but at the same 
time that the public. Congress and Congressional committees did 
not and could not be made to see it in that light, and he felt it 
an absolute necessity to keep the rate of commission down as 
low as it could be kept consistently with the successful working 
of the plan. To show what kind of opposition he had to expect 
he instanced a remark of Seward's at cabinet meeting last even- 
ing, Seward said he could see no reason why the 5-20 bonds 
should not be put off at a premium, if they were withheld from 
the public at par ; that while *8is were at 7 to 8 per cent, premium, 
the 5-20S should be at least 4 or 5 per cent., it being conceded, he 
said, that the market difference between the shorter and the 
longer security is not ordinarily more than 2^ to 3 per cent. 
Governor Chase said he could not of course enter into an argu- 
ment with Seward, but he cited the remark to me as a straw 
showing which way the wind would blow and as rendering neces- 
sary extreme caution on his part.* 

"Go ahead on three-tenths," said Mr. Chase to Henry 
Cooke on June 29th. If Jay Cooke found that he must 

^ June 24. 


trench upon his own one-tenth the Secretary promised 
to lay all the facts before a joint committee of Congress, 
recommending his reimbursement, a rather unusual and 
not very valuable pledge, especially when it was fotmd 
to include the additional promise that the conmiittee was 
to be "fair and intelligent." * 

Mr. Chase still expressed much personal friendliness 
and official gratification. "I am fully satisfied," he 
wrote to Jay Cooke on July 13th, "that the success of the 
5-20 loan is due in a very large measure to your zealous 
and wise agency." 

And on July 226 in concluding a communication he 

I by no means fail to appreciate the value of your agency or 
its utility to the government. I do not doubt that the loan nego- 
tiated through you has furnished means for meeting puMic dis- 
bursements more economically than could have been obtained in 
any other way, and that the certainty and regularity with which 
demands upon the Treasury have been met from the proceeds of 
this loan have materially lessened the cost of supplies, and in 
this way saved several times the cost of the agency. But I wish 
to have all contracts made by the Department definitely under- 
stood at the outset and then exactly fulfilled without any de- 
parture not mutually and definitely agreed upon beforehand. 

In August Mr. Chase was still promising Mr. Cooke 
an early and definite conclusion as to the amount of the 
allowance on the sales of the bonds and to assist him in 
reaching his decision the following letter was sent him 
under date of September 5, 1863: 

Hon, S. P. Chase, Secretary of Treasury: 

Dear Sir : — In reply to your inquiry we would state that Mr. 
Jay Cooke's allowance to western agents for sales of 5-20 bonds 

^ Henry D. Cooke's words in a letter to his brother, June 29, 1863. 


giYts them one-eighth per cent, commission and one-eighth per 
cent, to cover advertising, printing, exchange on drafts and 
freight on legal tender notes remitted to U. S. depositaries, or 
to Mr. Jay Cooke in payment for subscriptions. The two last 
named items^ exchange and freight, absorb the larger share of 
this eighth. 

In the east the one-fourth of one per cent, allowed to the gen- 
eral sub-agents at New York, Boston and Providence (cover- 
ing New York, East Jersey and all New England) is expended 
as follows : One-eighth of one per cent, is allowed these agents 
as their commission and in addition thereto one-eighth of one 
per cent, is allowed by them to all country and other agents buy- 
ing to sell again. This last extends to about half of their total 
sales. With the balance, one-sixteenth of one per cent, they 
pay for advertising, circulars, editorials, travelling agents, tele- 
grams and freight on bonds sent to customers, encroaching upon 
and expending a considerable portion of the one-eighth per cent, 
allowed them as a commission. 

In Mr. Jay Cooke's own field or " home field " the one-quarter 
of one per cent, is expended as follows : One-eighth of one per 
cent, is allowed to sub-agents and to parties buying to sell again, 
and the balance covers the cost of circulars, advertisements, 
editorial notices, travelling agents (extending all over the two 
fields eastern and western) and express freights ©n bonds. 
Most of the business with the west involves the expense of tele- 
grams both ways. The bonds are sent by express free of charge 
to western subscribers and agents, the entire expense of which is 
paid out of Mr. Jay Cooke's allowance. 

Into this work and into these channels nearly thirty thousand 
dollars over the sum set apart for expenses of this nature have 
been paid which amount comes out of the commission of one- 
eighth of one per cent, apportioned to Mr. Jay Cooke. 

Very respectfully yours. 

Jay Cooke and Company. 

Mr. Cooke was now completely out of patience with 
such behavior, especially when he considered Chase's 


movement to sell Treasury notes, thus implying that 
not enough income could be derived from the five-twenty 
agency to prosecute the war. He wrote his brother 
Henry as follows: 

There would have been no need whatever of applying to the 
banks for a loan, selling the legal tender interest-bearing notes 
at really a ^ discount (giving an average of one month interest 
to the banks) if Gov. C. had let me alone and not disturbed 
the old arrangement of J^. As it is, he has kicked over the 
money market, almost stopped subscriptions to 5-20 loan (if the 
present panic continues the subscriptions will fall very low) 
and unless I can regain the lost ground by a fresh and vigorous 
start I fear we shall find it hard work to make large sales. I 
want the question decided now. I am tired of this delay. It is 
discreditable to my skill as agent that sales should fall to below 
half a million daily as now. I am unwilling to stand in this 
waiting position any longer. As it is, after waiting and expect- 
ing daily instructions, I have of course done nothing in the way 
of new circulars, or advertising, or sending out agents for more 
tlian a month. I cannot work to any sort of advantage simply 
because I can't say whether I am to be restricted to J^, J4 or J^. 
You must not let the day pass without final answer. It will be 
worse than ever if he reduces the amount of the }i allowance. 
He must continue it. The work cannot be done as I do it, even 
for this, but as I have always said, I am willing to disburse the 
half or whole of my J^ if need be to succeed. ... Of course 
I will follow instructions but I want them (if reduced rates are 
to be the order of the day) down in black and white. Then I 
shall print and send them to all and do my best to succeed under 

On September 11, 1863, Henry Cooke was able to 
write his brother as follows : 

In reference to the continuation of your }i allowance the Sec- 
retary had several questions to ask me. He did not seem to un- 

1 September 4, 1863. 


derstand fully the matter of exchange. I explained it to him in 
detail and again, for at least the twentieth time, urged him to 
come to a prompt decision in reference to the whole matter. He 
said his docket was now clear and he had this matter now under 
consideration. He promises to give an answer this week. My 
dear Jay I have urged this matter as strongly as it could be done 
without giving positive offense, and I have done it with the full 
conviction that the delay was ruinous to the success of the loan 
and that it was a matter which concerned the Secretary infinitely 
more than it did us. At last I believe the question will be settled, 
and settled right. 

Doubtless one of the principal objects of the Secre- 
tary's curious course, which Jay Cooke seems then not 
to have understood, was his desire to avoid a renewal 
of the charges of favoritism in the autumn campaigns 
in several critical states. Mr. Chase was in truth more 
friendly than he appeared. He had no reason to enter- 
tain any other sentiments, but he always had a sense of 
duty which bore upon him painfully, and on no account 
would he knowingly imperil his political prospects. 
That the Secretary ever jealously regarded Mr. Cooke's 
increasing prominence is most improbable. The bank- 
er's absolute detachment from politics and total lack of 
ambition for public office did not suggest a rivalry. 
Mr. Chase never considered him nor did Mr. Cooke 
at any time look upon himself as more than the instru- 
ment in the performance of a colossal task. There 
could have been no suspicion of sinister designs, for Mr. 
Cooke through all the agencies he created and main- 
tained — and they were potent in making public opinion 
in all parts of the country — was constantly voicing the 
praises of the Secretary of the Treasury, and they were 

soon to be used almost openly to favor Mr. Chase's can- 


didacy for the presidency.^ Henry Cooke wrote to Jay 
Cooke on April 13, 1863: "I talked with Governor 
Chase as you requested about the newspaper notices 
and read him what you said about it. He said it was 
all right, that you need not fear that he will be jealous 
of your prominence. On the contrary the more you are 
strengthened the more he will be strengthened, for it 
will help to silence cavil hereafter against him for hav- 
ing so freely used your services." 

On June 2, 1863, Mr. Chase wrote Jay Cooke a letter 
which has often been cited as an evidence of his rugged 
honest V. It was as follows : * 

Washington, June 2, 1863. 
My dear Sir: 

You informed me two or three weeks ago that you had pur- 
chased 300 shares of Philadelphia and Erie R. R. Stock for 
me. At that time I was expecting means of payment from the 
sale of a farm in Ohio and would have been glad to hold the 
stock for income. The sale, however, has not yet been effected 
and I have therefore not been able to make payment. 

This morning I have yours of yesterday notifying me that you 
have sold the stock at an advance, which gives a profit of $4,200 
on the transaction, and you enclose me a check for that amount. 

As I had not paid for the stock and did not contemplate pur- 
chase with any view to resale I cannot regard the profit as mine 
and therefore return the check for $4,200. It is herewith en- 

1 am much obliged to you for your willingness to regard the 
money paid for the stock as a temporary loan from you to me; 
but I cannot accept the favor. 

When Congress, at the last session, saw fit to clothe me with 

^ Nothing is more untrue than a contrary assertion in Judge Warden's 
curious Life of Chase, p. 673. 

2 Published in Schuckers' Life of Chase, Original in possession of Mrs. 


very large powers over currency and financial movements I at 
once determined to avoid every act which could give occasion 
to suspicion that I would use the powers conferred on me to affect 
markets unnecessarily, or at all with reference to the private ad- 
vantage of anybody. To carry out this determination faithfully 
I must decline to receive any advantage from purchases or sales 
made with views to profits expected from the rise or fall of 
market prices. 

For these reasons I must decline to receive the check. In order 
to be able to render most efficient service to our country it is 
essential for me to be as well as seem right and to seem right as 
well as be right. 

Yours very truly, 

S. P. Chase. 

Jay Cooke, Esq. 

The next day Mr. Cooke replied: 

My dear Gov.: 

I was quite astounded this morning at the return of my check 
on Washington. It never occurred to me that you would put 
such a construction upon this transaction, for the money market, 
the rise and fall of stocks, etc., was not at all in my mind. I 
fully agree with the noble sentiments expressed in your letter, 
and that your course is right and proper. The money don't be- 
long to me. I shall lay it aside for future consideration. 

It was only six days after this attack of conscience, 
however, June 8th, when Mr. Chase wrote to Jay Cooke 
asking him to add $i,ooo to the $4,500 he had lately ad- 
vanced to Mrs. M. L. Bailey, the widow of Dr. Gama- 
liel Bailey, editor of the National Era, the paper which 
first published ''Uncle Tom's Cabin," and faithfully for- 
warded Chase's presidential ambitions. She had a 
house in C Street in Washington which Mr. Cooke had 
taken at the Secretary's request, and with a free hand 
the banker was investing money sent him by Mr. Chase 


for the benefit of the latter's niece, Jane Auld of Love- 
land, O. 

In the meantime Kate Chase's wedding day was 
drawing near. She was to be married to Governor 
WilHam Spraguc of Rhode Island in the autumn of 
1863, said the Secretary, '*if they both live and don't 
change their minds." 

Sprague was the scion of a wealthy family of calico 
manufacturers in Providence. His grandfather, whose 
name he bore, successfully introduced the art of color 
printing on cloth and amassed a fortune which enjoyed 
many accretions under the management of his sons and 
grandsons until their works were widely scattered over 
Rhode Island and Connecticut. They were said to be 
the largest print cloth mills in the world and the ap- 
pending tracts of land and industrial villages gave the 
family great financial influence. 

William Sprague, the third, was a modest, unassum- 
ing type of a rich young man with ability and political 
ambitions, to gratify which he was ready to expend his 
money freely. In i860, at the age of thirty, he became 
the governor of Rhode Island. He was widely known 
as the little state's "War Governor," actively leading 
the Rhode Island troops in the field. After filling the 
office for three years he was elected to the United States 
Senate (where he was to remain until 1875) ^"d he was 
looked upon as the **catch" of Washington. Whatever 
other motives there were to prompt the alliance Kate 
Chase seems to have seen in Sprague's millions the op- 
l)ortunity to bring aid to her father's candidacy for the 
presidency in the contest with Lincoln in 1864, which 
was already in view. 


Despite Mr. Chase's rather open display of his hon- 
esty, while the nation suffered for money which at 
a word from him as to the allowances to be made to 
agents Jay Cooke would have supplied, there was no in- 
tention of giving affront to a banker whose friendship 
could be so valuable. It was not like the financier to 
make little differences into great injuries, and Chase, 
whatever he did, was to all the Cookes the first states- 
man of the age. Little fear of a loss of these admiring 
supporters might be entertained, especially as the 
banker was always put in the position of asking favors 
of the Secretary, though the government received so 
much more than it ever gave the financier. Nourish- 
ing no resentments, after months of annoyance with the 
question of the allowance. Jay Cooke pledged Kate 
Chase quantities of "flowers and good things" on her 
marriage day in November.^ He had his brother Pitt 
send ten boxes of Lake Erie Island grapes to Washing- 
ton for the wedding. Mr. Cooke's eldest daughter, now 
Mrs. Charles D. Barney, was chosen to be one of the 
bridesmaids, but her parents decided that she was too 
young to play this part in the ceremonies. The entire 
family was bidden to the marriage or to the large re- 
ception which followed it. The guests included the 
President, the cabinet officers, several members of the 
diplomatic corps, leading generals and senators and 
representatives with their respective families, constitut- 
ing what was probably the most distinguished social 
company assembled in Washington during Lincoln's 
administration. The nation regarded it as a notable 
alliance and it was said the gifts, which were valued at 

1 Kate Chase to J. C, Sept. 7, 1863. 


$100,000, had broken the record for all recent American 

Not only was Secretary Chase awaiting the result of 
the autumn elections of 1863 to make definite and in- 
spiriting arrangements with Jay Cooke for continuing 
the sale of the loan ; the country also waited. The sub- 
scriptions through July, August and September were 
not small, often exceeding one million dollars daily, but 
there was no sweeping popular enthusiasm, such as 
had characterized the operation in May and aroused the 
jealous enmity of the New York financiers. The times, 
no less than the Secretary's attitude, were unfavorable 
to large sales. There was a desire to know the Copper- 
head strength in doubtful states, the issue of the war 
and the fate of its debt depending quite as much upon 
the political temper of the people as upon the course of 
events on military fields. Mr. Chase gained courage 
and the partial promise of three-eighths of one per cent, 
for the work, which he had so long feared to confirm, 
was made absolute. In October the activity was re- 
sumed, much to the satisfaction of the Secretary, who 
said to Henry Cooke that if they could raise the sub- 
scriptions to the "old mark," about two millions a day, 
he could meet his arrearages, take care of his current 
expenditures and pay the soldiers up to November ist. 
Henry Cooke was not hopeful that the sales could be 
made to yield more than one and a half millions daily 
without organizing "a foreign demand," but he was a 
poor prophet, as he very soon discovered. 

Jay Cooke was about to depart for Sandusky for a 
vacation among the fish and ducks of Lake Erie: In 
the middle of October the sales suddenly and unex- 


pectedly rose to the totals of May. Henry came on 
to Philadelphia to direct the work in his brother's ab- 
sence. On October 21st he reported a "smashing busi- 
ness'* in S-20S ; the total was $2,364,000. On October 
23d it was $2,617,600; October 24th, $2,122,100, and for 
the week, $12,010,000. Rumors were rife that the last 
of the loan would all be taken by a few men to be sold 
out at their leisure at a premium and there was an un- 
precedented rush to subscribe, very fortunately for Mr. 
Chase, who in November and December, in addition to 
the regular demands upon him, had large amounts to 
make up for the redemption of certificates of indebted- 
ness, falling due in this period. 

On October 28th William G. Moorhead, who was also 
on duty in Philadelphia, wrote that the subscriptions 
reached three millions; on October 29th six millions. 
Even his pulses were quickened by the trade during 
these October days. The **boys" were proud of *'beat- 
ing the Tycoon,'' as they always called Mr. Cooke, and 
of passing all previous records in his absence. The 
pressure for bonds before November ist was particularly 
great, just as it had been on May ist, subscribers desiring 
to secure ''clean coupons." The scenes at the office in 
Third Street on October 31, 1863, are described vividly 
in a letter written with a pencil to Jay Cooke by Henry 
D. Cooke on the evening of that notable day. It is as 
follows : 

My dear Brother Jay: 

At half past seven I am here from the office after the biggest 
day's work on record — too tired to give you anything but a 
summary of the day's work. The office was besieged inside and 
out. Scores had to wait and wait, although we had four sub- 


scription tables in full blast. Local sales to customers amounted 
to $1,800,000. Our orders from the west, etc., were about 
$1,600,000 and the subscriptions from New York and Boston, 
Baltimore, etc., were a trifle over $10,000,000, making a total 
of between 13 and 14 millions. We sold bonds until we had not 
a single bond left on hand and we added only i ^ millions to the 
orders to preserve our usual margin, swelling the total to 15 
millions. Wm. G. went yesterday to Washington to see if we 
could not arrange with the Secretary to take mint certificates 
in New York and Boston, etc., in payment for bonds and also 
certified bank checks, as it is an absolute impossibility to get 
legal tenders enough to pay for subscriptions. The sales since 
he left have been $21,500,000, $6,500,000 yesterday and $15,100,- 
000 to-day. We deposited to-day here $2,600,000 and in New 
York, Boston, etc., $5,000,000, in all, $7,600,000 and Monday 
will deposit as much more, so as not to swell our balance at the 
Treasury too much. We have not yet encroached on your mint 
certificates at the bank (F. & M.), but will have to do so Monday. 
We made Mclntyre take $1,700,000 certified checks to-day which 
he carries till Monday, when we will arrange for him to hold them 
and let the banks pay the l.ts. in instalments so as to prevent too 
great a stringency in the money market for want of legal tenders. 
Should he decline we can put in the mint certificates and relieve 
the banks. Our deposits would have been much larger to-day, 
but for the impossibility of abstracting from the circulation of 
the three cities named more than seven or eight millions in a day 
without creating a panic. Governor C. understands the case, 
so you need have no uneasiness about our big Treasury balance. 
It is mostly made up of the two last days* sales. Anticipating 
a stringency in the money market owing to the absorption of 
legal tenders, we have discouraged time sales of bonds, and of 
the enormous aggregate of thirty millions sold this week not 
more than 2j^ to 3 millions are not for cash down and these last 
are to be paid for on delivery. The difficulty is in making the 
deposits at the Treasury. I fear this will not reach you till you 
leave. Should it reach you, however, it will relieve your mind 
so you can enjoy your trip home. 

Affectionately yours, H. D. C. 


These large sales again created a blockade in the De- 
partment at Washington and it was impossible to ob- 
tain bonds without long delays. Already on September 
7, 1863, Jay Cooke wrote his brother Henry: "I don't 
see any signs of an overissue of 5-20S. Still over 20 
millions due us and our western banks and customers 
are getting savage." After the October rush the situa- 
tion was materially worse. Mr. Cooke could not get 
ihe bonds from the government, nor, as we have seen, 
could he find the greenbacks with which to make deposits 
of the money received upon his sales, and this led to 
a recurrence of unpleasant allegations about his bal- 
ances. It was stated in some of the newspapers that 
he and his agents were holding back government money, 
while they speculated in stocks, an assertion that Mr. 
Cooke very flatly and positively denied. 

On November 21, 1863, he wrote his brother Henry 
as follows : 

The subscriptions each day somehow or other balance my 
efforts at getting legal tenders. Thus to-day we got in nearly 
700,000 in checks on banks and New York drafts by mail, and 
not one dollar of legal tenders can I realize from this subscrip- 
tion till next week. I have of course to order the bonds or stop 
receiving the checks, which is equivalent to stopping the supply 
of money and this puts me in a false position at the Treasury. 
I am charged at once with all bonds ordered when it is impossi- 
ble for me to have credit for deposit of funds for several days 
thereafter. I tried to get Mclntyre to-day to let me deposit 
checks marked good, but he would not take the responsibility. I 
could have put in a million of such checks. At it is, the money 
lies idle in the banks and I must await their time to get green- 
hacks. I have to-night in the various banks of Philadelphia of 

no use to me (about) $1,250,000 

In hands of New York correspondents 2,250,000 


In Baltimore, Boston, and other parties awaiting ability 
to deposit legal tenders $ 300,000 

One year certificates gold-bearing taken for S-20s; 
part in Wash 1,700,000 

Other government bonds and certificates 1,300,000 

Orders for bonds which were to be paid for on de- 
livery (expected at time to be in 3 or 4 days) about 7,000,000 

Demand loans and other assets, including Nat. Bank 

stocks, Washington and Philadelphia 3,000,000 


A sum vastly in excess of the amount due for S-20S. . . . 
If any complaint is made I want you to explain that it is not my 
fault and is no profit to me, but on the other hand is a source of 
trouble and care. . . . You must state to the Dept. that the 
one-year certificates you now hold, together with many more that 
I now have on hand, should be put in to credit of my account at 
once. I took them for subscriptions from all quarters and it is 
not right that I should now be required to keep them. 

"The money is of no sort of use to me or the agents, 
and would all be in the Treasury if it could be put 
there," Mr. Cooke wrote again about this time. "The 
deposits to-day will be very handsome and all my agents 
as well as myself will advance all the money we can get 
greenbacks for out of our own resources, although the 
big amount of bonds due us hurts our sales and bothers 
us generally." * 

A letter was sent to Secretary Chase over Mr. Cooke's 
head by a purchaser of bonds in Milwaukee, asking why 
he did not receive that for which he had paid and ex- 
pressing a doubt in the good faith of the government. 

I am glad Gov. C. sees how much this delay hurts and an- 
noys me, [Jay wrote to Henry Cooke, on November 30th.] 

iToH. D. C. 


I don't wonder at all that people grow uneasy at four weeks' 
delay. It is entirely inexcusable. About 33 millions of bonds 
are now due me and from me to the subscribers. This letter 
is the first instance in which any doubt has been expressed, but 
I have lots of letters scolding and blowing us all up for promising 
bonds in four or five days, and then not furnishing them in 30 
days. I manage to keep everybody good-natured. . . . Try 
and get a despatch in the papers encouraging the people. . . . 
I have kept on depositing every day every dollar that I could 
get legal tenders for, and it is not my fault that the account is 
not as near square as it was before the great rush. I would 
much prefer it to be so, you know. There is always of necessity 
when sales are one to two millions a day a balance apparently 
on the books against me of three to six millions, as we order 
bonds by telegraph and the certificates of deposits in the sub- 
treasury do not reach Washington for two or three days there- 
after; but this I suppose you have explained to the Secretary 
and it cannot be avoided in such a large business. In the present 
case I am doing the best I can. I have deposited each day every 
dollar that was possible and have balances in nearly all our banks 
here, and large balances entirely idle and useless to me in New 
York, Boston and Baltimore which my agents are exerting 
themselves to turn into legal tepders, and deposit daily all they 
can get. ... I am paying in out of my own funds also and 
could square up in one day if the bonds were all delivered. I 
have to take the risk of the bonds ordered and not yet paid for 
being; taken and the item of interest on this amount does not 
compensate me at all for the delay and annoyance and risk, for 
I have to turn in my own funds as far as I can get a chance to 
do so, and assume the risk of the parties taking them after so 
long a delay; for if any great trouble should arise and the five 
twenty loan drop, as it did once before, to 93 or 95, I should be 
bound to take them from the government and might have them 
thrown on my hands. 

Although Jay Cooke and Company were receiving 
from three to four millions daily in December, at Christ- 


mas time the Department was still about five weeks be- 
hindhand with its deHveries of bonds. 

Meanwhile the Washington as well as the Philadel- 
phia office of Jay Cooke and Company was growing and 
expanding as the demands upon it increased. Already 
in December, 1862, Henry D. Cooke wrote that the 
building at 452 Fifteenth Street was "thronged." 
There was not enough "counter room" ; the "help" was 
insufficient. He and Fahnestock were looking for 
larger quarters and for new clerks and assistants. 
They were doing a greater business than Riggs and 
Company, or any other firm in Washington. Some- 
times during the 5-20 excitement, even after the force 
was materially increased, the clerks as well as the part- 
ners of the house worked until one o'clock at night, re- 
turning at five in the morning to clear the books of ac- 
cumulated orders for bonds. Five or six millions were 
shipped in thirty-six hours in September, 1863, and the 
business of the house assumed proportions only second 
to that which marked the days at the parent office in 
Third Street. 

In his report to Congress in December, 1863, Secre- 
tary Chase made the only complimentary references he 
had yet dared publicly to address to Mr. Cooke. They 
were not lengthy, but so far as they went well deserved 
and just. Late in November, while preparing the paper 
Mr. Chase had denied himself to everyone, even refus- 
ing to see Simon Cameron when he called, but Henry 
Cooke slipped him an invitation to Thanksgiving din- 
ner, which was accepted. The Governor was in "the 
best possible spirits," but "indisposed to touch upon 
business at all," although he was given "every oppor- 


tunity to speak his mind/' While he had had no hand 
in framing it, the rejx^rt met Henry Cooke's fondest ex- 
pectations, especially in its declaration that the distribu- 
tion of the loan would not be transferred to any other 
house. The Secretary of the Treasury said : 

The plan of distributing the seven-thirties was that of employ- 
ing a large number of agents in many places, and directing tlieir 
action from the Department. It worked well for a time, but was 
soon found inadequate to the financial necessities of the gpvem- 
nient. For the distribution of the five-twenties, therefore, a 
different plan was adopted. After ascertaining by inquiry that 
they could not be disposed of to capitalists in amounts sufficient 
for prompt payment of the army and navy, and for the satisfaction 
of the just claims of public creditors generally, without serious 
loss, the Secretary determined to employ a general agent under 
adequate bonds, and confide the whole work of distribution, 
except so far as it could be eflFccted by the Treasurer, Assistant 
Treasurers and designated depositaries, to him and sub-agents 
designated by him and responsible immediately to him. Under 
this plan, and chiefly through the indefatigable efforts of the 
general agent and his sub-agents five-twenty bonds to the 
amount of nearly four hundred millions in denominations of 50, 
100, 500 and 1,000 dollars were distributed throughout the 
whole country not controlled by the rebellion and among all 
classes of our countrymen. The history of the world may be 
searched in vain for a parallel case of popular financial support 
to a national government. The Secretary is unable to perceive 
in what better or more effectual mode the important object of 
distribution could be accomplished, and he proposes no departure 
from it, except such as considerations of economy, harmonized 
with efficiency, may suggest.* 

Jay Cooke v^as repeatedly urged, particularly by his 
brother Henry, to sell a large lot of the 5-20S in Euro- 
pean money centres, but he resisted all the importunities 

* From Report of December, 1863. 


of such advisers on patriotic principles. On March i, 
1863, he received a letter from George Manly of New 
York suggesting a foreign loan of from fifty to one 
hundred millions. "I apply to you/' said he, "because 
you can, I have no doubt, arrange the whole matter if 
any one can. This is no speculation started here; we 
have the application from one of the largest and rich- 
est banking houses in Europe and know it can be done 
and I think upon very favorable terms.'' He asked for 
a personal interview and the letter gave Mr. Cooke the 
opportunity to state his opinions on this subject clearly 
and conclusively. He replied as follows: 

I have not the remotest doubt that the holders of foreign capital 
will, when they see it for their interest and not before, take 
hold of our government securities. I am equally sanguine that 
they will have to pay dearly for them. I for one hope that they 
will never invest a dollar in this country. We are free from 
foreign debt now. I count it one of the many blessings to off- 
set the miseries of this war. I do not think it for the interest of 
our country that our debt should go abroad. Let us hold it all 
here. We are able to do so and had belter not put a whip into 
the hands of foreigners to punish us whenever they see fit to go 
to war with us. 1 am against any foreign negotiations and trust 
that none will be made, although it would be very desirable to 
see sterling decline and gold bear a less premium. The measures 
adopted by Congress, if rightly carried out, however, will soon 
put a stopper on speculation of all kinds and cause a bigger panic 
in Wall Street than you or I have ever witnessed. 

Henry Cooke criticized his brother's course in this 
matter. He thought that if Europe were interested in 
Northern rather than Southern loans its sympathies 
would not be so exclusively Secessionist, and the gain 
in this, if in no other way, would be valuable. He be- 
lieved that it would be well to keep at least nine-tenths 


of the debt at home, but urged that the other tenth, 
say $100,000,000 or $150,000,000, should be placed in 
foreign countries. Moreover, the operation would, said 
he, scatter the gold speculators, raise the price of gov- 
ernment securities and incidentally yield Jay Cooke and 
Company large profits. He wished the negotiations to 
proceed through Baring Brothers. He talked with 
Chase and Sherman on the subject and was promised 
an option for ninety days on any part of $100,000,000 
at par, on which he thought there would be a margin 
of two or three per cent. Mr. Chase suggested that he 
should go to England at public expense with Robert 
J. Walker, whom the Secretary had been intending to 
send abroad on such a mission.^ The suggestion was 
that with the co-operation of the Barings they should 
get propositions for a loan payable at the pleasure of 
the government in ten, twenty, thirty, or forty years, 
then submitting the bids to the Secretary for his choice. 
Jay Cooke discouraged this movement as he had Man- 
ly's, although Mr. Chase about this time sold $10,000,- 
000 in New York for foreign (German) account with- 
out the fiscal agent's mediation and for a time there 
was a prospect of further shipments to European banks, 
through the same channels. Thus the question of for- 
eign loans rented until October 12th, when Fisk and 
Hatch, Jay Cooke's New York agents, made a proposi- 
tion for the sale of about $100,000,000 to a "ring" of 
three or four wealthy and responsible Germans. They 
suggested that he go to New York to consult with the 
men and he gave some attention to the matter; but the 
$100,000,000 dwindled to $5,000,000 and a turn in the 

1 Letter of H. D. Cooke to Jay Cooke, March 7» 1863. 


price of gold made the transaction look very much less 
attractive to the brokers, so that it bore no fruit. 

Late in the year overtures were received too from 
England. They came from James McHenry, a daring 
Anglo-American financier, earlier a resident of Phila- 
delphia, and William Evans, with whom Mr. Moorhead 
had been associated in some business transactions 
abroad. Their representative brought letters to Secre- 
tary Chase from Bright and Cobden and also had let- 
ters to several important men from Charles Francis 
Adams, the American Minister to England. The legate 
said that the United States had not one friend in the 
financial district in London, "while the Confederates 
had scores of claqueurs and advocates and bolsterers of 
their credit." AH that was needed, he thought, was 
to make known the truth (that the North and not the 
South would win the victory) and to secure the interest 
of a few prominent Englishmen in the bonds when there 
would be "no end to the amount" that could be sold in 
Great Britain. Jay Cooke was still not eager for such 
arrangements and the loan had been practically closed 
before the negotiations were completed. Mr. Evans 
came to Philadelphia in person, being entertained at Mr. 
Cooke's home in the Chelten Hills, and in February, 
1864, some small shipments of bonds were sent to him 
on account of the firm of Jay Cooke and Company, the 
remittance, as Mr. Cooke particularly explained, being 
an individual matter and irrespective of his government 
agency, for "your government, I know," wrote Mr. 
Evans, "neither seeks nor requires any aid from 
abroad." The first sale of $10,000 was made to John 
Bright, the sturdy friend of the North throughout every 


crisis of the war. Mr. Cooke gave Mr. Evans an allow- 
ance for advertising the loan in the English newspapers, 
but not as much as his agent desired. He asked for 
£i,ooo, but the incident, unproductive as it was of large 
results, is indicative of what Mr. Cooke could and would 
have done by an application of his methods in foreign 
countries, if he had not succeeded in distributing the 
loans at home. The premium on gold was such that the 
5-2OS were sold in England at this time at from $60 to 
$65 for a $100 bond. ''Send me more bonds," wrote 
Mr. Evans in 1864. "They will find their way and will 
make friends wherever they go." But such operations 
as were carried on abroad were trifling and private. 
They were not for government account and the great 
5-20 loan went to the American people almost in its 

In the closing months of 1863 the bonds were being 
disposed of in regularly large daily amounts. On No- 
vember 17th Cooke wrote to Chase: 

"There is nothing on record in history to compare 
with the triumphs of this appeal of yours to the people 
of our land, and I feel a just pride in having been under 
your instructions one of the instruments in this great 
work. . . . My estimate of the number of individ- 
uals subscribing to the loan to date is 536,000, of all 
classes, — high and low, rich and poor, white and black, 
— and of all nations and tongues, trades, occupations and 

Soon after the New Year the end was in sight, bar- 
ring the Secretary's determination to continue the op- 
eration beyond the limit — ^$500,000,000 — which had 
been fixed by Congress in the law authorizing it. At 



one time there was a possibility of an extension of the 
limit through further legislation. Mr. Chase told 
Henry Cooke that "he was and should continue to be in 
g^eat straits for money and that he could not afford to 
have any stoppage in his daily supplies." No other cer- 
tain means of furnishing the government with the neces- 
sary income presented itself to the Secretary's mind 
and the prospect of a violation of faith with the people 
which such action would imply deeply agitated Jay 
Cooke. In a long letter to Mr. Chase he wrote on 
January i6, 1864: 

And now, my dear sir, understanding from my partner and 
brother, H. D. Cooke, that you have it in contemplation to apply 
for authority to continue sales of the 5-20 loan beyond the 
500,000,000, I think it my duty to ask your attention to the fol- 
lowing reasons why I think such extension of the loan should 
not be entertained or decided upon, and I will here first state 
that, as I understand it, you were heretofore decided not to ex- 
tend the six per cent. 5-20 loan. I certainly have received such 
an impression myself from the tenor of your remarks from time 
to time. Mr. Cisco told me he so understood your views, and 
others have the same firm belief as to your views in this respect. 
Since my last visit to Washington I have considered myself as 
warranted in saying that you had decided positively on this sub- 
ject, and that the various rumors in the papers as to an applica- 
tion for extension of time and amount of 5-20S were false and 
had no foundation other than perhaps the statements of the news- 
paper men. The impression that myself and all our agents all 
over the land have sought to make available in making sales of 
5-20S is this, that the 500 millions would soon be all gone and 
then no more six per cent, gold-bearing bonds could be had ex- 
cept at a premium. I need not assure you that we have suc- 
ceeded in disposing of many millions to parties who have has- 
tened their orders, sometimes at considerable trouble and sacri- 
fice, to be certain of getting them now. 


I am always extremely cautious in making any uncertain 
statements or indeed any statements as to your views or plans 
so far as known to me, but in this case we all felt so sure that 
you had positively decided against any extension that we have 
stated it as a fixed fact. Our reputation is therefore at stake 
and our usefulness as agents will be greatly damaged if what 
we have stated so constantly of late in every variety of form, 
in editorials, telegraphs, letters and orally, shall prove false. 
. . . It would be in my deliberate judgment a breach of faith 
with the tens of thousands who have subscribed, with the ex- 
pectation of getting a premium, or at least of securing a valuable 
prize as an investment, now to make this loan so common and 
take away every element of our success, and brand as deceivers 
all those who have in such good faith used all legitimate argu- 
ments to increase sales. ... It may seem that your agent 
and others who thought they understood your settled views on 
this subject have no right to interpret them to the public with 
whom they more immediately come in contact, but is it right 
thus to cause us all to appear as deceiving the public? . . . 
I predict that you will not be able to make sales to any extent 
if this course is pursued; the act of extension after what has 
passed will throw a fatal damper on all the present and future 
negotiations of this kind. People will at least lose faith in me 
and I feel that I cannot with any heart or energy continue the 
labors I am now undergoing, and I would prefer to close my 
agency with honor and credit with the 500 millions, as my con- 
tinuing as agent after all I have led the public to believe (as I 
thought with a perfect concurrence on your part) is proved to 
be a sort of trick upon the public on my part, and the part of 
those I employ. . . . What you in your stern integrity most 
admire, I think, is honesty of expression of views. In this case 
it cannot escape your notice that (and as I trust always heretofore 
in time of public need) I am urging a course entirely contrary 
to my personal interests pecuniarily. ... I earnestly hope, 
therefore, that these most faithful representations may decide 
you to omit any application to Congress for any extension of 
the loan. 


In deference to the opinion of Mr. Cooke the Secre- 
tary determined to close the loan when the $500,000,- 
000 were sold. This day came on January 21, 1864, 
amid a whirl of orders from the various agencies, all 
fearful that the opportunity to obtain their fair final por- 
tions would escape them. It was foreseen that it would 
be no easy matter to bring the operation to an orderly 
end. At the close of January i8th the amount still un- 
subscribed for was only a little over $1 1,000,000, and the 
sales of the 19th reduced the balance to $8,872,500. 
The time had now come to inform the agents that no 
more subscriptions could be taken. It was supposed 
that about two millions would be ample to cover the 
needs of distant subscribers whose orders were in tran- 
sit, and would be received by course of mail. Mr. 
Cooke decided to take all orders started and on the way 
up to the end of January 21st, then telegraphing in 
every direction that the loan was closed. So large were 
the subscriptions of the last day that the $500,000,000 
limit was exceeded by about $1 1,000,000, and it required 
a special act of Congress to legalize the emission of 
bonds to cover the sales which, in this hour of enthusi- 
asm, were reported from every loyal American neigh- 
borhood. ^ 

"If Gov. C. could see the crowd of our first and best 
people in my office the last three days and have heard 
the congratulations and flattering speeches," Jay 
Cooke wrote on January 22d, "he would have been de- 
lighted. All speak of Governor C. as the most tri- 
umphantly successful financier the world ever pro- 

^ Act of March 3, i8<S4. 





Mr. Cooke now forwarded a congratulatory circular 
letter to all who had been associated with him in the 
great undertaking. It was as follows: 

Office of Jay Cooke, Subscription Agent, 114 South Third Street. 
' ^, Philadelphia, January 29, 1864. 

In reviewing the history of the past year as connected with the 
negotiation of the Five Twenty year U. S. Loan and its final 
absorption by the people of our own country allow me to tender 
to you my grateful acknowledgments of the services which you 
have rendered in its behalf. 

Never before in the history of this or other countries has any 
financial emergency so vast in its proportions been so promptly 
met ; and when we consider the great obstacles encountered by the 
loan at its inception, the coolness with which even its professed 
friends at first regarded it and the disloyal attacks of its opponents 
and then recur to the development of the patriotic spirit of the 
nation, and its wonderful resources as shown by the subscriptions 
to this loan of all classes of people, from the day laborer to the 
capitalist of largest means, we may be permitted to hail the 
result as evidence of both the determination and the ability of the 
nation to sustain the government in all its emergencies; and to 
prosecute to final success the most colossal war of modern times. 
To the able Secretary of the Treasury who devised this system 
of popular loan agencies, thereby proclaiming his confidence in 
and appealing directly to the patriotism of the American people, 
is primarily due the credit of this grand achievement. As his 
gents in placing the loan we have reason to congratulate htm no 
?ss than ourselves for the success that has attended our efforts. 
Looking hopefully to the future I think we may regard the suc- 
cess of this loan as the herald of the approaching day of Peace, 
Reunion and permanently established Prosperity in which the 
citizens of every section shall participate. And when the history 
of these times shall be written we shall have no cause to regret 
that we and you and all connected with this negotiation have 
tried to perform our duty. 

Again thanking you and bespeaking in behalf of whatever 


agency the government may select in its communication with 
you in the future the same earnest and faithful co-operation which 
you have extended to me I am, 

Sincerely yours, 

Jay Cooke, 
Subscription Agent. 

The agents warmly complimented Mr. Cooke in re- 
turn. Fisk and Hatch, his leading representatives in 
New York, wrote: "We congratulate you on the suc- 
cessful termination of the grandest financial triumph the 
world ever saw." 

F. P. Handy, President of the Merchants' Bank of 
Cleveland, replied to the circular: "Allow us to con- 
gratulate you on the glorious success of the popular 
5-20 loan. We have talked it up day and night for a 
year past and have seen no time when we would not 
have taken the whole of it if we had had the money. 
Looking to the future, we join with you in regarding its 
success as Hhe herald of peace and reunion/ Such 
'bonds' can never be broken." 

McKim and Company of Baltimore wrote: "We 
must be permitted to express to you the gratification the 
perusal of your patriotic and graceful circular in refer- 
ence to the sales of U. S. 5-20 bonds has given us. It 
was a noble eflfort on your part, most nobly sustained 
by the patriotism of our countrymen, and the vSplendid 
result may be contemplated with just pride by yourself 
and all having any agency in the matter. We beg to 
tender you our most cordial congratulations on your 
great achievement." 

Many of the newspapers also joined in the chorus 
of congratulation. The Philadelphia Inquirer said: 


"This loan constitutes one of the most remarkable fea- 
tures in the financial history of any country and its suc- 
cess has no parallel. . . . No nation on the face of 
the earth can boast of success so complete and at the 
same time so safe and satisfactory to all parties con- 

There was now no reason to doubt the truth of Mr. 
Cooke's frequently uttered prophecy that the S-20S 
would sell at a premium. The Secretary of the Treas- 
ury at Jay Cooke's suggestion determined to buy at par 
or less all of the loan in excess of the 500 millions and 
telegraphed Mr. Cisco in New York to make this oflfer 
publicly, thus strengthening the market against attacks 
of the enemies of the public credit congregated in that 
city. This in connection with other measures was im- 
mediately effective in establishing a ready market for 
the 5-20 bonds. They were quoted and sold at 102 on 
the 2 1 St of January and rose above 104 on the 23rd. 
In February their price was 107 and in March no. 

The great task of selling more than a half billion dol- 
lars' worth of six per cent, bonds amid the uncertainties, 
fears and reverses of a terrible war was now completed 
and there yet remained for Mr. Cooke only the assaults 
of the Copperhead editors and politicians, and his en- 
vious rival financiers. He had risked his fortune and 
his honor in dealings with about 2,500 sub-agents, of 
whose integrity he could have no pledge. He had sold 
bonds to buyers who would not receive them because of 
the fall in their price, which he raised again by main 
strength in the New York markets. He was compelled 
to cancel orders because of the Department's failure to 
make deliveries of bonds for weeks, and sometimes for 


two or three months, after they were sold. At his own 
risk he received and exchanged for the bonds the most 
various kinds of currency and commercial paper. At 
times he paid the government for and was imder an obli- 
gation to deliver to his customers in all parts of the 
country millions of dollars' worth of bonds when hostile 
armies surrounded Washington and multitudes of loyal 
men were predicting the end of the Union. 

While he was selling the bonds the Secretary of the 
Treasury, with his eyes set upon the White House, 
sought for months to reduce his commission below the 
amount which had been agreed upon and which he was 
expending upon the loan — three-eighths of one per cent. 
— and threatened the operation with ruin in fear of the 
attacks of Copperhead editors and Congressmen. He 
absolutely refused to pay any commission upon the 
amount sold in excess of 500 millions and upon that part 
of the loan taken through the sub-treasuries. He would 
pay but one-fourth instead of three-eighths upon such 
amounts as were sold through Jay Cooke's Philadelphia 
and Washington houses without the mediation of sub- 
agents. The Secretary constantly looked at Mr. 
Cooke's balances, questioned his movements and cast 
suspicion upon his operations as a protection against his 
own rather than the banker's enemies, the anti-Chase 
Republicans seeking to establish a sinister connection 
between the Department and the great Philadelphia 
banking-house. Under the weight of the difficulties 
with which he was beset by an inexorable government 
bureau, Mr. Cooke wrote to Chase in November, 1863: 
"I . . . have struggled through the year with a 
weight of care and anxiety upon me which, had I fore- 


seen the extent of it, I should have shrunk from with 

The time was now at hand for Blanche, Tray, Sweet- 
heart and all to join in the concert against Jay Cooke. 
"I know you are all right," wrote his brother Pitt 
about this time, "and the country owes you a debt as 
great as it did old Robert Morris, the 5-20 man of the 
Revolution. He was very well abused also. The at- 
tacks are dictated by New York jealousy." In that city 
the World, the Express and the Journal of Commerce 
renewed their hostile assaults upon the Secretary of the 

At the end of a long letter to Chase on January 21, 
1864, Cooke wrote : 

"I feel very happy at this closing of the loan. Was 
there ever a greater triumph? Is it possible that after 
all your responsibilities in the matter, and our efforts, 
there can be found demagogies so vile as to find fault 
and attribute wrong motives, and all sorts of unworthy 
influences to this grandest of all negotiations ? God for- 
give them." 

The editor of the "Annual Cyclopedia," published by 
Appletons, in the volume for 1862 made a most incon- 
siderate assault upon the government's financial system 
and Mr. Cooke promptly called the offender to account 
for the statements in his article. His New York agents 
supported him faithfully. Fisk and Hatch took care of 
the editor of the Encyclopedia and by way of a rejoinder 
obtained his consent to insert in his next issue an arti- 
cle which Mr. Cooke was having prepared by Dr. Wil- 
liam Elder, the statistician of the Treasury Department. 
Mr. Clews and Mr. Vermilye took in hand the editor of 


the hostile Journal of Commerce and Mr. Cisco, who 
as a Federal official serving under Mr. Chase was will- 
ing to have his praises sung by such newspapers at the 
expense of those standing over him. 

Mr. Cooke, although usually very composed under at- 
tack, was stung by these fresh assaults upon his public 
and private honor, but his New York associates urged 
him to await his justification at the hands of Mr. Chase, 
which was soon to be effected very handsomely.* 

^ About this time Mr. Cooke received the following letter from a jour- 
nalistic lieutenant explaining the situation in New York: 

New York Times, Jan. 28, 1864. 
My dear Sir: 

Mr. Stone of the Journal of Commerce does not speak to me when we 
meet. He gets the worst of every tilt he makes with me. This I say 
from no feeling of vanity for I esteem it no great credit to reply to the 
blind and vindictive assaults which he occasionally makes on the public 
credit, the national banking system and the Secretary of the Treasury. 
His hostile position to the government was taken in 1861. He is prop- 
erly appreciated here and I only regret that you should feel his venom 
for a moment. He made one apology at the instance of Mr. Clews, so far 
as you were personally impeached. But he hates the administration too 
bitterly and indulges the spite of a very small mind too freely to forego 
his repeated attacks upon Mr. Chase through you. He bespatters Mr. 
Cisco with his fulsome praises. I do not know how Mr. C, appreciates the 
bad taste thus indulged by his Democratic friend. I do know what he 
ought to do to put a stop to this miserable way of making war upon his 
chief. I told Wm. M. Vermilye of it a few days ago in connection with 
the very article which you enclosed to F. and Hatch. He promised to 
rub Cisco in a quiet way when a favorable opportunity offers. 

I have not been unmindful of the attacks upon you, but awaited the 
reply of Mr. Chase to the Congressional Resolution as a favorable occa- 
sion for a general reply. Meanwhile rest assured you are not suffering 
in this quarter or in the great public estimation of your signal and success- 
ful service with the popular loan. The Journal's abuse really enhances 
your reputation with all friends of the government. I do not care to 
make an issue with Mr. Cisco or his claims as a negotiator for the Treas- 
ury, as we are on good terms and I am more than willing he should have 
all the credit due to his efikiency as a sub-treasurer. But a great or 
economical negotiator for the Treasury I do not esteem him, nor do I sec 


Alexander H. Coffroth, the Democratic successor in 
the House of Edward McPherson of Pennsylvania, in- 
troduced a resolution in that body which was adopted on 
January 5, 1864. It was as follows : 

Resolved, That the Secretary of the Treasury be requested to 
report to this House what have been the services of Jay Cooke and 
Company to the government in the sale of United States secur- 
ities and what has been the rate and whole amount of compensa- 
tion therefor. 

Also whether said services might not have been as successfully 
performed by the Treasury Department itself. 

Also what sums of money if any have been paid out of the 
Treasury for advertisements ordered by Jay Cooke and Company. 

Secretary Chase and the Cookes were glad of this op- 
portunity to cover the whole ground, vindicate the en- 
tire policy and if possible put an end to all future com- 
plaint and criticism. With this end in view the Agent 

that it was at all in his line of duty and certainly beyond his spare time to 
canvass as you did for the popular loan. Beyond the offers made by the 
Associated Banks in New York he could do but little in placing such a 
vast sum, and these oflTers were never near the par value of the stock 
until long after you had established its certain success among the people. 
Had the attempt to cut off your agency last June succeeded the Treasury 
would have been at the mercy of the banks to shave the remainder of 
the loan on their own terms. Had you withheld your efforts in November 
and December for the Fourth National Bank the system would have been 
crippled in New York for a year to come. 

I have all the figures at command of the various negotiations of Mr. 
Chase and Mr. Cisco with the New York banks and the cost of each. 
And when Mr. Chase replies to the Congressional Resolution it may be 
appropriate to draw the parallel which I will do in very plain terms, how- 
ever it may wound the vanity of certain parties here. To approach Mr. 
Stone for justice to you personally would only be to magnify his already 
disgusting self-importance. I prefer to flaunt defiance in his face. But 
perhaps some other friend of yours could effect a quiet apology. I leave 
you to judge of the matter. Let me bear from you again. 

Truly yours, 



had very full and careful statements of his operations 
prepared and forwarded to the Treasury. He pointed 
out the fact that the cost to the Department of nego- 
tiating $125,000,000 seven-thirty three year notes and 
$50,000,000 8 IS, reducing the interest rate to the six per 
cent, basis of the five-twenty loan had been $11,500,- 
000, or 6y2 per cent., while the expense incurred by the 
government in floating the $500,000,000 of five-twenties 
was only $1,400,000 or about one-fourth of one per cent. 
Mr. Chase's principal operation, before this one which he 
committed to the care of Mr. Cooke, had cost twenty- 
five times as much to the government, a showing which 
of itself should have insured them both against criti- 
cism. Fully to enlighten the Department in preparing 
its report Mr. Cooke forwarded this letter to the Secre- 
tary of the Treasury : * 

Philadelphia, January 16, 1864. 
S. P. Chase, 

Secretary of the Treasury: 

Dear Sir : — The last twenty millions of the 5-20 loan are 
being rapidly absorbed and in reference to the approaching close 
of subscriptions a brief review of the operation of the system of 
popular agencies, as employed by you in the disposition of diis 
loan, under my subordinate supervision may not be inappro- 

In estimating the value of this system two considerations are 
essential to a correct conclusion, first the magnitude and impor- 
tance of the work accomplished and secondly the cost of its ac- 

Viewing these in their just relations to each other I think it 
cannot be fairly denied that the wisdom and economy of tlie plan 
adopted are fully established. First the result accomplished in the 

* MSS. in Treasury Dept at Washington, Division of Loans and Cur- 


universal diffusion among the people of the loyal states of a 
loan of unexampled amount in an unprecedentedly brief period 
of time. 

Within less than eighteen months the enormous aggreg]ate of 
five hundred millions of dollars has thus been diverted from the 
ordinary channels of investment and trade as fast as needed by 
the government without serious disturbance to the industrial or 
commercial interests of the country. The value of this result 
does not consist alone in the fact that the vast amount named has 
been provided as fast as required by current disbursements, but 
in the further fact that in the main the takers of the loan are our 
own people of all sections, occupations and degrees of wealth. •''In 
popularizing the loan more than a mere temporary emergency 
has been met. The foundation has been laid for future loans and 
the national credit has been placed upon a broader and firmer 
basis than it ever before occupied. Not only have the people been 
madef familiar with this form of investment and induced to give it 
their preference over all others, but their unlimited and hitherto 
unappreciated ability to meet all the financial wants of the gov- 
ernment even under the most exhaustive demands has been 

^Without stopping to refer to the popular eflFect upon our own 
people of these unexpected developments it may with confidence 
be claimed that the exhibition of our national capacity and self- 
reliance thus presented to foreign governments cannot have been 
without its effects in aiding to produce the recent change in their 
hitherto equivocal, if not hostile attitude towards our own govern- 

Another result effected by the rapid absorption of the loan 
under the popular agency system has been the saving to the 
government in the cost of war munitions and supplies by the 
promptness with which all demands have been met since the 
system went into operation. It is believed not to be an extrava- 
gant assertion to state that the reduction in the expenditures thus 
incurred from the expenditures that would otherwise have been 
necessary would, if reduced to dollars and cents, repay more than 
twenty times the entire cost of negotiating the loan. 


At the time when the loan was first offered to the public the 
credit of the government, if not actually impaired, was at least 
seriously depressed. Contractors were selling; their settled de- 
mands at rates of discount ranging from eight to eighteen per 
cent., and new contracts for supplies of all kinds were injuriously 
affected by the delays and uncertainty of payment. In nearly all 
such cases the government was the eventual loser of the dis- 
count since contractors added it to their estimates of cost of sup- 
plies. The eflFective means taken to dispose of this loan contrib- 
uted materially in affording immediate relief. Our noble armies 
in the field received promptly their well-earned pay and every 
branch of the public service felt the impulse of renewed vigor and 
determination imparted by the splendid success of your well de- 
vised measures of finance. The sale of these bonds then so favor- 
ably inaugurated has not been permitted to languish, but has con- 
tinued with uninterrupted steadiness to the present hour. 

The whole transaction in all of its extent and importance may 
justly be considered a great success which is due not less to the 
profound wisdom of the system of which this loan formed a part 
than to the large yet judicious liberaHty with which you provided 
for its sale and distribution. 

The second inquiry relates to the cost of the vast work accom- 
plished. If the expense incurred be in eoccessive proportion to 
the work achieved, or if it can be shown that the same result 
could have been attained more economically, or more effectually, 
or with less disturbance to other interests through the ordinary 
official agencies of the Treasury Department then the plan 
adopted in the negotiation of the five-twenty loan is fairly subject 
to the criticism of which in some instances it has been the subject. 
If the reverse is shown the efficacy and economy of the system of 
popular agencies are placed beyond cavil. This system has not 
been exclusive in its agencies. It has been opened to all who 
chose to engage in the work of popularizing the loan. Nearly 
twenty-five hundred agents, mostly responsible heads of banking 
firms or officers of chartered banking institutions, representing 
every considerable town and populous district in the loyal states, 
have thus been employed. By means of their local position and 


influence they have brought and kept the merits of the loan prom- 
inently before the people of their several localities, and the com- 
missions and allowances paid them have stimulated their efforts 
in its behalf. They have in countless instances determined, or 
changed the direction of investments into the channel popularized 
by their efforts. They have practically loaned to the government 
the use of all their banking facilities by the aid they have afforded 
purchasers of the loan. This has been done by furnishing the 
latter exchange on New York, in cases where legal tender notes 
could not be obtained by the sale or exchange of their other 
securities, by temporary advances, or by providing bonds in ad- 
vance of sale that they might have them ready for delivery upon 
demand of their customers. In many other ways which need not 
here be enumerated the private and incorporated banking, capital, 
and the financial influence and energy of the whole country have 
been enlisted in the great work of placing among the people this 
greatest of all loans. 

It is evident without further comment that so large an achieve- 
ment which tasked the united efforts of the greater proportion 
of the banking interest of the country with its extended influence 
and clerical force could not have been effected by the ordinary 
limited agencies of the Department with only its half dozen sub- 
treasuries and eight or ten depositories. 

Moreover if the Department itself after orders had been pro- 
cured by the agencies had undertaken to distribute direct to each 
individual subscriber, instead of leaving the work of distribution 
to the sub-agencies, the details of the business would have ren- 
dered necessary an enormous increase in its clerical force, and 
even then the official formalities and legal limitations of action 
would have presented insurmountable obstacles in the way of 
prompt distribution. 

A distant officer could only have sold the bonds for legal tender 
notes actually paid which were not always to be commanded at 
the^lace of purchase. As the general subscription agent I was 
enabled to accept bills of exchange and checks from the sub-agents 
and to place the money realized in legal tender notes with the least 
possible delay at such points as might be convenient for the gpv- 


ernment. The general control of these operations confided to my 
hands gave me power through my sub-agents to command the 
resources of all parts of the country without any of that con- 
fusion and conflict likely to arise from want of unity of direction 
and co-operation in distant sections. On the other hand a multi- 
tude of separate and independent agencies would in all probability 
have engendered antagonisms injurious, if not fatal, to the nego- 
tiation, and the divided responsibility would have increased the 
chances of laxity and irregularity, and possible loss to the 

It was no inconsiderable labor to organize the complicated ma- 
chinery of this system. In order to popularize the loan, and to 
procure its distribution in proper sums among the people in all 
parts of the country an extensive system of advertising, and of 
active personal efforts by local and travelling agents was indis- 
pensable. For this purpose it was essential to make use of the 
best talent and integrity combined with financial strength to be 
found in the centres of business in every section and nothing but 
the strongest personal motives coupled with a sense of great re- 
sponsibility could have secured at once the safety and efficiency of 
the system. 

The mere work of delivering the bonds at the several points of 
distribution has been attended with no little labor and expense. 
In none of the great commercial nations of the world are the dis- 
tances to be overcome in order to communicate with the different 
local centres of population and business so enormous as in our 
country. In England, France or Germany it is easy to reach tlie 
people of every locality and the distribution of loans in those 
countries even where the appeal is made to the broadest popular 
sympathy involves none of the difficulties arising from a sparse 
population and lines of communication commensurate with the 
boundaries of a continent. 

Risks of all kinds are necessarily greater here and prices are 
modified accordingly. In the present case the five-twenty bends 
in sums as low as fifty dollars have been carried to the very 
doors of the citizen to the remotest settlements of the far west, 
wherever the prosperity of the people, or their lively patriotism. 


has prompted them to contribute to the necessities of the govern- 
meift. With few exceptions the cost of such transportation was 
paid to express companies out of the three-eighths of one per cent, 
allowed for commissions and expenses. It cannot be doubted that 
the unusual facilities thus afforded for the universal participation 
in this popular loan have greatly contributed to its rapid absorp- 
tion, nor can any one say how slight a diminution of the facilities 
arising from any want of adequate means or motives for distribu- 
tion would have materially altered this favorable result. 

The sales by the popular agencies will amount in round num- 
bers to three hundred and fifty millions of dollars at an expense 
to the government of three-eighths of one per cent, on the dollar. 
The sale by the sub-treasuries will amount to one hundred and 
fifty millions of dollars at an estimated average expense of one- 
twelfth of one per cent. This reduces the average cost of ne- 
gotiating and distributing the whole loan of five hundred millions 
to twenty-three eightieths or a trifle over one-quarter of one per 
cent, on the dollar. 

But it is observable that the greater portion of the sales through 
the sub-treasuries are properly attributed to the demand created 
by the popular agency system. The loan had been before the pub- 
lic several months before the adoption of the agency system dur- 
ing which time there had been scarcely a perceptible demand for 
it. Within a very few months after the agency system was in- 
augurated the sales commenced running at one million per day, 
and, so soon as the popular machinery for the sale and distribution 
of the bonds was fully perfected and in operation, the great de- 
mand grew up in all parts of the country, swelling the sales to 
two millions and upward per day. The sub-treasury sales par- 
ticipated in the increased demand thus developed, and the gratify- 
ing aggregate above presented has been the result. It has thus 
been shown that judged by itself, its accomplishment and its cur- 
rent effects its success has not been dearly bought. At its com- 
mencement one of the highest authorities in finance said : " We 
are strongly impressed that the scope of the Secretary's plan is in- 
adequate to deal with such prodigious possible emergencies," as 

were then confidently anticipated. Yet it is accomplished — 


nearly the entire amount has been raised and in all the period of 
its action no serious pressure has resulted upon the money market, 
no exhaustion of the resources relied upon, no faltering or un- 
evenness in the flow of the thousand rills which fed the con- 
stantly swelling current of supply. This should satisfy the hon- 
est inquirer, for of all this he has the assurance of his own 
observation and experience. 

Another test by which to judge of the economy of the system 
employed in placing the loan is an examination of government 
exigencies in the past, at home and abroad, and the manner in 
which they were met, which for want of nearer resemblances in 
financial history may be compared, the grand differences and 
partial correspondencies alike serving for illustration. England in 
her great struggle with the Republic of France, with Napoleon 
and the United States was driven upon the money market for 
sums then deemed immense. Of her borrowing during the pe- 
riod from 1793 to 1816 there remained unredeemed in the latter 
year $3,309,000,000. The smaller portion of this sum sold before 
1801 at a discount of 42^ per cent, and the larger portion at 
38)^, an average discount of over forty per cent, upon the whole 
amount of three per cent, stocks and their equivalent at other 
and higher rates issued in the period. Her loans running through 
a term of twenty-three years are found to cost the government, 
first a fictitious capital of debt of forty dollars on the hundred, 
and resultingly an increase of interest upon the cash received of 
two per cent, added to the normal or in this case nominal gov- 
ernment rate of three per cent. Stated in brief the exigency cost 
the government as a borrower 62 2/3 per cent, of the stocks 
issued, and an increase of 66 2/3 per cent, on the rate of interest 
paid for it. 

Again in our own financial history we have these facts which 
are to the purpose of this comparison. In the year 1799 and 1800 
the United States made a loan of $6,481,700 for eight years at 
eight per cent, per annum. The capital reduced to its equivalent 
at six per cent, gives a discount of 17^ per cent. Of five loans 
made during the War of 1812 with Great Britain, from February 
8, 1813, to March 3, 1815, at six and seven per cent, respectively. 


the average discount suffered upon the principal of the aggregate 
amounted to 12.03 per cent., one of the loans in August, 181 3, 
selling at 11^ and another in 1814 at 19 8-10 per cent, discount. 
The twenty year loan of February, 1861, sold at 90^ per cent, 
on the hundred, and ten millions of Treasury notes issued in 
December, i860, and January, 1861, by Secretaries Thomas and 
Dix carried various rates of interest from six to twelve per cent. 
The total reduced to its equivalent in six per cents, puts the dis- 
count on the principal at a fraction above forty-five per cent. 

England in the crisis of her struggle with France and the 
United States during the years 1812 and 1813 borrowed five 
hundred and thirty-four millions at the heavy rates of discount 
and interest already mentioned, raising on these terms an average 
amount of eighteen and one-half millions of dollars per month 
during these years, and these were all her loans and credits of 
the period except floating debt. Now in the period from the 
first of May, 1863, when the 5-20 loan stood at only sixty-four 
millions it has been sold at an average rate of forty-eight and 
four-ninths millions per month, rising as high as fifty-three and 
seven-tenths millions per month at the close, the whole loan 
being sold at par. It is but just to add to this the other loans of 
the Treasury during this period which amounting to sixty-four 
millions swell the drain upon the resources of the loyal states to 
an average of fifty-five and one-half millions per month, during 
the last nine months of the 5-20 loan. 

The pressure of these five hundred millions upon our market in 
nine months against England's total of eight hundred and eighty- 
nine millions in four years exhibits a contrast incredible in the 
theories based upon all past experience. That something of all 
this is due to the policy and management of the loan independently 
of all other causes at work is made probable by the fact that it is 
the only loan, properly so-called, which has been negotiated at par 
with six per cent, interest. The six per cents, of the present Sec- 
retary sold in April, May and July, 1861, to capitalists and banks 
after the usual method of negotiation, amounting to sixty millions 
of dollars, sold at an average discount of 10.91 per cent. The 
7-30 loan of 1 861-2 was disposed of at par but reduced to six 


per cent, suffered a discount of 3.44 per cent. This was how- 
ever a popular loan with the machinery and agencies correspond- 
ing in some degree to those of the 5-20 loan. Embracing this 
cheapest of all the loans sold under the par of six per cent, stocks 
the Secretary since the commencement of the rebellion has dis- 
posed of two hundred millions at an average discount of 5.48 
per cent, but this one of five hundred millions at par. 

In conclusion allow me to congratulate you upon the final 
success of this loan, a loan which in the option reserved by the 
government as to the time of payment, and the consequent un- 
certainty of the period of the investment presented to the pur- 
chaser a strongly objectionable feature which at the outset ma- 
terially detracted from its popularity, but which notwithstanding 
has since met with a degree of popular favor never before ac- 
corded to any similar loan in this or any other country; and in 
view of the foregoing statements, it may be added, that whether 
considered with reference to its magnitude, to the instrumental- 
ities employed, to its universal diffusion among the people, to the 
steadiness and vigor it imparted to the prosecution of the war, 
to the encouragement it afforded our own people, to its significant 
moral effect upon other nations, or to the comparative net amount 
yielded to the Treasury upon the whole amount of bonds issued, 
this latest of your series of financial triumphs stands without a 
rival or a parallel in the history of the world. 

\\Ty respectfully your obedient servant, 

Jay Cooke. 

Before Mr. CofTroth could be replied to Mr. Cooke 
was to be attacked savagely in the United States Senate 
by Thomas A. Hendricks, Democratic Senator from Ind- 
iana, afterw^ard a Vice-President of the United States. 
On Friday, March 11, 1864, Mr. Hendricks in speaking 
upon a financial question referred to Jay Cooke and 
Company as "this rich banking firm which has been 
made rich by the drippings from the Treasury.'' "Per- 
haps a million dollars/' he continued, "has been made 


by the firm of Jay Cooke and Company by being made 
the special and exclusive agent of the Treasury Depart- 
ment in disposing of the bonds of the government which 
might have been disposed of by the ordinary machinery 
of the Department." ^ Mr. Hendricks's remarks af- 
forded John Sherman the opportunity for a conclusive 
rejoinder. The Senator from Ohio said : ^ 

Mr. President: 

I have a few words to say in reply to the remarkable and un- 
just attack made by the Senator from Indiana upon the Secretary 
of the Treasury. . . . The Senator attacks the Secretary of 
the Treasury, and makes a grave charge, which I am able to repel, 
and repel promptly. He says that the Secretary of the Treasury 
has enriched a private firm by favoritism, and he intimates and 
strongly insinuates that if this power is given the Secretary will 
further enrich that firm. This is a serious imputation, and I am 
very glad to be able to answer it. The firm of Jay Cooke and 
Company is an old, leading banking house in the city of Phila- 
delphia, in no way connected with the present Secretary of the 
Treasury, directly or indirectly, either by blood or marriage. 
That firm was not employed as agents, but its leading member. 
Jay Cooke, was employed as agent to negotiate the five-twenty 
loan only after other expedients had been tried and failed. He 
was selected because of his great activity and success in promot- 
ing the negotiation of prior loans, and for his undoubted stand- 
ing and credit. 

The remarkable success that has attended his agency fully justi- 
fies his employment. When the herculean task of providing 
money for our vast expenditure rested upon the Secretary he 
found himself crippled by legal restrictions contained in the sub- 
treasury law, and compelled to deal only with the few who con- 
trol money operations in New York and other Eastern cities. 
Most of these were patriotic men, and cheerfully aided the gov- 
ernment to the extent of their abilities. The first loans were 

* Congressional Globe, p. 1046. 
2 Ibid. 


made through their agency, but with what result? The long 
bonds, due in 1881, principal and interest payable in gold, were 
negotiated at about ninety-two cents on the dollar, and compared 
with previous loans this was considered a financial success. 
These very bonds are now worth one hundred and fourteen cents 
for the dollar in the same market. 

He also, through the same agencies and in the same markets, 
sold what are called the seven-thirty bonds at par. These bonds 
bear the rate of interest designated by their name, payable in gold, 
and are convertible into twenty year bonds, interest and principal 
payable in gold. Such was the condition of the money market 
when, in February, 1862, the five-twenty loan was authorized. 
This loan was far less desirable than either of those that preceded 
it. The rate of interest was limited to six per cent, and the 
principal was payable at any time after five years, at the pleasure 
of the government. This loan remained in the market for nearly 
a year without success, and during that time various efforts were 
made by the Secretary to negotiate it. He solicited oflFers in New 
York without success, or only at a considerable discount below 
par. Indeed, there was not sufficient volume of currency in New 
York to absorb the loan rapidly enough to supply the wants of 
the government. It became manifest that if taken it could only 
be by |X)pularizing it, by seeking purchasers among the mass of 
the people in all parts of the country, and no longer to rely upon 
the capital accumulated in the money centres. 

How was this to be done ? The Treasury Department was not 
adapted to the management of such a business. There were no 
officers who could be charged with it. All the bureaus were 
crowded, and even if more clerks had been employed the red tape 
of bureaucracy would not allow the energy and despatch re- 
quired for such an undertaking. Besides, the law regulating the 
receipts and disbursements of public money presented insuperable 
barriers to a direct negotiation of the loan between the Treasury 
and the people. By law nothing but money can be received at the 
Treasury. No bank bills, drafts, checks, certificates, or any of the 
varied forms of commercial paper could be received in the Treas- 
ury in payment of this loan, and without the agency of these it 


would have been impossible for the people to have transmitted 
their money to the Treasury without incurring an expense and 
risk in the form of express charges, exchange, danger of loss, and 
the like, that would have defeated the loan. 

When these difficulties became obvious, and only then, the Sec- 
retary resorted to private enterprise, and selected Jay Cooke, — a 
gentleman of established credit, of known energy — and con- 
tracted for the smallest compensation, it is believed, ever paid for 
negotiating a large loan by any government. To try the experi- 
ment, the amount to be negotiated was first limited to $10,000,000, 
and afterwards extended as it proved successful. Under this ar- 
rangement was organized the vast machinery that resulted in en- 
listing every bank and banker, and almost every newspaper in the 
United States, in advocating the loan. The agent shared his com- 
mission with any responsible bank, banker or individual who 
would aid him and advertise the merits of the loan in all news- 
papers without regard to politics, until the five-twenty loan and its 
merits stared in the face of the people in every household from 
Maine to California. 

Thus was established this agency; and what was the result? 
The people everywhere, in all parts of the country, came with 
their little earnings, some more, some less, and poured them into 
the Treasury, taking in return the pledge of the government to 
repay their loans. The money of the people in little streams and 
rivulets poured into the national Treasury, and thus sustained 
the national life. Sir, it was only through a private agency that, 
under existing laws, the Secretary could reach out and receive 
these loans of the people ; and he would have been wanting in the 
first requisite of his office if, crippled by precedent or controlled 
by capital, he had failed to make the effort. 

But the Senator says that an enormous commission was given 
to Jay Cooke and Company, and that it was done secretly; that 
the bankers in the West did not know that Jay Cooke and Com- 
pany received this commission. The Senator is mistaken. The 
amount paid to Jay Cooke was pubHshed in the newspapers ; was 
known as publicly and broadly as the five-twenty loan; and not 
only so, but every bank and banker, and every agent who was 


employed in the negotiation of the loan, received two-thirds of 
the very commission that the Senator talks about. The entire 
expense to the United States of negotiating the loan was limited 
to three-eighths of one per cent., and every bank and banker 
employed received one-fourth of one per cent., so that there was 
left to Cooke only one-eighth of one per cent. 

Out of the commission allowed the agent paid all the expenses 
of this loan. Let us see the nature of these expenses. He paid 
a large part of an extensive system of advertising, a part being 
paid by the local agents. He paid for the distribution of pam- 
phlets and tracts, and the postage on them, spread broadcast over 
the country. He paid the express charges for transmitting the 
bonds from this city to the most remote parts of the country, and 
in sums so small that in many cases these charges alone far 
exceeded the entire commission. He paid the large expenditure 
caused by the management and distribution of this loan, involving 
frequent correspondence with twenty-five hundred agents, the 
postage and telegraphing alone amounting to large sums. He 
organized a corps of business men and clerks, for each of 
whom he was responsible, and who, from this fact, and from 
the opportunity and temptation of peculation, he had to select with 
great care and at large salaries. I have no data from which to 
state these expenditures, but I leave each Senator to conjecture 
the amount. 

Aside from these expenses, all of which were paid out of the 
commission, remember the fearful risk this agent assumed. He 
not only staked his personal fortune, said to be large, but he was 
required by the Secretary to give, and did give, additional se- 
curity in the form of a bond and collaterals to the amount of 
more than a million of dollars. By the necessities of the busi- 
ness he was compelled to receive as money all forms of com- 
mercial paper, drafts, checks, and certificates, drawn in remote 
states and villages, and to negotiate and collect these by his own 
personal responsibility. He could not pay these into the Treas- 
ury, but was required to pay money, " lawful money of the 
United States," and the subscription was only complete when 
this actual money was paid into the Treasury. 


Bank bills would not answer, and we know from the public 
journals that United States money, or greenbacks, were every- 
where held in preference to bank bills or drafts. And yet he had 
to make the conversion at his own risk, and if any loss occurred 
by counterfeit bills or broken banks, by forgery or fraud, he had 
to deduct it from their one-eighth of one per cent, commission. 
It was this difficulty of using bank or commercial paper, in deal- 
ing with the United States, that made the employment of inter- 
mediate private agencies in negotiating this loan not merely a 
choice of expedients, but an absolute necessity, and for this pro- 
vision of law the Senator is far more responsible than I, as I be- 
lieve he has always supported the sub-treasury law. 

Again, sir, in the change of commercial paper into United 
States money there was often necessarily a loss of interest. This 
might not be noticed in the transaction of an individual, but when 
it is remembered that one week's interest is equivalent to the net 
commission received by the agent, it will be perceived that this 
necessary loss is important. All these facts, with many others 
that do not now occur to me (for this debate is sprung upon me), 
entered into the view of the Secretary when he made this ar- 
rangement, and I submit if it is just or fair to arraign him upon a 
charge involving his integrity when it is apparent that in the 
whole transaction he studiously guarded the public interests and 
secured a successful loan on the most favorable terms. 

It must be remembered that the agent did not get commissions 
on all of the five-twenty loan. One hundred and forty-seven 
million five hundred and sixty-seven thousand four hundred dol- 
lars of it was subscribed directly with the Assistant Treasurers 
and depositaries, for which, though secured mainly through his 
exertions, he received no compensation at all. The subscriptions 
made through the general agent amounted in exact figures to 
$361,827,950. The aggregate expense incurred in disposing of 
this sum is $1,331,372.84, of which one-third was paid to the gen- 
eral agent for his compensation. The loan reached, in the aggre- 
gate, $510,139,400, and the total expense was $1452,598.17, or a 
fraction less than three-tenths of one per cent., or eighteen days' 
interest on the loan. And for this cost to the gpvemment the 


agent incurred fearful risks, and paid enormous 8ums for adver- 
tising, telegraphing, expressing, postage and clerk hire, and 
placed the money in the Treasury without the loss to the United 
States of a single dollar, the delay of a single day, or the inter- 
ruption of any of the ordinary business of the Treasury Depart- 

Mr. Johnson. — Did they pay all the expenses out of their 
percentage ? 

Mr. Sherman. — They paid all the expenses out of their com- 
mission. It cost the United States not one dollar, not one cent, 
except the commission of three-eighths of one per cent., two- 
thirds of which was allowed to the local agents all over the 
United States. The Senator from Indiana says this was done 
secretly. I will venture the assertion that in the city in which 
he lives every bank and banker was employed, and knew all about 
the terms of the loan, and received two-thirds of the commission 
for their own services. 

Mr. President, grave charges of this kind ought not to be made 
against public servants unless there is good ground for them. I 
say that Governor Chase never resorted to this admirable mode 
of negotiating a loan until all other means had been tried and 
failed. I will further say that no loan has ever been negotiated 
by any government in the world at a less expense than that at 
which this loan has been placed in the hands of the people. 

Mr. Johnson. — Was it all taken at par? 

Mr. Shermx\n. — It was all taken at par, every dollar of it. 
I have examined the loans made by the British and French gov- 
ernments, and I find that the ordinary allowance there in the 
form of expenses is from one-half of one per cent, to one per 
cent., and besides, various facilities are allowed. The saving in 
the mere matter of exchange to the Government is equal to one- 
half of one per cent. The saving of interest was very great. 
These bonds were never issued for some days and sometimes 
weeks after the Government actually received the money. They 
were dated as of the time when the money was paid into the sub- 
treasury. All the loss of exchange, all the loss in transmitting 
the money to the government, fell upon private individuals, or 


upon these agents; and that alone, if the business had been 
carried on by the Government, would have amounted to fully 
one-half of one per cent. 

I trust, therefore, that the Senator from Indiana will now, in 
the face of these statements, known to every person who has 
taken any part in negotiating this loan, withdraw the insinuation 
he has made against the Secretary of the Treasury. So far 
from favoring the General Agent to the detriment of this public 
service, it will be found that he has held him to a strict account- 
ability, and I shall be very willing to have any inquiry made as 
to the negotiation of the loan, and whether he has realized, as the 
result of his labor and risks, more than a reasonable compensa- 
tion. He was a wealthy banker in the city of Philadelphia; 
his fortune was made before this war commenced. 

The Secretary employed him precisely as he would employ 
any other agent of the Government. He was induced to employ 
him because he was active, efficient, able, and expert in the nego- 
tiation of the seven-thirty loan, and he only employed him after 
every other expedient had failed ; and the result of this employ- 
ment was a most admirable and wonderful success. Sir, if two 
years ago, when we authorized the five-twenty loan, any man 
had then said to me that the whole of that loan would be taken 
at par, and that our bonds would now be above par, I should have 
believed it to be impossible ; and yet such has been the result. 

The Senator from Indiana says not one kind word of the 
Secretary of the Treasury for maintaining the credit of this 
Government through all this period of unparalleled expenditure. 
He has not for that officer one single word of commendation, 
fie merely throws out an insinuation that the Secretary has en- 
riched private individuals at the expense of the Government ; 
that he has selected private citizens, and at the expense of the 
Government has heaped treasure upon them. This is totally 

I ask him now in candor, what other course could have been 
pursued. Suppose Mr. Chase had advertised in the city of New 
York the five-twenty loan, how much of it would have been 
taken? New York only contains about one-seventh of the cir- 


culating fluid of the country, or, if I may use that term, the blood 
of the country, the money of the country; the plan of negotiat- 
ing only in the city of New York would have been like that 
formerly adopted in France, of only negotiating in the city of 
Paris. It was Louis Napoleon, and to him I give much more 
credit for ability than do many of my countrymen, who appealed 
from the Paris Bourse to the people of France. He resorted to 
precisely the same expedient that was resorted to here. He in- 
vited loans from all parts of France ; he took one hundred francs 
from the poorest laborer in any portion of France, and gave him 
the Government's rentes for it. So the Secretary of the Treasury 
instead of going into the glutted market of New York, where 
business had been accumulated to a great extent by the war, left 
that field and gave the people of New York only the same advan- 
tage which was given to all other citizens. 

The Secretary selected an agent who, from his purity of 
character, from the fact that he had held no office of the Govern- 
ment, from his active efficiency in negotiating former loans, from 
his undoubted character and standing in the city of Philadelphia, 
where he had lived for over twenty years, as a successful banker, 
would be likely to succeed in distributing the loan and inducing 
people to take it. The Secretary selected him, and upon a com- 
mission announced beforehand to be divided by him with all the 
different banks and agents throughout the country he negotiated 
the five-twenty loan. I say that if the Secretary had pursued 
any other plan, if he had gone to New York and advertised the 
loan in the ordinary form, the result would have been that the 
five-twenty bonds would have gone down precisely as the bonds 
of England did, to forty, fifty, or sixty cents on the dollar. 

Mr. President, I do not know that I ought to pursue this 
argument further. I could not hear such charges and say less 
in vindication of the Secretary of the Treasury. In regard to 
this loan, as well as to all other operations of the Government with 
which I am familiar, he has conducted his important business 
with a single eye to the public credit and honor. Whenever any 
imputations are made on a public servant that I know are unjust. 
I cannot help but repel them; and I trust that the Senator hnm 


Inaiana, on the statement I have* made, if he is satisfied with it, 
will at once say so. 

Mr. Johnson — Does the Senator know how many persons 
have subscribed to the five-twenty loan? 

Mr. Sherman — There were twenty-five hundred agents. The 
precise number of persons interested cannot be stated, for many 
of the subscriptions were by banks; but I have no doubt that 
three million persons are interested in the five-twenty loan. The 
stockholders of every bank which subscribed for it are interested, 
and I do not know but that my estimate is too small. I know 
that in the portion of Ohio where I live there is scarcely an 
independent farmer or mechanic who has not more or less of the 
five-twenty loan. It has been taken by servants, laborers, me- 
chanics, persons in every condition and degree of life, poor and 
rich. This is one of the great benefits of the system adopted. 
If this loan had been sold in gross in the city of New York, as 
former loans were negotiated, it would have been held there in 
bulk, or transported to Europe and made the basis of large 
importations. As it is, it is held by our own people. 

I doubt now whether of the $1,500,000,000 of our indebtedness, 
$200,000,000, or even $150,000,000 of it is held abroad. That 
which does not bear interest is our common circulating medium, 
the basis of exchange. The five-twenty loan is nearly all held 
in this country, in small sums and well distributed. So little of 
our legal-tender circulation is held in the city of New York, that 
when it became necessary last November to sell some $30,000,000 
of what are called the five per cent, interest bearing notes, there 
was not United States money enough in the city of New York 
to pay for them, and the banks had to appeal for terms and time 
in order to pay the money into the Treasury. And, sir, if the 
whole five-twenty loan had been thrown upon the market of 
New York, either at one time or fast enough to carry on the 
operations of this Government, there would not have been money 
in the city of New York to enable the Government to receive 
the proceeds of the loan. The Senator from New York, I know, 
will bear me witness in this statement. 

No favoritism was shown in this matter. The banks and 


bankers of New York, of Cincinnati and St. Louis, the citizen 
of Iowa, the citizen of California, the citizen of New York, were 
all placed on the same footing. The plan adopted required the 
agent to deliver the bonds in the state of Iowa just as well as 
in the state of New York. If a person in the town of Des 
Moines subscribed $1000, the agent was required to send his 
bond to him in Des Moines, although the express charges upon 
that bond would be more than the whole amount of commission 
received both by the local bankers and by Jay Cooke. 

In addition to that, the local agent who was interested in the 
transaction took lawful money wherever the subscriber might be, 
Any citizen in any part of this country might pay to the local 
agent his money, however small the amount or remote the place, 
and in due time would return to him at the place, free 
of cost, a bond of the United States for the amount. The 
/effect was to equalize exchange, to break down the old discrimi- 
nations in exchange between the East and the West. This was 
vital to us in the western country. If any other arrangement 
had been adopted, a citizen of the state of Indiana would have 
been compelled to pay one per cent, exchange in order to have 
his money turned into one of these bonds. 

I will call the attention of the Senator from Indiana to the prac- 
tical working of the old system. If a citizen of Indianapolis, un- 
der the old system, desired to invest any money in a bond of the 
United States, he would have been compelled to first buy a bill 
of exchange, for which he would have paid from one to one-and- 
a-half per cent, premium. Then he would have to send that 
bill of exchange to a broker in New York, and that broker 
would have charged him from one-eighth to one-quarter of one 
per cent, for converting the bill of exchange into a Government 

Thus the citizen of Indiana, under the operations of the old 
plan, would have been compelled to pay nearly two per cent. 
to loan his money to the United States; but under the system 
adopted by the Secretary, at an expense that was trivial to the 
United States, every citizen might convert his money into a bond 
of the United States, delivered at his own door. There has been 


nothing in the history of this war so remarkable in its successes 
as the distribution and negotiation of this loan; and when the 
Senator says the Secretary of the Treasury did all this to enrich 
a private firm, he certainly speaks in ignorance of the true condi- 
tion of public affairs and of the mode and manner of negotiating 
the loan. 

For the reply to the CofFroth resolution of the House 
the papers were well prepared and studied with the aid 
of Henry Cooke and George Harrington, the result be- 
ing a definitive statement fully explanatory of the opera- 
tions. The Secretary warmly complimented Mr. Cooke 
for, and supported him in all his exertions in behalf of 
the government, and flatly asserted that without his 
services "neither the army nor the navy nor the general 
creditors of the government could have been paid." It 
was a work that could not have been "as successfully 
performed nor indeed performed at all by the Treasury 
Department/' The letter was as follows: 

Treasury Department, 

April I, 1864. 
Hon. Schuyler Colfax, Speaker of the House of Representatives: 

Sir : — I have had the honor of receiving from the House of 
Representatives a copy of the following resolution: 

" Resolved, That the Secretary of the Treasury be requested to 
report to the House what have been the services of Jay Cooke 
& Co. to the Government in the sale of United States securities, 
and what have been the rate and whole amount of compensation 
therefor; also, whether said services might not have been as 
successfully performed by the Treasury Department itself; also, 
what sums of money, if any, have been paid out of the Treasury 
for advertisements ordered by Jay Cooke & Co." 

Before proceeding to answer these inquiries, it is proper to say 
that Jay Cooke & Co. have never been employed to render any 
services to the Government, but as Mr. Jay Cooke, of that firm, 


has been employed as agent for the sale of United States bonds 
and Treasury notes, the resolution will be answered as if it had 
been prepared in reference to him individually. 

The whole of the five hundred millions five-twenty loan being 
now taken, and the accounts connected with it closed, I respect- 
fully submit the following statement in response to the resolution, 
without awaiting the completion of the delivery of the bonds 
subscribed for in excess, which will involve no additional payment 
on account of compensation or expenses. 

The first inquiry requires a statement of the services of Jay 
Cooke in the sale of United States securities, and of the rate and 
amount of his compensation therefor. 

Mr. Cooke's first services were as agent for the sale of three 
years* Treasury notes, popularly known as seven-thirties. 

When negotiating the first loan with the Associated Banks of 
New York, Boston, and Philadelphia in July, 1861, of fifty 
millions of dollars for three years' seven-thirty Treasury notes, 
the Secretary stipulated to open subscriptions throughout the 
country to effect the sale and distribution of these notes by 
agents acting under the direct supervision of the Department, 
the proceeds of such sale and distribution to be paid over to the 
banks in reimbursement in whole or in part of their loan, in order 
to secure the prompt taking of a second loan of equal^ amount. 
In fulfilment of this stipulation, the Secretary, in addition to 
the regular officers of the Department, appointed one hundred 
and forty-eight agents, of whom Mr. Jay Cooke was one, to re- 
ceive subscriptions for the sale of the seven-thirties, supplied them 
with printed blank books of subscription, blank certificates of 
deposit, blank forms for correspondence with the Department, 
and envelopes with printed addresses thereon. In addition to 
these expenses and the expenses of the necessarily increased 
force of clerks employed, he paid these agents one-fifth of one 
per cent, on the first one hundred thousand dollars obtained 
by them respectively, and one-eighth on all sums in excess, and 
allowed for advertising a stipulated sum, varying according to 
locality, but in no case exceeding one hundred and fifty dollars. 
The several agents thus employed returned subscriptions in 


the aggregate amounting to $24,678,866.84, of which Mr. Jay 
Cooke obtained $5,224,050, or more than one-fifth of the whole, 
for which he was paid the fixed percentage, amounting to $6,680.- 
06, and, for advertising $150, making his total allowances for 
the sale of seven-thirties $6,830.06. 

Mr. Cooke, at the close of his labors in obtaining subscrip- 
tions to the seven-thirties, and on making his final payments into 
the Treasury, submitted an account, substantiated by vouchers, 
showing disbursements by him for advertising amounting to 
$3,041.44, not including sums paid for which he had no specific 
vouchers. He was allowed only $150, or less than one-twentieth 
of his expenditure. 

The services of Mr. Cooke, in connection with the seven- 
thirty loan, were valuable and important, but of little magnitude 
compared with those rendered in the negotiation of the loan of 
five hundred millions of dollars for bonds commonly known as 
the " five-twenties." When this loan was authorized by Con- 
gress, many experienced and able financial men expressed their 
belief that it would be impossible to negotiate bonds redeemable 
after so short a period as five years, and bearing an interest of 
only six per cent., and for a time appearances were decidedly 
against the success of the loan. 

Under. the law, every holder of United States notes had the 
right to convert them at his pleasure into the five-twenty bonds 
at par. A privilege which can be used at any time is often not 
used at all, and it soon became clear that voluntary conversions 
would supply only a small proportion of the large sums required 
for the disbursements of the war. To excite and promote a 
better disposition, the assistant treasurers, designated deposi- 
taries, and special agents were authorized to receive deposits of 
notes, and issue certificates entitling the depositors to bonds 
bearing interest from the date of deposit. Still, conversions 
lagged, and were altogether inadequate to the demands upon 
the Treasury. 

It was indispensable that these demands should be an- 
swered with the least possible delay, and the Secretary endeav- 
ored to ascertain the best terms on which the bonds could be ne- 


gotiated by sales. Careful inquir}' was made through the as- 
sistant treasurer at New York, and other experienced persons, 
and it was ascertained that negotiation could not be effected at 
higher rates than from 97 to 98 cents for a dollar, which would 
involve a loss on each hundred millions of the loan of from two 
to three millions of dollars. 

Unwilling to submit to this loss, the Secretary, in October, 
1862, determined to appoint a general agent, with authority to 
appoint sub-agents throughout the whole country, for whom he 
should be personally responsible, and in this way to organize a 
direct appeal to the whole people. He accordingly selected as 
general agent Mr. Jay Cooke, who was recommended for pref- 
erence by his responsibility, by his integrity, and by his energetic 
and successful services in the negotiation of the first national 
loan, and committed the whole work to him. It was agreed that 
his commissions, for services and to cover disbursements, should 
be one-half of one per cent, on the first ten millions, and three- 
eighths on subscriptions beyond that amount. Of these eighths, 
Mr. Cooke was bound to pay one-eighth to subscription sub- 
agents, another eighth to travelling agents and for advertising, 
and other expenses of making the loan as widely and favorably 
known as possible. He was allowed to retain the other eighth 
as compensation for his own labor and risk, and for expenses 
chargeable to his own proportion. 

His responsibility covered all acts of his sub-agents until pay- 
ment into the Treasury of all moneys subscribed, and delivery 
to subscribers of all bonds subscribed for. No liability and no 
duty, except that of furnishing the bonds, was assumed by the 
Government, while to insure the faithful performance of the 
duty of the general agent, and the full satisfaction of all demands 
upon himself and his sub-agents, bonds were required and given 
in the aggregate sum of six hundred thousand dollars. 

Notwithstanding the magnitude of the task imposed upon 
him, the general agent had no monopoly in the disposal of the 
loan. The Treasurer, the assistant treasurers, and several of 
the designated depositaries were also directed to use their best 
endeavors to obtain subscriptions, and were authorized to allow 


one-eighth, and, in some cases, one-fourth of one per cent, to 
purchasers for resale. 

Having undertaken the work, Mr. Cooke proceeded to organize 
a general system of agencies. For a time the result seemed 
doubtful. When, however, at the next session of Congress, the 
absolute right of conversion was limited to the ist of July, 1863, 
and the system of sub-agencies had been thoroughly organized 
and extended throughout the country, subscriptions gradually 
increased, until, at length, the unwearied labors of the general 
agent and his sub-agents were crowned with complete success. 
Not only was the whole loan taken but subscriptions were made 
on the day it was finally closed for nearly eleven millions of 
dollars in excess of the amount authorized ; for which excess the 
general agent was allowed no compensation. 

It is impossible to exhibit in detail the services thus rendered, 
or to estimate their value in money. It may be sufficient to state 
that the number of sub-agents employed by the general agent, and 
for whom he was responsible, was about twenty-five hundred; 
that the work of the agency extended into almost every county 
and town of the loyal States, and among all classes of the popu- 
lation; that its fruits were subscriptions for five-twenty bonds 
amounting, in the aggregate, to the sum of $361,952,950; and 
that without these subscripions neither the army nor the navy, 
nor the general creditors of the Government could have been paid. 

The benefit of the work was not limited by its direct results. 
The interest in the loan, excited by the efforts of the agent and 
sub-agents operated powerfully upon subscriptions with the as- 
sistant treasurers and the designated depositaries. These sub- 
scriptions amounted in the aggregate to $148,823,500, of which 
$92,178,300 were subscribed by purchasers for resale and $56,- 
645,200 for direct investment. 

The whole compensation to the general agent and sub-agents 
for services and for all expenses incurred in obtaining and pay- 
ing over subscriptions, amounting, as already stated, to $361,952,- 
950, was $1,350,013.15, of which $435,700.31 was paid to the gen- 
eral agent as compensation for responsibility, for services, and 
for expenses chargeable upon the one-eighth allowed to him. 


To the cost of the agencies, in order to ascertain the total ex- 
penses of the loan, must be added the commissions allowed to 
purchasers for resale, by the assistant treasurers and other officers 
of the Government; these commissions amounted to $122,190.39, 
making the entire cost of the whole loan $1472,203.54. This cost 
is a little less than three-tenths of one per cent, (or eighteen days' 
interest) on the whole amount, and, as is believed, is less than 
the cost of any other great loan, either American or English, 
heretofore negotiated. 

The Secretary has already stated that the best terms he was 
encouraged to hope for in case of resorting to the negotiation of 
fifty millions with capitalists, in the ordinary way, were from 
ninety-seven to ninety-eight cents for a dollar, and there was 
every reason to believe that for the additional sums required to 
complete the loan he would be obliged to submit to much more 
disadvantageous rates. Had he negotiated fifty millions at 
ninety-seven and a half per cent, the cost of one-tenth of the loan 
would have been $1,250,000, a sum nearly equal to the whole 
cost of the whole actual loan of $510,776450 upon the plan 
actually adopted. Had he attempted and succeeded beyond rea- 
sonable hope in negotiating the whole at the same rate, the cost 
would have been $12,500,000. 

The foregoing statement, it is hoped, sufficiently answers the 
inquiries, what have been the services of the general agent to the 
Government in the sale of United States securities, and what was 
the rate and amount of compensation therefor. 

The other inquiries of the resolution may be briefly answered. 

No sums of money have been paid out of the Treasury for ad- 
vertising ordered by Jay Cooke & Co., and none for advertising 
ordered by the general agent, except as above stated. 

It only remains to add that the Secretary is clearly of opinion 
that the services rendered by the general agent and the sub- 
agents could not have been as successfully performed, nor, in- 
deed, performed at all, by the Treasury Department. 

I am, very respectfully, your obedient servant, 

S. P. Chase, 
Secretary of the Treasury. 


The last scene in this drama was the following letter 
from Jay Cooke to Secretary Chase : 

I have the honor to state that, after deducting from my com- 
mission for negotiating $361,952,950 of the five-twenty loan, the 
amount expended by me in promoting the success of the loan over 
and above the amount allowed me for that purpose, and deducting 
also $48,000 bonds lost in transit and otherwise unaccounted for 
(a portion of which I hope to recover) I find my actual net com- 
mission reduced to $220,054.49 which is somewhat less than one- 
sixteenth of one per cent, on the whole amount of subscriptions 
obtained by me. 




A Study of the early life of Jay Cooke has already 
afforded an insight into the crudity and dangers of the 
banking system which prevailed in the United States 
prior to the Civil War. With frequent suspensions of 
specie payments and unregulated note issues, the value 
of the currency depending upon the continued solvency 
of the organizations whose names stood upon its face, 
and the assurance that it was not the work of deft coun- 
terfeiters, there was general uncertainty and widespread 
distrust, fatal to proper business relationships. Some 
1 ,600 banks acting under various state charters were in 
operation in the United States at the outbreak of the 
war. They had a capital of about $430,000,000 and 
their circulation in bills and notes was approximately 
$210,000,000. Upwards of $110,000,000 of the capital 
and $50,000,000 of the circulation adhered to banks in 
the seceded Southern states,^ which of course left the 
North a large but very inadequate sum for the private 
and public purposes of the war in the hands of these un- 
suitable agents. Jay Cooke writes in his Memoirs of the 
state banks : 

"There were throughout the country, north, south, 
east and west, banks working under charters derived 
from the several states, with almost as many systems as 

^ Schuckers, p. 282. 



the number of states. Circulating notes issued by these 
banks were in some states partially secured by safety 
fund systems, but in the great majority of instances 
their value depended entirely upon the prosperity, good 
management and honesty of the bank issuing them. In 
most cases a bank could issue circulation far beyond the 
amount of its capital stock. I have known instances in 
which banks have issued eighteen or twenty times the 
amount of their capital, and so far as the public was 
concerned with no other security than the good faith of 
the institution. 

''Confusion worse confounded was the order of the 
day. Exchanges upon Philadelphia, New York and 
Boston, when procurable, rated all the way from one to 
ten and fifteen per cent, premium according to the lo- 
cality. Notes were printed upon every variety of paper 
and no two banks issued bills of similar appearance. It 
was generally the case that bank notes current in one 
state could not be circulated in the other states, and it 
was impossible for any one but those skilled in handling 
money in vast quantities to detect the innumerable coun- 
terfeits and altered notes which were in circulation. 
The banks were breaking constantly and in many in- 
stances circulating notes became almost worthless. 
Fifty millions of dollars per annum, it is safe to say, 
would not cover the loss to the people of this country 
growing out of broken banks, counterfeits, altered notes 
and cost of exchange between different points. A hun- 
dred excuses were available and the most trusted mer- 
chants of the west and south did not think it necessary 
to be prompt in the payment of their eastern obligations, 
often pleading the scarcity and high prices of exchange 


and expressing their belief that in a short time prices 
would be more reasonable." 

Secretary Chase was not long in making the discov- 
ery that these state banks were not equal to the tasks 
to be imposed upon them in a great national emergency, 
and when they suspended specie payments and failed to 
fulfil their engagements with the Treasury Department 
in reference to the third loan of $50,000,000 in 1861 he 
had practically abandoned hope of receiving further 
aid from this source. Not being under national, or in- 
deed any central direction, they were so many separate 
fiscal units, useless to the government after their first 
outburst of patriotic enthusiasm. If the War Depart- 
ment had been compelled to treat with the states for 
troops and supplies as in the Revolution, receiving their 
quotas of soldiers, wheat, fodder, cattle, horses and 
woolen cloth, the result can be imagined. Not much 
less essential to the successful conduct of the war was 
the exercise of some general direction of banking insti- 
tutions and their notes, if the Treasury Department, 
and through it the government at large, were not to be 
condemned to ruin. Mr. Chase took this subject in hand 
in his first report to Congress in December, 1861, and 
urgently advocated the organization of a chain of na- 
tional banking associations which could issue money 
authenticated by the nation, and secured by United 
States bonds deposited as a guaranty of the redemption 
of their notes, and which might otherwise serve the gov- 
ernment in a variety of useful ways. However uneco- 
nomical and imperfect this system may seem to some 
higher monetary authorities at this day it was admit- 
tedly an important advance over the existing state bank 


system and one that has resulted in large advantages to 
the American people. 

As might have been expected Secretary Chase's radi- 
cal suggestion was met by many loud expressions of dis- 
sent and hostility. Although he drafted and submitted 
a bill, embodying his ideas on this subject, it seems to 
have had but one sincere friend in the Committee on 
Ways and Means, Mr. Hooper of Massachusetts, and 
but few more in Congress upon a canvass of the House 
and the Senate. Mr. Cooke's friend, George R. Messer- 
smith of the Chambersburg Bank, asked him while in 
Washington to see Mr. Chase and persuade the Secre- 
tary not to "swallow up the banks.'* This was the ap- 
peal of but one relatively mild and uninfluential repre- 
sentative of the system it was hoped to overthrow. That 
it was to be a ''swallowing up" process the state bank- 
ers were fully convinced. 

The session of i86i~2 passed without any action in 
this sense by Congress which preferred the legal tender 
experiment, and the Secretary was left to repeat his 
recommendations with more fullness and emphasis in 
his report of December, 1862. Henry Cooke who so 
faithfully echoed Mr. Chase's views wrote to Jay Cooke 
on November 26, 1862, anticipating that report: 

You are already well aware of the Secretary's views in refer- 
ence both to currency and to loans. Those views have under- 
gone no change. Indeed I am confident that he is better satis- 
fied of their correctness now than he was a year ago, and that he 
will again urge them upon Congress in his report They may 
be briefly stated thus: As to loans he prefers to raise money 
by the issue of bonds (say 5-20S) rather than by the issue of 
circulating notes. He issued the notes nov^ in circulation (both 
" old demands " and " legal tenders ") as it were " under pro- 


test," or as an alternative to the other plan recommended by him 
— that is the establishment of a uniform currency throughout 
the United States, issued by corporate banks, based upon a cer- 
tain percentage of specie and the pledge of Federal stocks. His 
bank bill, a copy of which you have, embodies his general idea. 
This bank circulation is to be receivable for all public dues except 
the duties on imports and exchangeable for bonds of the United 
States. He would prefer such a system of bank currency to 
the direct issue of circulating notes by the government, but in 
the absence of such an issue he has been compelled to resort to 
the latter. As to currency the views of the Secretary are pretty 
well covered by the foregoing. Of course he will propose no 
violent measures to drive out the existing bank circulation, but 
will effect that object gradually by a tax of one or two per cent, 
thereon, and by the inducements offered the banks to make the 
change. By the system proposed two important objects will be 
attained: ist. Uniformity in the currency throughout the coun- 
try and, 2nd, a large and permanent market for government se- 
curities. A third result will incidentally follow — the taxation 
will gradually (but not in a ratio to produce a sudden collapse 
or crash) reduce the present excessive circulation of weak banks 
and replace it to the extent demanded by the real wants of the 
country by a safer, sounder currency which can be used by the 
government, and in transactions with the government, as well as 
by the people. I am satisfied (though I have no special authority 
for saying so) that I have given a correct general outline of the 
Secretary's views, as inferred from different conversations with 
him, from a knowledge of his antecedents, and of his anxiety 
that his bank scheme should receive the sanction of Congress. 
But whether the policy indicated will be the one pursued is 
another question which rests with Congress to determine. It 
may be that Congress will differ from the Secretary, and prefer 
a further issue of legal tenders, or some other government note. 
Tn that event he will have to do as he can and not as he would, 

Mr. Chase, as Henry Cooke predicted, unreservedly 
urged the national banking system upon Congp"ess in 


December, 1862, but without assurance that his advice 
would be more respectfully received than it had been in 
1 861. Of the situation at this time in reference to this 
subject Jay Cooke writes in his Memoirs : 

"Mr. Chase frequently mentioned the matter and his 
anxiety on the subject at times when I met him in Wash- 
ington, but I was indisposed to aid him because I felt 
that the banks with which I was in close connection were 
doing much to facilitate my government loan operations, 
and that under the present conditions it would be hazard- 
ous to make war upon the state banking system. I 
realized of course that a change would be a vast benefit 
to the country, and that as soon as possible such a 
change from a state bank to a uniform national banking 
system should take place. 

"I was peculiarly well posted as to the evils of the old 
system, and convinced that the new would correct 99 
per cent, of these evils and create and make a market 
for a large amount of our government bonds; but still 
I hesitated to commit myself at that time and imder all 
the circumstances to such a radical change. Mr. Chase 
again urged me to join him in the effort to establish the 
new system and, seeing that he was so earnest in the 
matter, I obtained from him a copy of his bill, and my 
brother Henry and I sat up until midnight reading it 
over and discussing it. It was a very voluminous bill 
and required a good deal of pruning. Next morning 
we went to Mr. Chase and told him that we had de- 
cided to take up the matter and endeavor to pass the 
measure. Having once committed ourselves, and hav- 
ing a vast number of agents through the country, our 
government loan agency expending vast sums with the 


newspapers for advertisements, we felt that we had a 
right to claim their columns in which to set forth the 
merits of the new national banking system. I suggested 
the substance of editorials some of which I wrote, but 
they were mostly written by my brother who was an 
old editor. These were changed and freshened with 
new arguments almost daily, and for six weeks or more 
nearly all the newspapers in the country were filled with 
our editorials condemning the state bank system, and 
explaining the great benefits to be derived from the na- 
tional banking system now proposed. We appealed to 
senators and members of Congress for unanimous con- 
sent to a change which would accomplish so much for 
the country at large. We elaborated the numerous and 
weighty reasons which could honestly be given, and 
daily laid upon the desks of the members copies of the 
papers published in their districts, and placed in Wash- 
ington papers whole pages of extracts. The result of 
these efforts, together with personal appeals to the sena- 
tors and representatives, resulted in a few weeks in the 
passage of the bill." 

Henry D. Cooke took much credit to himself for the 
part he had played in the enactment of this measure and 
he was a factor of undeniable importance in converting 
Senator Sherman to the Secretary's views. On Janu- 
ary 23, 1863, Henry Cooke wrote "in the strictest con- 
fidence" to Jay Cooke: "Governor C expressed the 

greatest anxiety that Sherman should take hold of his 
bank bill and asked me to use my influence with him to 
do so. I had an interview with S. last evening and 
again to-day. Sherman has not positively promised to 
champion the bill, but from his talk to-day I think he 


will do it. I am sure he will do so if Governor C. will 
consent to two slight modifications, viz. : restricting the 
charter (which at present is perpetual) to twenty years 
and, to prevent inflation, limiting the amount of circula- 
tion to be issued and apportioning it among the states. 
I will get a definite answer from Sherman to-morrow 
and meanwhile am to see the Governor about S.'s pro- 
posed modifications." 

On February 12th when the result was assured 
Henry Cooke wrote : "It will be a great triumph. Jay, 
and one to which we have contributed more than any 
other living men. The bank bill had been repudiated by 
the House and was without a sponsor in the Senate, and 
was thus virtually dead and buried when I induced Sher- 
man to take hold of it, and we went to work with the 
newspapers. I am very sure that the Governor appre- 
ciates our eflForts and knows (though he can never know 
fully) the value and efficiency of our services." 

Undoubtedly the passage of the law, with the estab- 
lishment of the first banks under it to demonstrate its 
practicability, was largely due to the Cookes who 
labored in its behalf with untiring devotion, Henry as 
the lobbyist and editor, and Jay as the famous and 
powerful financier, willing and ready to stake his repu- 
tation upon the advantages of the new system. How 
public feeling on the bank question was revolutionized 
through the use of the agencies which Jay Cooke had 
organized to promote the sale of the 5-20 loan is indi- 
:ated by a letter from a Washington correspondent of 
:he Philadelphia Press, dated February 13, 1863: "At 
irst the banking project was pronounced a scheme of 
VIr. Chase that would be ridiculed out of Congress. It 


was compared to the Utopian money plans of other days 
— stigmatized as worse than a national bank; as the pre- 
cursor of widespread expansions and consequent bank- 
ruptcy; as intended to destroy the state banks, etc. In 
a comparatively short space of time these objections 
have been refuted to the satisfaction of a large majority 
of the people, and many who were first and most earnest 
in resisting the measure are now giving it their warm 

The advantages of the new system were stated in the 
Philadelphia Inquirer, Mr. Cooke's "organ," as follows: 

First. A currency equally well known, popular and uniform 
from Oregon to Maine. 

Second. A fiscal agency of the government in every city 
and town of this vast country — an agency at once safe, econom- 
ical and under our present circumstances absolutely indispensa- 

Third. A medium by which the government can dispose 
of its permanent loans as follows : By the sale of millions to the 
banks themselves as a basis of their circulation, and afterwards 
by means of these banks as agents to supply the people who 
are only awaiting such an opportunity to come and pour in their 
means to aid in supporting their government. 

Fourth. The Secretary sees in this plan the only practicable 
mode of returning to a specie basis. Without this measure we 
may remain under a state of suspension as long as did the Bank 
of England at one period. With this measure there is no obsta- 
cle whatever to a return to specie payments so soon as military 
successes shall show conclusively that the end of the rebellion 
is at hand. 

Fifth. The practical curtailment and withdrawal of present 
bank circulation and the establishment of the business of the 
country upon a sound and unfluctuating basis. 

This statement of the benefits likely to arise from the 
law was widely copied, and the same arguments were 


worked over and used in articles published in all parts 
of the North. 

Much care was taken to show how the system differed 
from the unpopular Bank of the United States. 

"It is complained against Secretary Chase's banking 
project," said the Philadelphia Ledger, "that it gives to 
the administration great and dangerous power; that it 
will build up something more obnoxious than was the 
United States Bank ; that the control of the purse and the 
sword in the same hands will be dangerous to liberty, 
etc., etc. This is all clap-trap for there exists no sort of 
comparison of the proposed plan of banking on pledge 
of government securities with the uncontrolled action 
and unlimited issues and discounts of the old United 
States Bank." 

"The currency of the country," said the Philadelphia 
Press, "is not a commodity that merely affects the citi- 
zens of one state and not those of another. It is not a 
local matter for Illinois and Maine and Maryland — to 
be created, sustained and circulated as Illinois, Maine 
and Maryland may see proper. It is a national privi- 
lege, or rather a national convenience. The dollar of 
America should be as valuable in New York as in Wis- 
consin, and no issue of dollars by citizens of either state 
should be permitted to depreciate it. The great enemy 
of our currency, as we see it now, is its sectional char- 

And after the bill passed * the Senate the Press said : 
"We accept this measure of the Senate as the beginning 
of a new reform in our currency. It is a step in the 
path of progress. The right of state banking and state 

1 February 13, 1863. 


currency perishes with other pernicious states' rights 
that this war is terminating. Hereafter the American 
dollar will be the same wherever the authority of Amer- 
ica is respected. We shall no longer be at the mercy of 
irresponsible and weak corporations whose promises to 
pay fall fifty per cent, in a day's ride." 

"Remove by taxation from circulation the two hun- 
dred millions of issues of i,6oo debt factories and there- 
by make room for more legal tender notes," counselled 
the Chicago Tribune} "The bank issues are not wanted. 
No public interest is served by their presence. They are 
the spawn of special privilege and have in violation of 
the plain letter of the Constitution usurped one of the 
attributes of national sovereignty; viz, to coin money 
and emit bills of credit. After reading Mr. Sherman's 
arguments it is hard to conceive how any man can re- 
main unconvinced of the propriety and necessity of caus- 
ing the circulation of sixteen hundred shinplaster shops 
to be retired by taxation." 

At least one New York paper, the Tribune, was, if 
with some reserve, advocating the national banking sys- 
tem : "We urge that some plan must be early adopted, 
that this is on the whole the wisest, most thoroughly ma- 
tured and generally approved; and that it is better to 
enact this at once than to spend the rapidly passing hours 
of this session in the prolonged discussion of compara- 
tively unimportant details. Time is of the first ccwise- 
quence. We are approaching the crisis of this war, and 
the nearer it comes the more plainly it is seen to be 
neither political nor military, but financial. Our prep- 
arations to meet it will not admit of delay." 

^January I4, 1863. 


Thus were the newspapers daily inspired to create a 
sentiment in favor of the national banking system and 
the bill passed the Senate, John Sherman firmly leading 
the battle, by the very close vote of 23 to 21 and the 
House by 78 to 64, being approved by President Lin- 
coln on February 25, 1863. In sixty-five sections it was 
sought to create the new banking associations — while at 
the same time safeguarding the public interests, and the 
stipulations were so numerous and new that much ex- 
planation was required immediately. An important 
benefit at once to be derived from the act, and it was one 
which strongly commended itself to Mr. Cooke, was the 
increased demand which would be created for the 5-20 
bonds, and the credit they would gain by being used as 
security for bank currency. The new associations must 
buy and deliver to the United States Treasurer 5-20 or 
other interest-bearing government stocks of a value 
equal to one-third of their paid-in capital. Upon making 
this deposit they might issue notes, equal to ninety per 
cent, of the current value of the bonds, but never exceed- 
ing the par value, which was to be payable in discharge 
of all public dues except duties on imports. The entire 
amount of circulating notes of this kind to be added to 
the country's currency must never exceed $300,000,000. 
The privileges of the act were to continue for twenty 
years. The banks were subjected to the oversight and 
superintendency of a national bureau and the Secretary 
of the Treasury might make them depositories of public 
moneys, a prospect not without its allurements to the 
officers and stockholders of the new establishments. 

It was clear that the banks would become absorbers 

of bonds in proportion to their number and strength and 


Jay Cooke gave his attention at once to the work of or- 
ganizing these associations, and of defending them 
against their enemies. Antagonism to the system did 
not cease with the passage of the bill. The state bank 
interests were determined to prevent an execution of its 
provisions, and used all efforts, many of them meanly 
dishonest, to defeat the ends of the law. Various pam- 
phlets were issued in New York and Boston attacking 
the new national banking system and a few newspapers 
were found to take up the cause of the state banks. "I 
think I can foresee that it may prove a calamity greater 
even than the Civil War under which we are now suffer- 
ing,'* wrote a Boston objector. "Armed rebellion can be 
put down by physical force ; but how shall we effectually 
guard against the insidiously corrupting influence of the 
money power?" After pointing to various defects in 
the law as he believed them to be he declared it "the 
most slovenly legislative act which, as far as my memory 
serves me, I was ever obliged to read and endeavor to 
understand." "It was," he continued, "such an act as 
an intelligent Congress ought never to have passed." * 
On October 6, 1863, a meeting of state bank officers 
was held in New York City and a committee was ap- 
pointed to make a report upon the act. This committee, 
consisting of John E. Williams and John L. Everitt, 
scathingly denounced the law in a statement dated No- 
vember 28, 1863. Their criticisms were numerous. 
They concluded that the notes issued by the new banks, 
although receivable by the United States for all dues 
except import duties, being in turn payable by the Uni- 

^Some Strictures on an Act to Provide a National Currency Secured 
by a Pledge of United States Stocks, etc. Boston, 1863. 


ted States for every purpose except interest on the public 
debt, were not "a legal tender between man and man, 
nor has any association or banking institution a legal 
right to pay them out in discharge of its debts to an indi- 
vidual or corporation." Mr. Cooke reading the report 
made annotations upon the margin of the pages of his 
copy. "Folly!'' said he, in response to this sweeping 

The committee furthermore stated that the banks al- 
ready organized had a capital usually not above $50,000 
or $6p,ooo. It knew of few "designed to do a legitimate 
banking business." They were to be "banks of circula- 
tion only, not regular business banks for deposits and 
discounts, but what are known in our western states by 
the expressive term Vild cat banks.* It will be borne 
in mind that the bills of these banks are not redeemable 
at an agency like the country banks of New York State, 
but only 'at the office of the association.' " "As if re- 
deeming by government was not better than redeeming 
in New York!" ejaculated Jay Cooke upon reading this 
animadversion upon the system. 

The committee continued : "Suppose the man in busi- 
ness has taken these bills and has a note to pay at bank ; 
the bank cannot receive his 'national currency' because 
it has no legal right to pay it out to either depositor or 
bill holder. What then can he do? He has but one 
source of relief ; he must take the bills to the uncurrent 
money broker — perhaps the very man who issued them 
— and submit to a discount of from one to five per cent., 
according to the distance of the place where the bank is 
supposed to have a local habitation and a number. The 
man who thought he had a currency of uniform value all 


over the United States finds when he leaves the broker'^ 
office that he has one or two hundred dollars less than, 
when he entered there." 

Jay Cooke wrote in anger under this: "This is an 
outrageous perversion of the truth. All lose sight of 
the fact that the notes are legal tender in all government 

The law, said the committee again, permitted the es- 
tablishment of "a new pet bank system." In a panic 
national bank bills would be sent to Washington for re- 
demption from all sides. United States bonds, forced 
upon the market, nmst be sold for what they would 
bring. If $50,000,000 were offered the price would fall 
to fifty cents on the dollar. Thus would the credit of 
the government be "prostrate, broken down in the vain 
effort to sustain this gigantic scheme of a national bank 

"If the skies should fall," remarked Jay Cooke in reply 
to this charge. "False! False!" "Not so!" he wrote at 
various places on the margin of the report of this re- 
markably hostile, and as all to-day can perceive ill-in- 
formed and unprophetic committee.^ 

Mr. Cooke responded to such pamphleteering through 
his newspapers, but his most effective answer was the 
establishment of the new banks, especially in the western 

Scarcely had the bill become a law when he had two 
associations ready to organize under it. The earliest 
to be incorporated was the First National Bank of 
Philadelphia, of which O. Wilson Davis was the presi- 

1 Report on the Natioftal Bank Currency Act. Its Defects and Effects. 
New York, 1863. Compare Knox's History of Banking in tlie United 
States, p. 100. 




6-20 LOj^IST, 

IVo. 114 South Third St., Phila. 


now coDtcmplMting the formation of NATIONAL 
DANKING A^SOUlATiuN;), an ler bBos^TABT Cuaju** 
Bill, pii<if(ed «( the I ant seMnon of Congresn. fire re* 
mindvii that the S«iSO L«0 A.N', now for « limited 
p^rifid to ty obtamed AT PAR, hat AirrniTiuriBST or 
AUGUST DB wiTUDBAWN from the market. 

The iiiiproved condition of Militarj aflairii and theeoa- 
staiir succession of Victories, Cogotner witli the comple* 
tion nfthe preparations for thefssae of the Four Uunored 
Millions of L<>gal Tender interebUbearmg aotee, or 
Treasury Notes, renders the issuing of further long or 
permanent losns at present, ezceediDgly doubtful. 

The Loanio I the (Government, matunng m 1881, are 
now selling at six per cent, premium. These woald 
advance to 10 or 16 percent, premium, ff the Secretary 
of (he Treasury ^ould diKContinue (he sales of the 
5.20*8 ; ann the 5-20*8 themselves would seon oom< 
mniid a han4vome premium, should the demand for 
(Government Loans, an the basisfor banking or for in* 
veMtmtMit, be at all active. Jt is possiblo^hattheSecrd* 
taryo It he Treasury may receive {lut>scriptions to the 
fi-.'U Loan for a longer period,— —should there be any 
dotuy in the prepnratior of the notes for the supplying 
(>r the Trcasu y with fbnds,or should he, in view oi the 
manifest bcnen is to the country from the present pop* 
Inr mode of distributing the Loans of the NaLon 
nmnnjj.Ht thepwpi&^or to encourage the formation of 
tUf Niw KHnKs--decide it to be in«eand jodicious to 
f nrllier extend the time ofTsubsoriptions to the 6-ao*sal 
par His views and intentions on tne sulgeet, of eonn^e 
H:e unknown , therefore, the safie«t and wisest course 
IS to Mub»K:nbestoni^e, whilst a Six per cent. Bond, 
wiih the interest and pi iiioipal payable in UOLD, ean 
be had nt par. 

It will stiord me ploasure to ftimish full informatioa 
in record to the formalioii of the National Banks, and' 
ilic noces>>ary ftep-* to t>e taken. Print<>d documents 
rcJMiivo thereto will be furnished, at Washington, on 
rT]>!irntion to Uo>. HuoH McCDLi.orou, Comtroller of 
I'lji- i;ijr»»»Q'>y or by the undersigned. 


^l>6€r ption Ag^iit for 5-90 )4mli« 

lU6outh Third Slreeti PoHadelphiA. 

JAY cooke's advp:rtisement, offering bonds to the new 



dent. The Department granted it a charter on June 
20th through the Comptroller of the Currency, the 
new office created by the act and lately bestowed upon 
Hugh McCuUoch, a state banker of Indiana, after hav- 
ing been offered to Joseph Patterson of Philadelphia 
and other eastern men. The institution was very 
shortly reorganized by E. W. Clark and Company and 
Jay Cooke and Company under the direction of Jay 
Cooke with a capital of $500,000, nine-tenths of which 
was taken by the partners in those two firms. Mr. 
Cooke had desired his friend Henry D. Moore to be 
president of the bank, but he was about to serve the 
state of Pennsylvania another term as Treasurer. Clar- 
ence H. Clark therefore became president, while Morton 
McMichael, Jr., was elected cashier. 

On March 25, 1863, the "articles of association" of 
the First National Bank of Washington were filed at the 
Treasury Department, but they must be withdrawn be- 
cause of some irregularity in the procedure, and it was 
not until July i6th that it could receive its charter, when 
twenty-four other banks had been established under the 
law — nine in Ohio, three in Indiana, three in small towns 
in Pennsylvania, two in Iowa, two in Connecticut (New 
Haven and Stamford), one in New York (Syracuse), 
one in Massachusetts (Springfield), one in Illinois (Chi- 
cago), one in New Hampshire and one in Michigan. Of 
the First National Bank of Washington, Henry D. 
Cooke was elected president and William S. Hunting- 
ton, a clerk in Jay Cooke and Company^s Washington 
house, cashier. Jay Cooke was a member of the board 
of directors of the First National of Philadelphia, a 
large owner of its stock and a power in its management, 


while the First National of Washington was to all prac- 
tical purposes his personal bank. He had by this time 
enlarged the quarters of his banking house at the na- 
tional capital at 452 Fifteenth Street. Jay Cooke and 
Company occupied the first floor, while the national bank 
was assigned the second story, which was reached by a 
broad stairway, "by all odds the handsomest room in 
town in or out of the Treasury." ^ It was **cr editable as 
a structure to the Iil>erality of its proprietors and called 
for by the expanding business and eminent position of 
the most prominent banking firm in the country." ^ 
Huntington reported to Jay Cooke as fully as Henry 
Cooke or H. C. Fahnestock', being directed in every im- 
portant movement and admonished or praised, as the 
case required, quite as a personal employee. The board 
of directors of the First National of Washington for the 
first year was composed of Henry D. Cooke, H. C. Fahn- 
estock, W. S. Huntington, Benjamin B. French and 
John A. Wills, all residents of the District of Columbia, 
as the law required. These with Jay Cooke and Wil- 
Ham G. Moorhead were the stockholders of the bank — 
there were at first no others. Mr. Wills had 100 shares 
($10,000), Major French 25 shares ($2,500), William 
S. Huntington 25 shares ($2,500), while the rest of the 
capital ($500,000), was provided by Jay Cooke and 
Company's two houses in the proportion of two to Wash- 
ington and three to Philadelphia, 950 shares being as- 
signed to Henry Cooke, 900 to Fahnestock, 1,250 to Jay 
Cooke and 1,750 to William G. Moorhead. The bank 
began business with thirty per cent, of its capital paid 

^ Fahnestock. 

^American Exchange and Review, 


in and it was therefore necessary for it to purchase $50,- 
ocx) worth of registered 5-20S, whereupon a certificate 
of authority was issued by the Comptroller of the Cur- 
rency. This paper was as follows : 

Washington, July 16, 1863. 

Treasury Department, Office of Comptroller of the Cur- 

Whereas, by satisfactory evidence presented to the under- 
signed, it has been made to appear that the First National Bank 
of Washington, in the county of Washington, and District of 
Columbia, has been duly organized under and according to the 
requirements of the act of Congress entitled " An act to provide 
a national currency, secured by a pledge of United States stocks, 
and to provide for the circulation and redemption thereof,*' ap- 
proved February 25, 1863, and has complied with all the provi- 
sions of said act required to be complied with before commencing 
the business of Banking: 

Now, therefore, I, Hugh McCulloch, Comptroller of the Cur- 
rency, do hereby certify that the said First National Bank of 
Washington, county of Washington, and District of Columbia, 
is authorized to commence the business of Banking under the act 

In testimony whereof, witness my hand and [l. s.] seal of 
office this i6th day of July, 1863. 

Hugh McCulloch, 
Comptroller of the Currency. 

One of the most characteristic acts in all Jay Cooke's 
financial career, marked throughout as it was by large 
and daring enterprises, v^as his organization of a na- 
tional bank in New York City. As we have seen the 
antagonism to this as to other financial arrangements 
with which he was known to be identified was/ greater 
there than anywhere else. Mr. Cooke recalling this 
experience says in his Memoirs : 


"John Thompson, the publisher of the Thompson 
Bank Note Detector, was the first man to organize a 
national bank in the city of New York under the name 
of the First National Bank of New York [No. 29]. The 
capital was only $100,000 and the banking office was at 
the northeast corner of Wall Street and Broadway, in 
the basement. Nearly every city had its bank-note de- 
tector. In Philadelphia we had Bicknell's and it was 
just as necessary for a trader to have a bank note de- 
tector and reporter as a yard measure. John Thomp- 
son's was a combination of a detector, reporter and 
quotation list of discount upon currency, as well as a 
true record of the rates of exchange in every part of the 

'There were two other banks organized in New York 
shortly afterward — the Second National under the Fifth 
Avenue Hotel with a capital of $200,000 [No. 62] and 
the Third National with $300,000 capital [No. 87], or- 
ganized under the auspices of Winslow, Lanier and 
Company, and principally owned by that firm. Mr. 
Lanier was from Indiana and was a great friend of Mr. 

"The Bank of Commerce, American Exchange, Met- 
ropolitan and other great banks of New York were 
openly hostile to the new system and some of the officers 
of these institutions used not only their personal influ- 
ence, but the press and pamphlet to decry and oppose 
the national system. Some friends of Mr. Chase in 
New York, knowing his earnest desire that the banks 
of that city should come speedily to adopt the national 
system, formed a committee, and made great efforts to 
establish an institution with a capital of $5,000,000 to be 


called the Fourth National Bank of New York. This 
committee was composed of Mr. Opdyke, Mr. Hutton, 
Mr. Webb, Mr. Stewart and other well known and 
influential citizens. Their efforts resulted in subscrip- 
tions amounting to a little over $i,cx»,ooo and, after 
some months delay, the matter was brought to my notice 
by Mr. Chase and Mr. McCuUoch when I assured them 
that I would go to New York on the following Monday 
and within three days secure the $5,000,000 capital for 
the establishment of the Fourth National Bank. Be- 
fore leaving on Monday morning I saw a few of my 
friends in Philadelphia, namely Mr. David Milne, Mr, 
George H. Stuart, Mr. C. H. Welling and others, put- 
ting down our own firm's name for $100,000. I took 
with me over a half million in subscriptions and could 
readily have raised the whole five millions in Phila- 
delphia, if it had been thought best. 

"I had written to Mr. John A. Stewart of the Trust 
Company to call a meeting of his committee for 3 p. m. 
on Monday. I met this committee at that time and told 
them of my promise to Mr. Chase and Mr. McCulloch, 
and that I knew the bank would be established within 
the three days. I suggested that upon the following 
day each of the eight members of the committee should 
call upon a list of names of their own selection, and at 
three o'clock on Tuesday we would meet again to re- 
port the results. They were particularly enjoined to 
regain all their old subscriptions, while at the same time 
obtaining as many new ones as possible. I enlisted my 
various agents for the sale of the government loans in 
the work of procuring subscriptions, called myself on 
Hoyt, Sprague and Company, A. T. Stewart, Daniel 


Drew and others. A. T. Stewart after an hour's con- 
versation and argument refused to subscribe. Hoyt, 
Sprague and Company and Daniel Drew each sub- 
scribed $100,000. When we met at three o'clock at the 
office of the Trust Company our list had reached a total 
of nearly $2,500,000. We re-arranged our plans and 
the next day, Wednesday, when we met at three the sub- 
scriptions amounted to $3,500,000. 

"I then took the precaution to write letters to friends 
in Boston, Baltimore, Cincinnati and Chicago urging 
them to send in their subscriptions by telegraph. The 
third and last day, Thursday, when we met ag^in, the 
total was $4,300,000. I stated to the committee what I 
had done in corresponding with out of town parties and 
proposed to take myself an additional $100,000 and that 
we should all unite in the effort to make up the desired 
amount of money, believing, as I assured them, that 
by the next day subscriptions would come in aggregat- 
ing a sum large enough to relieve us of these extra obli- 
gations. Great enthusiasm prevailed and the list was 
made up to $5,000,000, including some of the best names 
in New York City. I immediately telegraphed the Sec- 
retary of the Treasury that the Fourth National Bank 
was established with a capital of $5,000,000, as I had 
promised it would be within the three days, and calling 
in the money editors of all the principal daily papers 
whom I had invited to the Trust Company office, gave 
them the list of the names of the subscribers. This list 
with the circumstances attending the establishment of 
the Fourth National Bank with $5,000,000 capital was 
duly published in the papers next day, and that night 
at the Union League Club under the auspices of Mr. 


Hutton a supper was tendered the committee. There 
were many invited guests, including Hon. William M. 
Evarts and some other subscribers. I received many 
hearty congratulations and about midnight left for 

*'In a day or two, not hearing from Stewart, I tele- 
graphed him to learn how large my check should be. 
The answer was : * Your original subscription is all that 
is required. Amount fully made up by others and could 
make the capital much larger if desired.' When it is re- 
membered that the whole banking community of New 
York was prejudiced against the national system, and 
that all influences, financial and social, were arrayed 
against the change, the prompt success of this effort was 
quite remarkable. Mr. Opdyke was elected president 
and the bank soon went into operation.* I took an early 
occasion to influence the old banks of New York to come 
over to the national system without further delay, as- 
suring them that they would reap every advantage that 
could be obtained by becoming depository banks and 
agents for the government, but in the event of their 
failure to enter the national system I should be forced 
to carry out a plan I had in contemplation, to establish 
a bank in New York with $50,000,000 capital which 

* " Lowe declines the presidency. New York opposes the scheme and its 
bank officers and at the head of them the Bank of Commerce, but we 
will triumph over them. I am to meet the commissioners to-night at the 
5th Avenue. I tell them they must organize first, fix on Vermilye for 
President, select a good board of directors, and then we can put it 
through, and if they can't do it here we will do it in Philadelphia, Balti- 
more and the west. I am determined to succeed in this matter. Vermilye 
is a great favorite and a good fellow and one more suitable for the post 
than Lowe or any other merchant." — J. C. to H. D. C, from New York, 
Dec. 9, 1863. 


would receive the national deposits and enjoy every, 
benefit that could be realized from a connection with the 
Treasury of the United States. I told them I contem- 
plated calling upon the other national banks through- 
out the United States to become stockholders in which 
case their accounts and balances would be removed to 
their own national bank in New York, and it was much 
preferable not to bring about such a separation of inter- 
ests. It would be far better as they and I knew for 
the old banks to co-operate cordially in the establishment 
of the new system. Very promptly, one by one, they 
changed to the national system and there was no neces- 
sity for going further in the matter that I had proposed. 
I am positive that I could have established this large 
bank within thirty days, in which case it would have re- 
ceived not only the bulk of the government deposits but 
the accounts and balances and business of a large por- 
tion of the national banks throughout the country.^ 
In those days and with the full co-operation of the 
Treasury in all that was good and proper to be done I 
had not the least idea of any failure to accomplish such 
a work as the above." 

In raising the funds to start the Fourth National of 
New York, Mr. Cooke, as he has indicated, strode over 
barriers in his life-long manner. His principal agents 
in Boston, Spencer, Vila and Company, to whom he ap- 
pealed for subscriptions, wrote that none was to be ex- 
pected from their territory. "Bank stocks are not in 

^ Mr. Cooke had it in his mind to take hold of the Third National 
Bank of New York. Chase who was consulted about the movement hoped 
that its capital could be increased to twenty and if possible thirty millions, 
"so it would be an overshadowing power." — H. D. C. to J. C, Jan. 4, 


much favor at present," they informed Mr. Cooke under 
date of December 17, 1863, "and the 5-20 agents say 
very emphatically that it would be useless to attempt a 
subscription at the present time. We regret exceed- 
ingly that you should be subjected to any disappoint- 
ment," etc., etc. As he hints in his Memoirs, he found 
much of the encouragement he needed in his own city, 
many Philadelphians making subscriptions to the stock 
of the new bank. Thus Tyler and Company "dealers in 
coal" wrote him on December 8, 1863, as follows: 

Jay Cooke, Esq., care of Clark, Dodge and Co., New York: 

Dear Sir: — We hereby authorize and request you to subscribe 
in our name forty thousand dollars ($40,000) stock of the 
national bank now beings organized in New York with $5,000,000 
capital. We will pay your sight draft for the first installment 
and make payment of the balance as may be necessary. 

Similar letters were received from many other Phila:- 
delphia merchants and capitalists and thus was the bank 
started on a way which should have led to better for- 
tune than it was soon to enjoy. Early in 1864 a quarrel 
arose between the president, George Opdyke,* and his 
directors, and Mr. Cooke's New York agents, Hugh 
McCulloch and others were appealed to in the interests 
of peace. Mr. Opdyke wrote to Jay Cooke and Com- 
pany April 3, 1864: 


There is irreconcilable discord in the direction of the Fourth 
National Bank which you did so much for in procuring sub- 

1 In a letter to Chase in April, 1864, in which he tried to fix the blame 
for the unhappy condition of affairs in regard to the Fourth National 
Bank Cooke said that Mr. Opdyke had been taken because he seemed to be 
" the only available man." He added, " I admire him and think highly of 
him as a man — but would not again choose him as a president to preside 
over any capital I had to invest in banking." 


scriptions to its stock and a large amount of which is still held 
by you and your friends. 

I am anxious to confer with you in relation to its interests 
and shall be greatly obliged if your Mr. Cooke will visit this 
city for that purpose. 

Very respectfully yours, etc. 

The disagreements continued until the end of the year 
when through the influence of Joshua Hanna of Pitts- 
burg, and Mr. Cooke and the Philadelphia interests the 
stockholders chose a board better able to give the insti- 
tution the creditable direction which a pioneer bank re- 
quired, if it were to serve as an exemplar of an untried 
and as yet unpopular system.^ 

Early in 1864 there was a characteristic passage at 
arms between Jay Cooke and George S. Coe, president of 
the American Exchange Bank whom, with other officers 
of the leading state banks in New York, the financier de- 
sired to identify with the national movement. On 
January 18, 1864, Mr. Coe wrote to Cooke: 

Your favor of the 15th inst. is at hand. The importance of 
continuing the harmonious action between the government and 
the banking institutions of the country which has hitherto worked 
so efficiently for the national cause cannot be overstated. It is 
deeply felt here by every bank officer and they will doubtless 
freely unite their counsels to promote it. But as I stated to 
you in conversation such a movement can only be successful if 
originated on invitation of government. You and I are only in- 
dividuals interested in our respective institutions and may only 
prejudice the object by taking the initiative, besides laying our- 
selves liable to the charge of presumption in taking the lead in a 
matter equally important to all. 

^Hugh McCulloch was mentioned for the presidency and had condi- 
tionally accepted, but affairs took a different turn. See McCulloch to J. C, 
Dec. 24, 1864. 


An opportunity was now at hand for a patriotic decla- 
ration by Mr. Cooke in his characteristic style. On 
January i8th he wrote from Philadelphia: 

Geo. S, Coe, Esq: 

My dear Sir : — I have yours of Saturday and confess to a great 
disappointment. I am aware that this matter might possibly be 
in better hands than mine and also that your or my actions are not 
binding on any one. I am, however, perfectly willing for my 
part to be considered presumptuous, trusting in the purity of 
my motives as a full justification. I do not think that this is 
the first time that individuals having a great public good in 
view have " taken the initiative." If we do not take such action 
who will? I feel assured that some one person or persons must 
step in here as peacemaker, as it is not probable that the govern- 
ment will take any measures of the kind we were talking of, viz., 
the extension of an invitation to representatives of the banks, 
unless the way to such movement is prepared by individuals. 
I confess I can see no harm resulting from an honest and disin- 
terested attempt to harmonize and make peace where now evi- 
dently war is rapidly brewing. I am sure I considered fron" 
the tenor of our conversation that you fully sympathized in 
my views, and that should I make a beginning here, as I have 
done, you would gladly co-operate in New York. 

I wish it fully understood that I am in no wise under any 
instruction or impulse of the government. All that I propose 
to do is to join with others — a few selected gentlemen. . . . 
With such gentlemen as yourself in New York and a similar 
co-operation in Philadelphia and Boston we could so arrange 
matters as to bring about harmonious action in Congress. If 
such movements can be made or will be made without my aid 
I shall be delighted to save myself from further trouble. I am 
only anxious to do good. I have no stock in the old banks and 
as far as my personal interests go it would be better for me 
that the national banks in which I am interested should have the 
whole field for themselves and the other national banks. You 
certainly therefore will see that I am entirely disinterested in 


this matter, neither am I in the remotest degree moved by any 
influences from the government. . . . 

I shall be pleased to hear further from you. I trust you will 
change your mind and agree to undertake this good work re- 
gardless of any fears of prejudicing the work, or of being pre- 
sumed officious. 

Very truly yours, 

Jay Cooke. 

Mr. Coe was of course in no mood to be convinced of 
the need of a conference to forward the interests of the 
national system. He replied on January 19th: 

I am familiar enough with our banking gentlemen to know 
that while they are anxious to hitcrchange views for the purpose 
of establishing a sound and permanent system under the national 
bill, yet they will not convene for that purpose without some 
official intimation that their labors will be acceptable to gov- 
ernment. I am unwilling to be the originator of a movement that 
might subject me to be challenged for my authority, or end 
in a cold repulse. As I stated to you when here Mr. Cisco 
occupies such a position in this city and his relations to all our 
banking gentlemen are of that independent, and at the same 
time confidential character, that he can do more than anv other 
to secure such a conference. He may invite whom he will, 
whether here, in Boston or Philadelphia, with the certainty of 
a hearty response. But he will naturally desire to wait for an 
expression from headquarters. 

Thus was Mr. Cooke again very plainly told that 
he was a presumptuous meddler who was without au- 
thority for what he intended to do, a judgment be it 
noted which did not change his purpose with reference 
to the national banking system. It throve in spite of 
temporary reverses and discouragements. Early in 
1864 the First National Bank of Philadelphia raised its 
capital from $500,000 to $1,000,000. In May, 1864, the 


First National of Washington paid a five per cent, gold 
dividend on its half year's business, having had no 
circulation until December, 1863. In November, 1864, 
Jay Cooke received six per cent, or $7,500 in gold on 
the $125,000 of stock which he personally held in the 
bank. In May, 1865, it paid a dividend of ten per cent, 
in gold on a half year's business, applying $25,000 to 
surplus and $21,000 to the mortgage held by Jay Cooke 
and Company on its marble building. 

Baltimore's First National was not very far behind 
the rest, starting early in 1864 and others were soon put 
on the way to organization in that city, "quite a number 
of citizens" feeling much disappointment because they 
were unable to obtain stock in the first bank ; it was all 
taken "by big fish before the small ones got up." * 

When Mr. Chase made his report to Congress in De- 
cember, 1863, 134 national banking associations had 
been organized with an aggregate capitalization of $16,- 
081,200. The charge that nearly all of them were small 
and relatively weak foundations in the West was true. 
But they were national banks and a great number of 
them owed their existence to the labors of Jay Cooke and 
his travelling agents engaged in selling the 5-20 loan, 
who upon the passage of the law were directed wherever 
they went to bend all their efforts to this end. Mr. 
Cooke lost no opportunity to spread the gospel of the 
national bank both because it would assist him in the 
sale of the 5-20 loan and through knowledge that it 
would place the finances of the country upon a solid, 
honest, systematic national foundation, thus preparing 
the way for an easier disposition of future war loans. 

1 Letter of John Wills to Jay Cooke, February 3, 1864. 


He gave of his time and capital generously and loyally 
to a work that brought him no immediate return, even 
in the good opinion of his fellow men. It was a patriotic 
service and without it the system probably would not 
have failed, but its progress would have halted and in 
all likelihood it would have had no development rapid or 
large enough, to fit it to be a useful influence in for- 
warding and terminating the great civil contest. 

All of his agencies were freely used for the distribu- 
tion of circulars and pamphlets explanatory of the new 
banking law. Some of these were furnished him by the 
Treasury Department; others were prepared and 
printed at his own expense. The First National Bank 
of Washington invited new associations to send their 
preliminary papers to it rather than to the Department 
directly, — for correction, for an omitted revenue stamp 
or other necessary attention, lest they be returned by the 
Comptroller because of some imperfection. As early 
as May 13, 1863, Jay Cooke wrote his brother Henry: 
"Can't you get up a pioneer pamphlet showing parties 
exactly what they have to do in order to organize the 
new banks? Everybody is floundering in ignorance 
just now, and it is losing the golden opportunity for 
Governor Chase." 

In the autumn Jay Cooke had Henry D. Moore pre- 
pare a "Synopsis of Proceedings Necessary to Organ- 
ize a Bank under the Act of February 25, 1863.'' He 
promptly gave it the popular title "How to Organize 
a National Bank," and changed and corrected it in 
many ways with his own hand until it was a concise and 
lucid document. After submitting it to Secretary 
Chase and Hugh McCuUoch for their approval he 


printed it and forwarded it to his correspondents and 
agents for their reading and distribution in all parts of 
the loyal states/ 

The communications from Mr. Cooke's western 
travelling agents for this period are of much interest, 
clearly indicating the development of the national bank- 
ing system in that section. H. C. Storms wrote from 
Chillicothe, O., on November 20, 1863, saying that he 
had secured a promise from the officers of the bank at 
Athens to organize under the national law, other cap- 
italists in the town being put in a frame of mind to form 
an association if the old institution refused to adopt the 
system. At Parkersburg, Va., and Pomeroy, Galli- 
polis, Ironton, Portsmouth and Chillicothe, O., he found 
or left national banks in various stages of organiza- 
tion, and sold them the bonds to secure their circulation. 

Thomas F. Shewell, travelling in a more western dis- 
trict, found the First National of Davenport, Iowa (No. 
15), Austin Corbin president, ready to issue its first 
quarterly report on September 30, 1863, a copy of which 
he forwarded to Mr. Cooke. While many associations 
had been or were about to be formed there was, he 
said, "great reluctance to bank under the law while so 
great a discrepancy exists between the state and national 
law in regard to taking interest which is here permitted 
to be 10 per cent, under contract [a provision in Sec- 
tion 46 was construed to prevent the taking of higher 
rates]. It is up-hill work to convince men against their 
own interest, so I have rather endeavored to induce 
them to take action in relation to the 5-20S, that they 

* The original draft of this paper is preserved in Mr. Cooke's collection 
in possession of Mrs. Barney. 


may be within reach after the law is amended to their 
satisfaction, when I am convinced every banker and 
banking concern in the state will take advantage of it. 
At least so much I gather from those I have seen thus 

Another retarding influence which was reported by 
Mr. Shewell in a letter from Chicago on November lo, 
1863, was the appearance of the new national bank 
notes. The western people were already so enamored 
of the greenback that they wished no other money. He 
wrote : 

On relation of a banker here who had seen the proofs from 
the plates for the new national bank currency, and who said 
that they resembled ordinary bank notes and not greenbacks, 
much solicitude is expressed, and it is regretted that they are 
not as near like them as possible; for the farmers refuse to 
take anything else for their produce, horses, cattle, etc., hoard- 
ing them as they formerly did gold. A horse dealer for govern- 
ment account in purchasing Treasury notes zt %% premium 
remarked to a banker that he could buy a better horse for $100 
in greenbacks than he could for $200 in other currency, and 
an Irishman presenting a check to another asked to be paid 
in ** Lincoln green." These facts show the regard of the peo- 
ple of the Northwest for this currency. The feeling is univer- 
sal and for this reason I think it would be wise in the govern- 
ment to imitate them as nearly as possible in the new national 
bank notes. 

William Poulterer, reporting the results of his labors 
in October and November, 1863, said: 

I have reason to believe there will result from my exertions 
in Michigan from twenty to twenty-five organizations requir- 
ing two millions of capital and promoting sales of 5-20S three 
or five fold more. All this in the interior. Detroit is doing its 
own work and doing it well. 


The same agent again wrote to Mr. Cooke on Novem- 
ber i8, 1863, when he said: 

The principal difficulties to overcome in my efforts to establish 
national banks in this state, are the following three, which indeed 
resolve themselves into but one, to wit : the rate of interest. 

First. Want of capital for the investment. 

Second. Need of the immediate return of the ninety per cent, 
on investment in circulating notes. 

Third. The low rate of interest permitted — seven per 
cent, only in Michigan, whereas the state law permits ten per 
cent, (by contract) and throughout the greater portion of the 
state the actual rate is i^ to 2 per cent, a month. 

Now it is evident that money is worth more than seven per 
cent, in these new countries, and until there is a restriction of 
the rate for New York to the three per cent, of London and 
Amsterdam there is inconsistency in limiting the rate here to 
the New York seven per cent. rate. The state laws consid- 
erately allow 10 per cent, by contract in Michigan and I am 
informed that in Illinois 12 per cent, is permitted. Had the 
act been in this respect as liberal as the state laws, and had the 
currency department been ready to issue circulation g^eat im- 
mediate success would have attended my exertions here. Quite 
a large amount of S-20S are now held by bankers and others in 
interior towns of Michigan and still more will be purchased for 
use in banking under the act when the circulating notes are 
ready, a change of business until that time not seeming 
desirable and the hope being strong that the coming G>ng^ess 
will allow interest to be charged on loans in accordance with 
state enactments. Of course Mr. Chase is aware of all this and 
will not neglect any just and necessary requirement of the great 
west, a region it is especially desirable to occupy with banks in 
his great system. 

The very grave objection was oflfered by the old state 
banks of the East to the abandonment of their names, 
which they had borne with honor for many years, in 


favor of numerals. The American Exchange or Chem- 
ical Bank had no desire to become the Fifth or Tenth 
National, and that they resented a change upon such 
terms is not to be wondered at. 

The conviction was general therefore that the act of 
1863 should be amended in the light of the experience of 
a year and that further steps should be taken to har- 
monize the national and state banking systems, so that 
a greater number of the old institutions would avail 
themselves of the privileges offered them by the Treas- 
ury Department. The debate in Congress developed all 
the objections which had been expressed in the country 
at large during the year past — that the system inflated 
the currency, increased prices, provided an issue of irre- 
deemable notes, sheared states of many of their proper 
powers and prerogatives, etc. The amendatory act had 
the approval of Jay Cooke, who as early as in January, 
1864, instructed Henry Cooke to visit Secretary Chase 
and John Sherman and lay before them his plans for an 
improvement of the measure. The amendments were 
passed on June 3, 1864; receiving a larger majority than 
had the original bill in the preceding year. The 
changes, while largely technical in character, made sev- 
eral rather important concessions to the state banks. 
All the Corn Exchange, Farmers' and Mechanics', 
Tradesmen's and other banks with distinctive names, to 
which they wished to cling, were now invited to come 
into the national system, bringing their names with 
them.^ From the beginning the officers of the old 

*This was an administrative rather than a statutory regulation of Mr. 
Chase's making. Experience told him that he had better abandon his 
numeral scheme. 


banks were fearful that their institutions would be taxed 
to death. Indeed, as the Boston pamphleteer wrote in 
October, 1863, it was the "openly and frankly avowed" 
purpose of the Secretary of the Treasury and the 
Comptroller of the Currency to drive them out of exist- 
ence. The Comptroller on a recent visit to Boston had 
"pressed upon the presidents of banks, with whom he 
had asked a conference, whether the instinct of self- 
preservation should not induce them to wind up their 
state institutions and organize at once under the United 
States law." ^ 

Congress, despite its threats and the bankers' fears, 
did not lay a tax upon state bank issues until March 3, 
1865. Then it was provided "that every national bank- 
ing association, state bank or state banking association 
should pay a tax of ten per centum on the amount of 
the notes of any state bank or state banking association 
paid out by them after the first day of July, 1866." 
Thus gradually, and yet with a revolutionary force not 
very possible except at a time when important measures 
were rather arbitrarily enacted and executed under a 
broad plea of necessity in the exercise of the war power, 
were the sixteen hundred state "shinplaster shops" 
swept out of existence in favor of a respected banking 
system to all practical purposes, the same which is in 
successful operation at this day. 

The Comptroller of the Currency on November 25, 
1864, reported 584 national banking associations with 
a total paid-in capital of $108,964,597, issuing circula- 
tion to the amount of $65,864,650, and in his report for 
1865 the number of national banks had increased to 

1 Some Strictures, etc. 


1647 with a capital of $418,000,000, their issues of 
notes aggregating about $220,000,000. As the law re- 
quired they had absorbed about $250,000,000 of gov- 
ernment bonds to secure their operations. 

The time was now at hand when Jay Cooke was to 
become quite openly involved in Mr. Chase's campaign 
to make himself the successor of President Lincoln. 
In spite of the exasperations of the summer of 1863, 
when Chase by his unsettled conduct regarding the al- 
lowances to be paid for the sale of the five-twenties, 
seemed to be as unfriendly to the Philadelphia banker as 
to his country, so sadly in need of the money which a 
little more liberality on his part would cause to flow 
into the Treasury abundantly, Mr. Cooke was still one 
of the Secretary's warmest admirers. It was entirely 
natural that he should cordially sympathize with the 
presidential aspirations of Mr. Chase, especially as his 
brother was a politician very enthusiastically committed 
to the Ohio leader's candidacy. Jay Cooke's loan agents 
and the newspaper advertising system which he had cre- 
ated were therefore cheerfully enlisted in Chase's be- 
half, but the movement was concealed under so much 
real patriotism and the hopes of the leaders were so 
short lived that no particular harm came to the banker 
and his firms from his association with this rather un- 
fortunate political experiment. Deeply possessed as he 
was from the beginning to the end of his life of a de- 
sire to be President of the United States, Mr. Chase not 
only favored but indeed rather expected the use of the 
five-twenty advertising agencies for his personal po- 
litical advantage. As early as March 25, 1863, Henry 
Cooke wrote to Jay Cooke that the "Governor" was 


pleased with "the Ledger money articles," and "sug- 
gested that the money editors should put forward and 
keep prominent this idea that the success now attend- 
ing the government finances was owing to the adoption 
by Congress of his series of measures, a series of meas- 
ures which he pertinaciously adhered to, pressing it 
upon Congress, which was reluctantly brought to 
adopt it/' 

On January 13, 1864, Henry Cooke in his correspond- 
ence with his brother remarked that he had just been 
summoned to the Treasury Department. The "Gov- 
ernor" had received an anonymous note in reference to 
the Philadelphia Union League's action in declaring 
itself for Lincoln for a second term, and its course 
was ascribed to Jay Cooke's influence. After mention- 
ing the subject the Secretary said he would "let it pass" ; 
he had sent for Henry Cooke to confer with him con- 
cerning the 5-20 loan. The note was regarded by 
the latter as "a dastardly and cowardly attack" upon 
his brother and he wished that the facts could be made 
known to Chase, so that their devotion might not be in 
any kind of doubt. 

The next day, January 14th, Henry wrote to Jay 

The Chronicle [Forney's Washington paper] is out to-day for 
Lincoln. The current seems to be setting strongly and almost 
universally in that way. The Governor alluded to the fact, and 
said that rather than jeopardize the chances of his usefulness to 
the country and the success of his financial policy, which he 
believed to be the salvation of the country, he would sacrifice 
all hopes or aspirations for the presidency, were the prospects 
ten- fold more flattering than they are. That was noble; yet 
as his personal friend I feel bound to do all that can honorably 


be done to advance his interests in that direction. If you can 
succeed in your bank plan it will be a great point gained. 

On March i, 1864, Henry CcK)ke wrote: 

The Secretary has the question of running for the presidency 
still in abeyance. What do you think arc the prospects in Penn- 
sylvania? I ask for information. I think the Secretary would 
like to have your opinion. 

On March 4th he wrote again : 

The Secretary will probably let the public understand shortly 
that he is not seeking a nomination against Mr. Lincoln. He 
is content to leave the choice to the people. If they prefer 
Lincoln he will make no effort to supplant him in that prefer- 
ence. If on the other hand they manifestly prefer him he would 
not feel at liberty to decline the nomination, if tendered. He 
means simply that by no act of his will he stand in the way 
of Mr. Lincoln's renomination if the people prefer him. 

On April 5, 1864, the coyness of the candidate had 
increased, for he wrote to Jay Cooke concerning a letter 
which the Secretary had received from a humble ad- 
mirer in Philadelphia as follows: 

I want you to thank him for his friendship and to say that 
my letter to Mr. Hall meant exactly what it said. While few 
men would I suppose refuse so high an office if tendered to 
them, and I don't profess to be one of the few, I cheerfully 
recognize the fact that a majority of the friends of the cause I 
love better than any personal advantages prefer the re-election 
of Mr. Lincoln and I am not willing to have my name used as 
a watchword of faction and division. 

In the meantime, while they so busily forwarded the 
sale of five-twenties and urged the organization of na- 
tional banking associations, the newspapers at Jay 
Cooke's direction were very loudly praising Mr. Chase 
as a man, and lauding his policies as the Secretary of the 


Treasury. The American Exchange and Review of 
Philadelphia, a magazine of the day, published an ex- 
tended biography of Mr. Chase, which was inspired by 
Mr. Cooke, being accompanied by a handsome portrait 
of the Secretary of the Treasury, engraved especially 
for this use by John Sartain. On December i, 1863, 
Joshua Hanna, the Pittsburg banker, still a warm friend 
of the Secretary, wrote to Jay Cooke : 

Dear Sir: 

Your favors with articles for publication were all received. 
The first was published in the Commercial and followed with an 
article of their own. The other copy is sent to an adjoining 
county and I have the promise of its insertion. The last one 
is in the same paper and I send you two copies by this mail and 
one to Chase. 

I reserve the privilege of paying for it myself. I have labored 
hard but as yet Old Abe has the ascendency, largely with the 
remark that we cannot spare C. from his present position. The 
last article will be copied by several papers in western Penn- 
sylvania and eastern Ohio. 

Indisposed to take an active part in any political 
movement, Mr. Cooke ^ had too much good sense to go 
far with his anti-Lincoln friends. Nevertheless he had 
given pecuniary aid to the Chase committee, of which 
Senator Pomeroy, the author of the ill-starred "Cir- 
cular,'' was the chairman and, through Henry Cooke, 
the Washington branch of Jay Cooke and Company 
was involved in expenditures which were estimated 

1 It needs to be said that Mr. Cooke's partner was a Chase man, al- 
though a Republican in but few of his sympathies, and therefore not fully 
entitled to a share in choosing the party's candidate for 1864. " I admire 
and truly respect him" [Chase], wrote Mr. Moorhead on June 22, 1864. 
'' Would we were willing to commit to his care and keeping all the in- 
terests of the country, but he is not appreciated by Lincoln." 


to amount to $20,000, about half of what the adven- 
ture is said to have cost the Secretary's new son-in- 
law. Senator Sprague. First of all there was an out- 
right gift from the firm of $5,000. There was a check 
of $2,000 to one Daniel W. Wise (of "Walker, Wise 
and Company, publishers, booksellers and stationers,*' 
245 Washington Street, Boston) for an article lauda- 
tory of Chase, which was to be placed in a coming num- 
ber of the Atlantic Monthly, said to have been Jay 
Cooke's own investment and paid in person while he was 
on a visit to Washington. This was a chapter from a 
"Life'' of Chase called "The Ferry Boy and the Finan- 
cier," written by J. T. Trowbridge for which the Secre- 
tary himself furnished the material.^ 

Then there was the purchase of a newspaper to be 
managed in Mr. Chase's interest, the negotiation being 
directed by Senator Sprague. Some $13,500 were paid 

^ Sec correspondence between Chase and Trowbridge. Pa. Hist. Society. 
The article in the Atlantic Monthly appeared in the issue of April, 1864. 
Wise wrote to Mr. Cooke from Boston, April 25, 1864, asking for $2,000 
to distribute the "Life." He said: "We now expect to publish Mr. 
Chase's life in course of a week and want to be able to send a copy to 
.2,000 newspapers in all parts of the country, a list of which we are having 
made out at the New York Tribune office. The expense, including a copy 
of the book, postage, etc., will be about $1 each, so that we want to raise 
$2,000. When in New York a day or two since, I went to many of the 
bankers and brokers but could raise only a few hundred dollars, they all 
declining to subscribe at present; some on account of the eflFect produced 
by Secretary Chase's last trip to New York, when many of their pockets 
were materially affected and themselves considerably frightened. Others 
say that they are not ready to commit themselves, but say that if we can 
get him nominated they will spend their money liberally for him. What 
is necessary to be done, however, and that at once, is to place a copy of 
the book in the hands of all the press throughout the country before the 
convention that if possible they may be made to use their influence in 
his favor. . . . What we want to raise is $2,000. Whatever you write 
us will be strictly confidential/' etc., etc. 


on this account by the Cookes and other persons con- 
cerned, with promises of enough more to raise the 
amount to $20,000. The Chase men from time to time 
obtained various loans from Jay Cooke and Company 
of Washington, or from Henry Cooke, upon the plea 
of an empty treasury. It was stated that Jay Cooke 
had authorized these expenditures but this was only par- 
tially true, for when the state of affairs in his Washing- 
ton house was brought to his attention he very promptly 
withdrew both himself and his firm from the entire 
Chase-Sprague-Pomeroy movement. To make the di- 
vorce more impressive it was announced that Henry 
Cooke was in poor health by reason of the exactions of 
the five-twenty loan business and would go abroad for 
the summer of 1864 to rest and develop his cherished 
plans for the sale of United States bonds in Europe. In 
his absence Mr. Fahnestock drew upon Sprague for 
various amounts, some of which he never received, since 
the Senator from Rhode Island did not regard them as 
personal obligations. The "promises" to the agent, one 
Weston, for the purchase of the newspaper, were not 
kept. The firm refused to pay an order presented by 
"Sunset" Cox for $3,000 which he claimed for some 
mysterious political object, and generally sought to do 
what it could to recoup itself for its unfortunate po- 
litical investments. In all this Fahnestock had the 
warm support of Jay Cooke, but a good many thousands 
of dollars were irrecoverable, and the burden must be 
borne personally by the Philadelphia financier, or 
charged to profit and loss. 

This was the end of a very ill-advised alliance, the 
echoes of which were never allowed to extend beyond 


the narrow walls of the private offices of the heads of 
the firm. Lincoln's renomination was foreordained; re- 
sistance was in vain and Jay Cooke for himself had no 
desire, if he had possessed the power, to antagonize the 
second term movement. He was ready to go on a fish- 
ing trip in the streams around Washington with 
Sprague and General Moorhead about the time the dele- 
gates met at Baltimore, Moorhead begging for a delay 
in order that he might attend the convention. Mr. 
Cooke afterward loyally worked for the election of Lin- 
coln and made at least one contribution to the campaign 
managers. He gave $i,ooo to the Pennsylvania State 
Republican Committee, which was acknowledged as fol- 

Harrisburg, July 24, 1864. 

Dear Sirs: 

Our friend, General Moorhead, writes that you will contribute 

one thousand dollars to me for the use of the State Committee, 

as several other good Union men have already done. For this 

liberality please accept my thanks. Will you send a check for 

the amount or shall I draw on your house? 

Very truly yours, 

Simon Cameron. 
Jay Cooke and Company. 

In judging Jay Cooke's course at this time it is to be 
remembered that the bond between Ohio men is per- 
sistent and strong and that the personal relations of the 
Chases and Cookes were unusually friendly and warm. 
Moreover the financier was open, straightforward and 
of the largest views, innocent of all knowledge of 
practical politics. He studied the war on its financial 
side and looked at it as a financial problem. Secretary 
Chase standing before him as a greater figure than 


those who were performing deeds better calculated to 
quicken the pulses of the great body of the people. 
There were many reasons for Chase's failure to win 
the honor which he so much coveted, but which neither 
he nor his friends under the circumstances could openly 
claim for him. One reason was an intrinsic defect in 
his nature. It was not better illustrated anywhere than 
in his dealings with Mr. Cooke. It was well described 
by Zelotes Fuller, the old editor of the United States 
Journal of Philadelphia, when he wrote about this time : 
"Although I have never seen Mr. Chase or received 
from him a single line I am much prepossessed in his 
favor and would like to see him on the road to the presi- 
dential chair. Who knows but that one day Jay Cooke 
will be a member of his cabinet? . . . There is but 
one thing in him which I do not like, and that is he 
seems to care too much for his enemies and too little for 
his friends, and apparently would go farther to placate 
an enemy than he would to retain a friend.'* 



In the early months of 1863 while the national bank- 
ing bill was making its way through Congress with the 
valuable aid of Jay and Henry D. Cooke the $900,000,- 
000 loan bill also was being discussed and prepared for 
its final passage. The bank bill became a law on Febru- 
ary 25th and the loan bill on March 3d. The dangers 
which lurked in the latter measure, as Jay Cooke viewed 
the financial situation, chiefly lay in the proposal to in- 
crease the outstanding amounts of non-interest bearing 
paper money. He believed that a time was at hand 
when no more of this should be issued and he labored 
with a fine zeal to prevent the advocates of further emis- 
sions of greenbacks from pursuing their ruinous policy. 
The financial situation with the increasing premium on 
gold and the inflation of prices in terms of the paper 
money alarmed observant and reflective men. In No- 
vember, 1862, Joshua Hanna wrote to Jay Cooke: 

The increase of paper money has not only caused a wide mar- 
gin between paper and coin, which unless arrested must continue 
to increase until it follows the fate of all paper money not based 
on coin the world over, but it has caused an advance in all articles 
in the market, in many of them from 50 to 200 per cent, (except 
salaried men and officers), who are beginning to complain with 
just cause. They must soon be advanced unless a correction in 
the circulation is effected. Again a fever of speculation is taking 
possession of so large a portion of the country that a feeling is 



growing among this class that the longer the war lasts the better 
for them, and each day's outlay exceeds the last until our ex- 
penses will soon double the original cost per man (soldier). 
This state of things is alarming capitalists and must soon bring 
us to a crisis. 

A few months later the New York correspondent of 
the Philadelphia Inquirer wrote : 

As an illustration of the popular mania for speculating in stocks 
the fact may be mentioned that within fifteen minutes of the 
opening of subscriptions in a certain gold mining company this 
morning double the amount of its capital stock was subscribed, 
and so anxious were the crowd to go in that doors and windows 
gave way before the pressure. At one time it was thought that 
the interference of the police would be necessary to maintain 
order. Some parties resold their interest before leaving the 
room at a handsome advance. It mattered not whether the afore- 
said gold mines had an earthly existence or not. The people 
did not care apparently whether they were located in Colorado 
or in the clouds. What they wanted was shares, shares, shares 
of something and the want had to be supplied. Women are 
interested largely in these gambling operations as well as men. 
The dear creatures, it is true, do not appear in the crazy crowd 
^propria persona: but moderately sharp optics may discover 
them any day in close carriages or in back offices near by 
anxiously waiting to hear the latest report from the Board, so 
as to be in a position to instruct their brokers to buy or sell. A 
Ladies' Board, it is said, has actually been inaugurated in one 
of the Broadway hotels. Thus almost everybody for the mo- 
ment is blowing bubbles or building castles in the air.^ 

There was noticeable extravagance in dress and in 
all departments of personal living. The Philadelphia 
Telegraph complained of the heavy importations of 
laces, satins, silks and all kinds of foreign luxuries, an- 
other factor contributing to increase the premium on 

* Phila. Inquirer, April 8, 1864. 


gold. The Inquirer said: "Extravagance in dress is 
at any time a sin. At a period like this it is a crime for 
which, if prudence does not abate its manifestations, we 
will hereafter pay dearly.'' The New York Herald 
warned its readers against "the hundreds of mining 
companies which are springing up in all directions, a 
large majority of which have neither body nor soul and 
are only intended by their projectors as speculative bub- 

A writer in the New York Evening Post said : 

We ought to retrench just as an individual would retrench 
who was engaged in a costly lawsuit, and found himself com- 
pelled to spend a large portion of his income every year and 
borrow largely of his friends in order to carry it on. There 
is something exceedingly repulsive in the attempts that people 
make to persuade themselves and others that the war is en- 
riching the country and that we may therefore eat, drink and 
be merry. 

Congress now proposed another large issue of green- 
backs, the principal offenders in creating this, carnival 
of inflation and speculation. The movement was re- 
sisted by Jay Cooke and the history of this legislative 
struggle is well told in Henry Cooke's letters to his 
brother. On January 7, 1863, he wrote: 

The committee met yesterday to consider Mr. Spaulding*s bill. 
It was laid aside for the Governor's bill which includes the 
bank scheme. After some discussion the committee by a large 
vote laid aside Mr. Chase's bill (as an entirety) and appointed 
a sub-committee of four to report a plan. The committee con- 
sisted of Messrs. Morrill of Vermont (author of the tariff), 
Chairman ; Hooper, Erastus Coming and Spaulding, all able men 
and practical financiers. They worked all night on a plan which 
they reported to the committee this morning and which will 


command the vote of all but Stevens in the committee, and pos- 
sibly his to-morrow. It is briefly: 

1st, To issue 300 million legal tenders. 

2nd. To issue 300 million legal tenders in denominations 
not less than $10 bearing interest at the rate of one and one- 
half cents on every $100 per day or $547 per annum, the notes 
payable in three years. 

3rd. To issue 40 millions of postal currency. 

4th. To issue 500 million six per cent, twenty year bonds, 
subsequently increased in committee to-day to 900 millions. 

5th. To tax bank circulation by a sliding scale, — on a capital 
of $100,000 a tax of 2 per cent, on all circulation over 90 per 
cent of the capital; on $150,000 capital 2 per cent, on the excess 
over 80 per cent. ; $200,000 a tax oa all over 70 per cent, and so 

6th. All interest payable in gold. 

This programme met the hearty approval of every member 
of the committee except Stevens. He insisted that the 300 mil- 
lions legal tenders to be issued should take the place of the 300 
millions already issued, instead of being additional thereto, in- 
asmuch as there was so large an issue of non-interest bearing 
Treasury notes (these latter and the old and new issues of legal 
tenders making 900 millions). Stevens urged this point so 
strenuously that finally action was staved off till to-morrow, 
Stevens wanting to take the bill and study it to-night. You 
will observe that Erastus Corning is committed to the bill. He 
is the leader of the Democratic side of the House on all financial 
questions and his influence will carry the Democratic vote in 
favor of the plan. We have no doubt that substantially this plan 
will pass the House. 

Now, Jay, we rather like this plan. It is right in the main 
and with some modifications of details and with the discretion- 
ary power given the Secretary it is substantially your plan. 
Make the 300 millions of legal tenders a substitute for the old 
ones as proposed by Stevens and reduce the interest on the in- 
terest-bearing legal tenders to 3.65, the notes themselves not be- 
ing redeemable at any particular time, and it is your plan com- 


plete. The general idea, germ and scope, are the same as yours; 
the difference is only in the details suggested. 

It is of interest to find Thaddeus Stevens on the con- 
servative side at this juncture. He was soon advocat- 
ing the views of Jay Cooke. "I am sure from what 
I learn reliably," wrote Henry Cooke, "that he is sick 
of his first rash scheme and that he will be less pre- 
sumptive and more tractable in future." It was recog- 
nized, however, by Henry Cooke, so observant and in- 
telligent a student of political currents, that Stevens 
would now be "of comparatively Httle importance" and 
that he would be "governed by, rather than govern 
the action of the rest of the committee." And further- 
more that "the final shaping" of the bill would be made 
by the Senate Finance Committee, "of which Sherman 
and Fessendcn are the ruling minds." This forecast 
was entirely correct. Jay Cooke pursued his design to 
have Congress make the new issues one cent a day 
(3.65) interest bearing coin notes, Henry Cooke being 
instant in and out of season in forwarding his brother's 
plans. The financier himself appeared before the com- 
mittees of the Senate and House. He gives his recol- 
lection of this legislative contest in his Memoirs, as fol- 

"I went before the Committee on Ways and Means 
of the House and the proper Committee in the Senate to 
explain the effect of the passage of the law and issue 
thereunder of interest bearing legal tender notes. The 
greenbacks were being rapidly increased in amount to 
meet emergencies and were poured like a flood all over 
the country. Banks receiving these notes on deposit 
immediately shipped such as they had no use for to 


New York and other eastern depositories, where they 
could obtain some interest and at the same time have 
their funds on call. They did this rather than invest 
their money in the permanent gold bearing bonds of the 
nation, naturally fearing that should they suddenly re- 
quire their funds the bonds might have to be sold at a 
discount. So I devised a low rate of interest feature 
to be attached to the legal tender notes and recommended 
that instead of issuing vouchers through quartermas- 
ters, upon which the government indirectly suffered a 
very heavy discount, payments for all purchases should 
be made promptly through the quartermasters in these 
interest bearing legal tender notes. My plan was that 
they were to bear interest at the rate of three per 
cent, in currency, but no interest was to be paid until 
it had accumulated for three years. This would make 
these notes worth at the end of three months loo^ ; at 
the end of six months loij^ ; at the end of one year 103. 
and at the end of three years 109. [Mr. Cooke erred 
in recalling the rate of interest. His contention was 
for a note bearing interest at one cent a day.] I pur- 
posed that they should be received at any time with the 
interest calculated up to date in payment of subscrip- 
tions for any of the gold loans that the government 
pledged itself to keep upon the market for their redemp- 
tion. Thus instead of such a vast influx of non-inter- 
est bearing currency into the markets of New York and 
other eastern cities, to be employed deleteriously in 
speculation which would advance the price of every ar- 
ticle needed daily by the government and the people, the 
banks throughout the country would retain in their own 
vaults almost every dollar that they were not using in 


their business in these legal tender interest bearing 
notes. Even savings banks, insurance companies, 
merchants having idle capital, farmers, the soldier who 
sent back a part of his pay to his family, would under- 
stand that so long as they would retain these interest 
bearing notes they would get interest on them and that 
at any moment they could be paid out at par or at an ad- 
vance upon their face value equal to the accumulated 
interest, or could be funded with the accumulated inter- 
est into the gold bearing bonds of the nation. 

**The interest bearing feature, I argued, would en- 
tirely eradicate fear as to a decline in the value of these 
notes, at the same time offering great inducements after 
they had been circulated for a few months for hoarding 
them and holding them as investments. They would 
perform all the offices of circulation and of a funded 
loan, while checking the troublesome accumulation of 
deposits in the great money centres. The army could 
be paid promptly every month with these notes ; all pur- 
chases by quartermasters would be made upon a cash 
and immediate payment basis; the credit of the nation 
would be strengthened by these prompt payments and a 
great saving would be effected. Altogether I felt as- 
sured that the adoption of such a measure would pro- 
duce very beneficial results. 

"When I appeared before the Committee on Ways 
and Means Mr. Thaddeus Stevens, Chairman, ex- 
claimed, 'Mr. Cooke, do you really believe in this new 
plan of finance ?' I felt that in replying I was stating a 
great truth and making a vastly important announce- 
ment, and said, raising myself to my full height and 
pointing toward Heaven: *In the name of God I be- 


lieve every word that I have promised will be fulfilled 
if this bill is enacted into a law.' I then briefly ex- 
plained my theory. I compared the Treasury of the 
United States to a great ocean. The clouds were the 
paymasters, moving from the ocean over every part of 
the land, dropping here and there and everywhere the 
moisture received and accumulated from the ocean 
whence they had started, and whither the water gradu- 
ally returned. The value of this kind of rainfall was not 
greater than the value of my financial plan. This very 
feature attached to a legal tender note, namely its in- 
terest bearing character, would cause it to flow onward 
by a process of funding into permanent gold bearing 
bonds through springs, rivulets, lakes and rivers until 
again deposited in the Treasury, as naturally and cer- 
tainly as the water returned to the sea. There could be 
no such catastrophe as was frequently produced by an 
undue and extraordinary downpour of rain, t. e., green- 
backs, which might from an inequality of disbursement 
produce evil through floods, or by stagnating in immense 
morasses and swamps (New York and other Eastern 
cities) there to create miasma, fever, nightmare and 
every imaginable evil. The ordinary greenback pos- 
sessed no principle that would inevitably restrain it from 
this accumulating in such reservoirs as would be stag- 
nant and deleterious, whereas the interest bearing legal 
tender note would be influenced continually by a draw- 
ing power that inevitably, but naturally, drew it gently 
down the mountain, and through the valley, and back 
again to the great ocean whence it had originally come, 
viz. : the Treasury of the United States.*' 

Mr. Cooke's impressive figure of speech did not con- 


vert the members of the Committee on Ways and Means. 
On January loth Henry Cooke thought that Congress 
was "waking up" to a fear of *'the results of an indefi- 
nite expansion of the currency." But he was without 
hope for the House, his dependence resting upon the 
Senate, where were Sherman and Fessenden who would 
not be "carried away by the prevailing legal tender 
epidemic." Nevertheless he was attacking the members 
and arguing with them on the subject at every oppor- 
tunity. "The two points I urge," said he, "are first 
against any considerable issue of legal tenders without 
interest, and second against making the interest over 
3.65. The 5.47 is too much." 

On January 23d he wrote, "in the strictest confidence," 
that the Committee on Ways and Means had just had a 
meeting to discuss the propriety of making Jay Cooke's 
bill a substitute for theirs. But Hooper, a member of 
much influence, was "cross and determined" and the 
scale was completely turned by his course. "He read 
in the Committee a letter from 'an eminent Boston finan- 
cier,' whose name he did not give, in which it was de- 
clared that 7''^y Cooke was running the Treasury ma- 
chine for Chase,' with other stuff of like import, sneering 
and ill-natured. Stevens who was urging your bill took 
no notice of this low insinuation, passing it by with silent 
contempt; nor did it produce any effect upon the Com- 
mittee, as I am assured by my informant, but it was 
finally understood that they would continue the vote and 
discussion on the bill before the House, and that at the 
proper time Stevens would introduce your bill as an 
amendment to the whole bill. This will bring our 
project fairly before the House and should it decide ad- 


versely it will be in proper shape for the consideration 
of the Senate." 

At first Mr. Chase seemed to favor Jay Cooke's 
scheme and assured Henry Cooke that it would enjoy 
his support, but Hooper, Spaulding and Morrill of the 
Committee called upon the Secretary and converted him 
to their views. Thereafter he thought that the Cooke 
bill did not "stand any chance,** although he was re- 
minded of Sherman's positive declaration that the Com- 
mittee's would not pass the Senate. Chase seems hon- 
estly to have believed that the Hooper plan allowed him 
so much latitude that he could exercise his own choice 
afterward. The news that the Secretary had endorsed 
their bill was industriously circulated by the leaders of 
the Committee on Ways and Means and this coup told 
heavily against the Cooke amendment in charge of Mr. 
Stevens. While in Washington on January 21, 1863, 
after seeing Stevens and other members of the Ways 
and Means Committee, the financier wrote the Secretary 
of the Treasury: 

You see it [Hooper saying that his bill was approved by Chase] 
creates confusion and I am going to back out. It grieves me 
greatly. Oh, if you would only assume my plan, and call the 
Committee together, and urge it, it would pass at once and give 
the death blow to the financial enemies of our country. I 
solemnly assert in the sight of my Heavenly Father that all the 
plans of the Committee are absolutely ruinous and will prolong 
and extend, an hundred fold perhaps, the evils of the present 
hour. The plan that I propose will cure all those evils and place 
the credit and finances of our country on an independent basis, 
elevate our credit higher than ever before since the commence- 
ment of the war, and enable you to cut loose from all the an- 
noyances of banks and bankers. I assert this with equal solem- 
nity, and God be the judge that I have worked hard to do my 


duty to my country. The responsibility rests with you. I am 
assured that all look up to you for guidance and will adopt your 
views if insisted upon. ... If the 3.65 plan could be adopted 
at once all would then be free for the bank bill. I would gladly 
give my time and energies towards putting it through, and will 
do so in any case, but I candidly confess that I consider at this 
terrible crisis that the first thing in importance is to stay the 
flood of non-interest bearing legal tenders and the downward 
tendency of the public credit. 

Chase replied to this letter on the same day, January 
21, 1863, plainly saying that he thought the Hooper bill 
would suffice. "I have no objection to adopting your 
plan just as you stated it/' he added, "and believe that 
all its effects would be good. You mistake, however, in 
thinking that I have much influence with the commit- 
tees. I have tried very hard to get them to adopt some 
ideas, which seem to me too plain to require urging, 
and yet I have failed of success." Henry Cooke wrote 
an article explaining the differences between the two 
bills for Forney's Washington Chronicle wherein was 
very clearly set forth the advantages of his brother's 
plan. He said: 

The Committee's bill proposes still further to inflate the cur- 
rency and to aggravate the evils that have already followed in 
the train of such inflation by the issue of $300,000,000 more of 
non-interest bearing legal tender notes. The experience of the 
past year has demonstrated that such an increase of these notes 
must produce the most disastrous results. . . . Paper 
money is in such abundance that gold is withdrawn from cir- 
culation. It becomes an article of merchandise and specula- 
tion. As paper money increases gold goes up in price until it has 
reached 49% premium. Now, if upon an increase of $300,000,000 
of paper issues it takes three dollars of paper to buy two dol- 
lars of gold, does it not follow logically that a further increase 


'■ } 

\ • 

i» . 

FINANCIER OF Till. ri\ I. v 

of $300,000,000 of paper will j)rutiLii- 
in the value of the latter as ouiipai* 
words that it will require two dnlia: 
*' promises to pay" to buy one dnhi- 
shnuld we follow thus blindly \v. ii. 
financiers of the Southern Conieu»rirt" 
bill differs from that of the CoiimnU' 
notes to be issued bv the 'JreaMn 
well as public dues, redeemabi*. ii i.. 
ment; and all bearing a modeTul* :«. 
the government can afford V.' pn; ■• 
upon the twenty year bond^ u!j*-- 
notes into bonds. . . . 'In- 
tender note . . . will infu • 
ment; it will save the Treaj>iu 
lion dollars in interest as coinp.::- 
notes an«l perhaps fifty niilli'- 
values of all articles purciiay 
all the moment it is paid or* 
it becomes a negotiated ]n;r ..• . 
ami distributed among al • ;-. 
alike — a loan which tli- » 
compelled to carry, an»l w 

Stevens fought lii- 
on the final vote ti.«-' 
03 against the J;-. 
The original (.'oii!!-?' 
unanimously. I* *.; .. 
the current fisca' .-:- 


year ending Jutj* - 
twentv vears it. ' ■•• 
rate not excec-^lj:: 
coin. Further";.' 
$400,ooo,0(x> ' 
exceeding ihrr- - 



in excess of six per cent, in coin ; $300,ooo/xxD of green- 
backs and $50,000,000 of fractional currency. 

As Henry Cooke anticipated the Senate Finance Com- 
mittee made several important modifications in the 
measure which had passed the House. These changes, 
said the Philadelphia Inquirer,^ "lead us to believe that 
we still have left statesmen worthy of the name." 
The bonds were made payable at the option of the 
government after ten years and must be redeemed after 
forty years from the date of issue, for which reason they 
at once came to be known as ten-forty bonds. This 
was a point upon which Jay Cooke had not insisted, al- 
though he was decided in his opinion that they should 
not be sold, or offered for sale, at less than par. The 
Senate retained the House bill provision that they 
should be disposed of upon such terms as might be 
deemed "advisable." An important change made the 
rate of interest on the $400,000,000 Treasury notes six 
per cent, in "lawful money" instead of in coin, which 
taking into account the premium on gold might be held 
to be about equal to Mr. Cooke's 3.65 per cent. These 
notes were to be sold on the best obtainable terms or 
paid to creditors of the United States at par in discharge 
of current debts. They were made a legal tender and 
might be exchanged for greenbacks. The Senate 
furthermore reduced the new issue of non-interest bear- 
ing greenbacks of which Jay Cooke would have had 
none from $300,000,000 to $150,000,000, plus such 
amount (not exceeding $150,000,000 more) as might be 
issued to redeem the new Treasury notes. 

The greenbacks were "for the payment of the army 

* February 6, 1863. 


and navy and other creditors of the government" if 
required by the exigencies of the public service. Al- 
ready Congress in its haste on January 17, 1863, had 
by joint resolution authorized $100,000,000 of green- 
backs to pay the arrearages of the army and the new 
grant of $i50,0(X),ooo was made to include this issue. 

It may be guessed that Jay Cooke was not greatly 
pleased with this law and never became a large factor 
in negotiating the loans authorized by it. No one in- 
deed succeeded in making it of great value to the coun- 
try. It has been said of this act that it covered more 
subjects and clothed the Secretary of the Treasury with 
greater discretionary powers than any financial measure 
ever passed by Congress.^ It was foredoomed to fail, 
but Mr. Cooke never sulked and he would have loyally 
done all in his power to float this $900,000,000 loan, if 
he had been commissioned for the service, and better 
means of providing revenues for the government had 
not offered. He chose, however, to devote his energies 
instead to the sale of the five-twenty bonds and the 
organization of national banks. 

There was still no suspicion of the large amounts of 
money — sufficient to carry on the war for several months 
— which would flow into the Treasury from his great op- 
erations in the five-twenties. When the large and steady 
in-sweep from this source began the plans for placing 
the ten-forties were delayed and the expedients of the 
new law were not resorted to in any systematic way 
until the $500,000,000 loan was closed. Mr. Chase told 
Henry Cooke that he would pass from one loan to the 
other with the Treasury notes which he was authorized 

* Spaulding*s History of Legal Tender Paper Money, p. 167. 


to sell by the law creating the ten- forties, and which 
Jay Cooke would have had bear interest at 3.65 per cent. 
in coin. Congress had fixed the rate at **not exceed- 
ing'" six per cent, in paper and Secretary Chase offered 
them at five per cent. His first sale of these notes was 
made in the autumn of 1863, the amount being $50,- 
000,000. The five-twenties prior to the autumn elec- 
tions were going off rather indifferently, largely as we 
have seen because of Secretary Chase's unwillingness to 
take a decided stand, or even to keep his promises re- 
garding the payment of the commissions to his agents. 
He now allowed it to be understood that the income re- 
ceived through Jay Cooke was inadequate for all the 
purposes of the war; wherefore he would make a sup- 
plementary negotiation. Writing in September, 1863, 
in reference to the proposed $50,000,000 issue of Treas- 
ury notes Henry Cooke said : "The money is principally 
wanted to keep up promptly the payment of the army 
which is the first care of the government, as it ought 
to be." The amount was apportioned among the three 
large eastern cities and on September 4th Mr. Chase 
announced that Philadelphia had already responded to 
the demand for her proportion, that New York had 
partially responded and that the banks of Boston wished 
the time extended to November. In December the first 
Treasury notes of this lot were not yet in the hands of 
the banks, and nothing of effective value was done 
toward the distribution of this temporary loan until Jay 
Cooke was enlisted in the service. 

Through the five-twenty operation his prestige as a 
financier was by this time enormous, although his foes 
in New York were actively endeavoring to undermine 


his position. They went so far as to appoint a com- 
mittee with Exiward Haight, formerly in Congress but at 
this time an officer of the Bank of the Commonwealth, 
at its head to go to Washington bearing false witness 
against Mr. Cooke. Chase was now offering $35,ocx),- 
ooo more of the five per cent. Treasury notes. On 
January 4, 1864, Henry Cooke wrote his brother as fol- 

I was detained so long with the Secretary that I must write 
briefly to catch the mail. He is firm and positive in his deter- 
mination to have the thirty-five millions negotiated by you and 
the national banks and is indignant at the presumption of the 
New York banks in dictating to him. Field [Maunsell F. Field, 
a new Assistant Secretary of the Treasury] tells me that he con- 
siders it very fortunate that the committee were not present at 
the interview between Haight and the Secretary, for the latter 
was very mad and did not measure words. As Haight was an 
old personal friend he took no offense, but seemed to be per- 
fectly satisfied with the Secretary's view of the case, and tel- 
egraphed the rest of the committee not to come over. In my 
interview with the Governor he told me all that passed. In 
brief it was as follows: Haight had not gotten half through 
with his newspaper extracts, etc., when the Governor stopped 
him, saying he wanted to hear no more such stuff; that he was 
responsible to Congress and the people and not to the New 
York banks, or the newspapers; that he had done what he 
thought was right and he was more than ever convinced now 
that he was right, etc., etc. He then told Haight that when he 
negotiated the first $50,000,000 with the New York banks last 
September a great hue and cry was raised about its upsetting 
the money market, etc., and that now he had thought it best to 
let all the negotiations run through one channel, so there could 
be no playing at cross purposes. He should scrupulously ab- 
stain from any policy that would do any damage to the banks, 
but he thought the national banks and the takers of the 5-20 


loan, whether banks or patriotic capitaHsts, deserved the same 
chance at the Treasury notes that the old banks had had, and he 
meant they should have it and so on. The Governor told me 
to say to you that he depended on you and our national banks 
to put the thing through, and that he hoped you would not 
trouble yourself about making any further explanations to the 
old banks, for they did not deserve them. 

The Treasury received during the fiscal year ending 
June 30, 1864, from the sale of Treasury notes author- 
ized by the act of March 3, 1863, the following sums: 

One year five per cent, notes $ 44,520,000 

Two year five per cent, notes 166,480,000 

Three year six per cent, compound interest bearing 

notes 17,250,000 


While Mr. Cooke was prominently engaged in the 
work of placing these notes he did not come to favor the 
policy/ He wrote in after years in his Memoirs, as he 
looked back at this series of operations: "I am sorry 
to record that the purpose of the bill was entirely frus- 
trated by the dilatory action of Mr. Chase and by his 
unaccountable failure to appreciate the plan proposed by 
me. The very plan of the issues, namely that they 

1 Mr. Cooke firmly held to his idea that they should be paid out directly 
to discharge government debt, and freely criticized Chase's negotiations 
with the banks. He wished the notes to replace the quartermaster's vouch- 
ers, which were bandied about in bankers* counting rooms at a discount, 
and other troublesome forms of paper and scrip. At the end of a letter 
on January i6, 1864, Mr. Cooke wrote to the Secretary of the Treasury as 
follows : 

" I will add with equal frankness that so far as my knowledge extends 
and my observations go your objections to disbursing at all times freely 
and fully to the entire extent of your need the new five per cent. Treasury 
notes seems inexplicable. I trust that the attempts to misuse them in New 
York will not be successful in biasing your own mind. The great point 
is to get them into the hands of the people, the soldiers, etc., especially of 


should be paid out by the government through the 
quartermasters and by the army paymasters and that 
no interest should be payable until three years had 
passed was demolished, and through the influences 
brought to bear upon Mr. Chase these Treasury notes 
when printed had coupons attached to them maturing 
every six months very much in the form of the later 
seven-thirties. This was not at all mv idea of the 
character of these issues for the reason that at the end 
of each six months the debt would become nothing more 
than an ordinary greenback for the time being, and the 
mischief arising by the inflation of the currency would 
be productive of evil, while the funded character of the 
issue as well as many of the inducements to fund into 
long gold bearing bonds were done away with. It was 
a fatal mistake and all my plans in reference to this 
grand scheme came to naught. I estimate that some 
hundreds of millions were lost to the country, and that 
the war was prolonged at least a year, by the failure to 
issue these interest bearing legal tender notes in the 
manner proposed by me." 

Another ad interim expedient of the Treasury De- 
partment was the attempt to increase the amount of the 
outstanding 8is. The seven-thirties of 1861 having 
three years to run were falling due in 1864 and as they 

the great west. I am aware of your oft-expressed decision not to dis- 
burse them, but you will not care if I still entreat you to change your 
mind on this subject. Occasionally and until some interest has ac- 
cumulated they may be used as a medium of circulation in a stringent 
money market, but this effect is but trifling as compared with their power 
to absorb the surplus and mischievous excess of currency. . . . Please 
try paying them out direct to the contractors, and especially in the west 
and south, and the small ones to the soldiers. Be assured they will soon 
settle down and be absorbed as loans." 


matured they were quietly and rapidly exchanged for 
six per cents, payable in 1881. Notwithstanding this 
movement they were selling at a premium and without 
crossing the wide limits allowed him by the law of 
March 3, 1863, the Secretary of the Treasury conceived 
that he might make a new issue. The "new 8is" were 
disposed of at their market price and Chase received 
$42,(XX),000 from this source in the fiscal year 1864. 
The bonds were sold at a premium averaging more than 
four per cent., a very advantageous operation for the 

The ten-forty loan, properly considered, was still to 
all practical purposes unsalable. The bonds authorized 
by the law were held in reserve until the five-twenties 
were distributed, and it was generally assumed that Jay 
Cooke would then undertake to float this large issue. 
He was by no means eager to perform a task which was 
made troublesome by Congress and still more so by 
Secretary Chase who in the exercise of his large dis- 
cretionary powers fixed the rate of interest at five per 
cent.^ To sell a five per cent, loan after having ac- 
customed the popular taste to six per cent, was obviously 
not easy.' Mr. Chase told Henry Cooke repeatedly that 

* The expiring grants of the law of March 3, 1863, were continued by 
the supplementary laws of March 3 and June 30, 1864. The issue of ten- 
forties was limited to $200,000,000 and the new 81 s to $75,000,000. 

2 *' He [Chase] contends that the absolute ' payable in coin ' of the ten- 
forties in connection with their value as a banking basis makes them as 
good as S-^s." — Fahn. to J. C, July 7, 1864. 

*" When the last of these bonds were sold in 1864, the Secretary ought 
to have put the ten-forties on the market and offered the same rate of 
interest. If he had they would have been eagerly taken for they ran ten 
years instead of five, before the government could redeem them, and were 
therefore a better bond for the people to buy. Had he done so all the 
money needed would have been easily obtained. Instead of pursuing this 



the machinery created for the sale of the five-twenty 
loan would be used for the distribution of the ten-forties. 
But he did not urge the enterprise upon the Secretary 
for he did not think it "advisable to begin selling that 
loan until the Department had at least lOO millions 
printed and on hand, so that there could be no hitch or 
delay in deliveries, as was the case with the five-twenty 
loan." ' 

Jay Cooke had very definite ideas as to the course 
which should be pursued at this time as in all other 
financial emergencies. He urged Mr. Chase to close 
out the 5-20 loan "with eclat/' at once sending it to a 
premium. That operation would be exhausting and 
for thirty days at least the Secretary should endeavor 
to meet his wants with Treasury notes when he could 
safely begin to offer the i(>-40s.^ 

In this new operation Mr. Cooke repeatedly urged the 
Secretary to look to the sub-treasuries and the national 
banks. "I don't wonder that after your experience 
with the five-twenties you don't want to do up the ten- 
forties," wrote his friend Messersmith, "but I don't be- 
lieve they will go unless you take hold." 

Mr. Cooke had long conferences with the Secretary 
of the Treasury concerning the new loan in which he 
as usual was rather intractable. He was unwilling to 
go forward without a final consultation. On March 

obvious policy, Secretary Chase, without taking advice, and contrary to the 
opinion of the wisest men of the time, boldly determined to try an ex- 
periment. Though he had now been at the head of the Treasury Depart- 
ment more than two years, he had learned but little and was just as un- 
willing as ever to listen to an adviser." — Bolles's Financial History of the 
U. S. J861-1885, p. 104. 

1 His letter to Jay Cooke of Feb. 12, 186 • 

2 J. C. to Chase, Jan. 16, 1864. 



loth Henry Cooke wrote: "The Governor is very 
anxious to see you before making his arrangements for 
the sale of the ten-forty loan. Being governed by your 
repeated expressions of opinion, verbally and written, I 
have favored the plan of committing the negotiation to 
the national banks. He has about concluded to do so but 
will determine upon nothing positive until he has a full 
and satisfactory talk over the whole matter with you." 

Mr. Cooke's visit "cheered him up and did him good 
generally,*' wrote Henry Cooke on March 19th. Chase 
telegraphed directly to the financier again and again in 
March and April asking him to come to Washington * 
for conferences. Never before had the Secretary taken 
anyone so closely to his heart as in this time of difficulty 
when the banker was almost constantly in motion be- 
tween Philadelphia and Washington, and Philadelphia 
and New York on confidential missions to sustain the 
credit of the government, going back and forth as he 
himself said "like a shuttlecock." 

Many of Jay Cooke's five-twenty agents were eager 
to have a hand in the ten-forty operation. I. H. Rhorer 
of Louisville, Ky., wrote: "As the government never 
before effected so cheaply and safely to itself and so 
conveniently to the people an operation of such magni- 
tude as your sale and distribution of the five-twenties, 
I presume the new loan will also go out through your 
hands ; in which event I respectfully ask to be continued 
your agent at this place and to be furnished as soon as 
it may be convenient such facts regarding the bonds as 
may enable me to advertise." Preston, Willard and 
Kean of Chicago wished an exclusive agency for the 

* MS. Records of Treasury Department 


Northwest. Fisk and Hatch, Mr. Cooke's faithful New 
York agents, wrote on March 25, 1864: 

Cisco and the First National Bank commenced receiving sub- 
scriptions for ten-forties to-day, allowing no commission. A good 
many of our customers have been in to see if we were taking sub- 
scriptions and most of the bankers and bank officers say that if 
the loan is to be sold through the sub-treasuries and national 
banks only, and no commission is to be allowed they won't 
bother with it. Most of the men who frequent our office, com- 
prising many of the best and most prominent bankers and bank 
officers in this city. New York State and New England, are very 
emphatic in the expression of the opinion that the true way 
and probably the only effective way to sell the loan is through 
the old five-twenty agencies. We hear this a hundred times a 
day and it is our candid opinion that the public interest in the 
loan will be very much less if the people do not find it offered 
to them through the old channels, for though we say it v/ho 
perhaps should not, the fact cannot be wiped out that the old 
five-twenty agencies are very popular institutions. 

But Mr. Cooke did not undertake the work, although 
he loyally supported the operation. On April 11, 1864, 
he wrote to Chase concerning a statement which had 
been made indicating his disappointment because the loan 
had not been committed to his care : 

How he ever obtained an idea that I wished the loan again 
in my hands I am at a loss to know. He ought to know that 
I never say one thing and mean another. I would not on any 
other consideration than absolute duty undertake such a task 
again. I am only too happy to be free once more and also happy 
that I may be useful in helping on the 10-40 loan as I shall do 
in every possible way, both by keeping its interests constantly 
before my mind and by urging all within my influence to engage 
in its sale. 

Again there was much annoyance concerning the 
question of commissions. It was provided that an al- 


lowance of one-fourth should be made to national banks 
upon their bond sales, one-tenth to cover necessary ex- 
penses (one-half of one-tenth for advertisements) which 
left three-twentieths net. Thus upon a $i,ooo bond 
the gross commission was $2.50 of which $1 must be ex- 
pended (50 cents in advertisements) leaving $1.50 to 
reward the distributor. The sub-treasurers were early 
authorized to allow one-eighth discount upon their sales 
and the national banks of the East, being obliged to 
follow the example, had very little remaining to pay 
them for their trouble and risk. This was as Mr. Chase 
desired it to be, and Mr. Cooke supported him in his 
experiments of employing the banks which were created 
with the thought that they would become useful fiscal 
agents of the government. They owed nmch to the 
nation and it was but just that they should render 
it a service in return. Outside agents, such as Jay 
Cooke and Company's Philadelphia and Washington 
houses, were to act on the same terms as the national 
banks and a competition began in which commissions 
were shaded and re-shadcd very delicately. 

The general subsidization of the press was continued, 
but necessarily on a smaller scale than before because of 
the scattered way in which it must be done and the 
trifling amount set aside to meet advertising charges. 
Mr. Cooke directed some of the Secretary's experiments 
in this field. On May 4, 1864, W. B. Shattuck, a New 
York advertising agent, said that he had made a second 
draft of $5,000 on the First National Bank of Washing- 
ton to be charged to the advertising account of the ten- 
forties.^ He wrote: "I have sent the advertisements 

^ " I have set apart $10,000 for immediate expenses, intending^ to quad^ 


and editorial articles to not less than i,8oo papers. It 
will require two or three weeks to get the full effect, but 
I think it is already beginning to tell. The editorials 
are coming in splendidly." 

William Evans, Mr. Cooke's London agent, who was 
asked to give an opinion as to the feasibility of selling 
the bonds in the English market was a good pupil. He 
was well convinced of the value of the newspaper as an 
aid to bond-selling and said : "It is imperative in order 
to create a public feeling in favor of the bonds to expend 
a certain amount in obtaining the influence of the press 
throughout the country. It is lamentable to say it," he 
continued with some lingering notions about the patriotic 
impulses by which editors should be guided, "but it is 
absolutely necessary. If we could obtain the active aid 
of the leading journals we should soon have a furore in 
your securities." 

Neither at home nor abroad did the ten-forties gain 
many friends. In April, 1864, John Wills wrote to Jay 
Cooke from Baltimore: 

The new ten-forty goes slowly here and simply because it has 
not been rightly put upon the market. The people have gotten 
so accustomed to your mode of distributing loans that they can 
scarcely be brought to anything else. 

A Baltimore paper remarked: 

We are not advised of any subscriptions in this city worth 
speaking of to the new ten-forty loan recently offered for sale. 
There appears to be no fixed or permanent mode adopted by 
which it is or will be brought, like the celebrated and popular 
five-twenty loan, within easy, convenient and familiar reach of 
the great masses. It should be the policy of our government 

ruple that amount if I find that it can be properly employed." — Chase to 
Cooke, Apr. 8, 1864. 


with these bonds as with the five-twenties, in order to secure full 
confidence and reap a permanent advantage from their sale, to 
have them sold broadcast among the people, thus making the 
burden not only a light one in the aggregate, and easy to be 
borne, but one which must fix still stronger the combined interests 
of all good patriots. 

A writer in the Evening Telegraph of Philadelphia 
said : 

We do not think that the plan of taking subscriptions to the 
new loan of 10-40 at the rate of interest at which it is put upon 
the market, is wisely done or maturely thought over. Jay 
Cooke & Co., by their wide-spread business relations, the pres- 
tige which is attached to them from their success with the 5-20 
loan, and the indomitable energy which characterizes the head 
of that house, would have secured ten millions where the present 
mode will secure one. To be sure, we do not believe that so 
sagacious a man as Mr. Cooke would have advised a 5 per cent, 
loan at all, and we can only wonder what pernicious influence 
has induced the head of the Treasury to try it. 

Every man who holds a thousand dollars' worth of greenbacks 
will reason in this wise : — Why, a month or so ago I could have 
invested this thousand dollars with the government, and would 
have received sixty dollars per annum in gold as interest; nmv 
all the government is willing to allow me is fifty dollars. Have 
these greenbacks depreciated in the estimation of the government 
itself? I must look to this, and try some other investment. 

It was soon made clear to the country that the ten- 
forties could not l)e sold rapidly enough to pay the ex- 
penses of the war, as it was being conducted in 1864, 
even with large supplementary issues of Treasury notes. 
Mr. Cooke, whose advice was so little valued by Con- 
gress when it passed the loan bill, if he had been of this 
disposition might have laid the blame at the proper door. 
In order to establish the depository system in connection 


with the new national banks Mr. Chase had locked up 
about $30,000,000. In May, 1864, he had "some 150 
depositories all over creation," Fahnestock complained, 
"instead of having only a few at points where they are 
needed." The want of this sum seriously embarrassed 
the Treasury and as Fahnestock wrote on May 20th 
from Cooke's Washington office, the ten-forties were not 
going "half fast enough over the way to make even rea- 
sonably prompt payments without more circulating 
notes." It was alleged of the Department that it did 
not keep in stock a full assortment of bonds, that it 
risked its shipments in the mails instead of committing 
them to the care of the express companies, and again 
that it was dilatory in making its deliveries to pur- 

Mr. Cooke's great financial fame and wide connections 
led to rather large sales through his houses, and the 
early appeals for subscriptions were moderately ef- 
fective. From March 26th when the instructions were 
issued to the national banks, to May 7th, $44,606,100 
of the bonds were sold * and on June 30th, at the 
end of the fiscal year, $73,337,186 had been distributed. 
But for the quarter ending September, 1864, the loan 
yielded less than seven millions. In December when the 
total was nearing $100,000,000 it was believed that the 
Secretary would close it for that amount. On December 
1 6th, John A. Stewart who had succeeded John J. Cisco 
as Assistant Treasurer at New York wrote to Jay 

"If Mr. Fessenden should stop the subscriptions for 
10-40S to-morrow, provided the amount is made up to 

1 From Department advertisements. 


one hundred millions what do you want ? Let me know 
by telegraph. The balance required is supposed to be 
about 17,000,000 and I can get it in fifteen minutes/* 
Indeed the outlook was so much more hopeful that the 
Secretary determined to stop at a specified date, January 
7, 1865, instead of at the completion of the sale of 
any certain number of millions. John Thompson and 
other New York bankers went to Washington to urge 
this action and there was a marked flurry at the end. 
The bonds were bought largely by banks which were 
about to organize under the national system, as in New 
England, where they were coming over "in a body."^ 
Bankers and brokers also laid in abundant stores ex- 
pecting a rise in their value after the public was assured 
that no more would be issued. The announcement that 
the loan was soon to be closed came while the "Tycoon" 
was in Sandusky, but his Philadelphia managers pre- 
pared a circular urging investors to embrace their last 
opportunity. The subscriptions on January 4th had 
reached a total of 117 millions. From all sources the 
returns aggregated several millions of dollars daily, and 
on the closing day the total was pushed up to about 
$135,000,000, some orders being entered in the next 
week as of previous date. It is true that this was not a 
very great yield for a $900,000,000 loan, but it was so 
much larger than it at one time promised to be that there 
was ground for congratulation. The feeling was not 
immediately shared by the subscribers for, instead of ris- 
ing buoyantly like the five-twenties, the market was life- 
less, and the bankers who had taken large amounts of 
the bonds for gradual distribution at an advance were 

^H. D. C. to J. C, December 19, 1864. 


doomed to disappointment. In a short time the loan was 
quoted below par and it was not until Mr. Cooke was 
made the agent for the sale of the seven-thirties at the 
end of the month that they showed signs of reviving 

This loan had dragged and practically failed because 
it bore five instead of six per cent, interest, blame for 
which arrangement is largely to be laid at Secretary 
Chase's door; because it was not placed in Mr. Cooke's 
hands as the five-twenty loan had been, since by him 
"the negotiation of the ten-forties even at a lesser rate 
of interest, might have made a success equally rapid and 
brilliant ;" * and finally because of the general depression 
and disorder on the military field, in the stock markets 
and in the minds of the people. Gold was steadily ad- 
vancing as the war was protracted and the government 
issued increasing amounts of paper money. The state 
banks were still swelling the flood with their emissions 
and for the time being a feeling of distrust was again 
uppermost. The sanguine spirit which had prevailed at 
the close of the year 1863 and the beginning of 1864, 
when the five-twenty loan was being taken with so 
much avidity, had given place to very diflferent senti- 
ments. The strong guiding hand of Mr. Cooke no 
longer dominated the stock exchange and the newspaper 
press. The unhappy state of the country was reflected 
in the New York Gold Room, the barometer by which 
the financial weather was rather accurately gauged. 
Mr. Cooke was particularly active in discouraging the 
spirit of speculation. He embraced every opportunity 
to attack those who sought to profit by the traffic in gold, 

1 Schuckers, p. 349- 


In his Memoirs he speaks of this disorder and his part 
in trying to suppress it as follows : 

"The city of New York, whilst containing, during 
war times, many noble and patriotic citizens and insti- 
tutions, was undeniably the centre and very hotbed of 
Southern sentiment and scheming. Being filled with 
foreigners and the great place of rendezvous of the se- 
cret emissaries of the South and disloyal politicians, it 
became the centre of speculation in gold and every 
species of material and produce which could be turned 
into gold by trans-shipment abroad. This speculation 
and the rise in the price of specie were so persistent and 
continuous that even many good citizens thoughtlessly 
entered the trade and thus contributed to the deprecia- 
tion of our bonds and currency, and to the increase of 
the cost of living of our soldiers and their families. The 
editors I employed were instructed to make constant 
warfare upon this speculative disposition and to portray 
the want of patriotism of those engaged in it. Articles 
were constantly written and published revealing the ef- 
fect of such speculation, and calling upon all good citi- 
zens to refrain from engaging therein. The result of 
these efforts was of course important and in consequence 
of the articles many refrained from indulgence in so 
tempting a field of speculation. I asked Mr. Wilkeson, 
one of my editorial writers, to give particular attention 
to this subject. 

"On one occasion an old friend, a manufacturer, who 
had made vast sums out of his army contracts came into 
my office and asked to see me. He was a German and 
I had known him for over twenty-five years during 
which time he had struggled from poverty to riches. 


Once having failed and lost all his accumulations a few 
of us held a meeting in his behalf. Having examined 
into his condition he, through our influence, obtained an 
extension from his creditors and during the early periods 
of the war he had paid off every dollar of his old debts 
and collected fully a half million dollars of capital. Un- 
der these circumstances, having heard that he was ex- 
pressing doubts as to his country's stability, while pur- 
chasing large amounts of gold which he was hoarding 
up, I felt that I had a right to endeavor to induce him 
to change his course. His first question was : 'Mister 
Cooke, vat you tink of gold?' *Mr. B.,' I said, *I want 
to have a talk with you. I have heard that you, my 
good old friend, have become a Copperhead, and an 
enemy of your country, and a robber of the soldiers of 
their little pittance, bringing starvation to their wives 
and children at home.' 

"Mr. B. expressed astonishment at such an attack 
but upon my reminding him that he was one of the worst 
enemies we had to contend with, namely a gold specu- 
lator, and giving him illustrations of the effect of his 
action he became convinced that it was wrong for him, 
who had no use for gold in his business, to make any 
such purchases, or hold or profit by that which he would 
withdraw from the market. I showed him that for the 
purpose of gaining a few thousand dollars which would 
come to him through the misfortunes of the country he 
was daily stabbing that country, and assisting its worst 
foes by breaking down our financial credit. Above all 
it was making him a disloyal man, for I had myself 
heard him express the sentiment *dat we could not vip 
dem repels.' His friends had told me of other symp- 


toms of disloyalty produced by this petty and wicked 
dealing in gold. On every occasion when our armies 
had met a reverse, and gold had advanced several points 
in consequence, he of all his neighbors was cheerful and 
buoyant and chuckled over the fact that he made a few 
thousand dollars by the rising of gold ; and on every oc- 
casion when our armies had been successful, having per- 
haps won some great victory and all our people were re- 
joicing, and gold had rapidly dropped several points, 
he of all his neighbors was gloomy and depressed, and 
not in the mood in which a loyal and patriotic man 
should have been. I have reason to believe that he sold 
his gold and placed every dollar of the proceeds in gov- 
ernment bonds, as I had advised him to do. This anec- 
dote with many of a similar character,* Mr. Wilkeson 

^ One of these incidents was described in the newspapers as follows : 

" An honest Schuylkill County German merchant who had been pros- 
pered and had accumulated more money than he could employ as capital 
in his business came to a patriotic banker in Philadelphia and said: 
* I haf got some moneys and I vant you to buy some golt mit it* 
*Why Schultz, what do you want gold for?' responded Mr. Cooke. 
* That isn't a thing you sell in your store.' 

" * Dat I know, but I vant to make some moneys on de rise. Peebles 
says it is going oop and I can make a tousand tollars, I tink.* 

" * Schultz, you dear old fellow, don't you know that if you buy gold 
you will be a rebel?* said the banker. 

" * Nein ! ' said Schultz, emphatically, in a tone of resentment. * I be no 

"'Suppose you buy $10,000 of gold,' Mr. Cooke continued; 'suppose 
that some morning you read in the papers in big letters " Terrible dis- 
aster to the Union cause. Grant's army routed and destroyed. The 
rebels marching on Washington.'" 

" ' I should say dat was tam pad news,' interrupted the German ex- 

" * Yes, but wouldn't you say right off, " This, however, will put gold up. 
Bad for the Union but it is good for my ten thousand." Don't you see, 
Schultz, that in buying gold you instantly make the interests of the rebels 
your interests, that you bribe yourself to wish them to succeed and to 


caused to be published in the New York, Philadelphia 
and other newspapers and I have no dpubt that the in- 
fluence thereof effectually deterred many others from 
speculating in gold. 

"A similar anecdote was also published by Mr. Wilke- 
son concerning an interview I had one day with the 
president of the Gold Board of Philadelphia. He was 
also a German and came to see me on business, when I 
seized the opportunity to lecture him, telling him how 
disloyal was the work in which he was engaged and 
that I had never know^n him to sell a government bond 
or recommend one to his customers. I appealed to him 
to open his office to the traffic in government bonds, 
gave him an assortment of circulars and cards for his 
windows, etc., and soon had the satisfaction of receiving 
large subscriptions through his influence." 

Being a very practical man Mr. Cooke believed in 
practical methods. It was his wish to confront the 
"bulls" on gold and the "bears" on their country in their 
own arena and, with Mr. Chase to support him in his 
operations he several times very effectively directed 
campaigns that left the market in a very much more 
wholesome state when he retired from it. Gold which 
was sold at 133 at the end of 1862 was quoted at 151 on 

wish your country and your countrymen to fail. And if these unholy 
desires, Schultz, don't define a rebel there is no language to define one. 
Don't you see that buying gold inevitably turns honest, patriotic, de- 
voted men like you away from the cause which they ought to support, 
and which they think they do support, but which they cannot support be- 
cause they have made it for their interest not to support it. Don't you 
sec it, dear old fellow ? * 

"'Be sure I do,* said the simple-hearted man with humility and honest 
gravity. ' Put all of dat in seven- tirties. Mcin money goes mit mein 

t ft 


the last day of 1863, after having reached 172 in 
February, 1863, its maximum price for the year. 

The high wave of disorder made its appearance in the 
summer of 1864. Already in March of that year there 
were premonitions of the great rise and legal steps were 
taken to discourage, if not to prevent the speculation. 
On the eighth of that month Henry Cooke wrote to his 
brother Jay as follows: 

Governor C. is getting verj' anxious about the continued ad- 
vance in gold and is determined to stop it if possible. He is at 
last thoroughly worked up on the subject. Your despatches re- 
ceived. Be assured we are doing all in our power to procure 
the passage of a good gold law, and the prospect of success 
grows better daily, and now that the Secretary has taken hold 
of the matter earnestly I hope for the best results. 

On the same day Jay wrote to Henry Cooke : 

Gold 64^/2 to-day. Don't fail to see that bill passed at once 
as it was originally intended, viz., giving Gov. C. full power to 
sell as he pleases at any time and in any way. If this power 
was given to me I would agree to forfeit a million dollars if I 
failed to put down gold to 33 and keep it about that for a 
year steady as a clock. Unless this is done gold will surely 
go to 200 and a great panic ensue. . . . Hold the whip over 
these speculators and they will be entirely driven from the 

The first movement was a joint resolution of Congress 
which was passed on March 17th authorizing the Secre- 
tary of the Treasury from time to time "to anticipate 
the payment of interest on the public debt by a period 
not exceeding one year" and to "dispose of any gold in 
the Treasury of the United States not necessary'* for 
this purpose. In plain terms Mr. Chase could now sell 
in open market coin paid to the government through 


the custom houses, its only source of specie income. 
Even while Congress was at work giving the bill its last 
touches the gold jobbers raised the premium from 60 to 
69. Mr. Chase himself seems to have had some previous 
misgivings as to the real value of the policy so warmly 
recommended to him, although he was repeatedly 
urged to an exercise of his powers/ On March 22, 
1864, Fahnestock had learned in Washington and wrote 
Jay Cooke that "Clark, Dodge and Company as one of 
many loyal and substantial houses were ready and will- 
ing to buy a million of gold at sixty any day the Secre- 
tary, or anybody else would sell and that any reason- 
able amount he could put in the market would be thus 
immediately absorbed. He [Fahnestock's informant, a 
New York banker] attributes the advance in the face 
of the passage of the bill to the necessities of the 'shorts,* 
who on account of the great scarcity on the street and 
the magnitude of their transactions are obliged to buy 
from day to day." 

Chase was "much perplexed,'' Mr. Cooke was advised 
in another letter, though he was "willing and anxious 
to exercise his powers in the wisest way.'* He con- 
sulted John J. Cisco and other New York counsellors 
and finally, in April, when gold rose above 175, which 
was fixed in the popular mind as the point beyond which 
great danger lay, he visited New York. Jay Cooke was 
also in the city and Chase sent for him to come to Cisco's 
office, where they formulated a plan of procedure. This 
seems to have been April 14, 1864.^ "I had my or- 
ders," the banker wrote victoriously in a "private" let- 

* Schuckers, p. 358. 
2 Ibid. 


ter to his brother Henry on that day, "and you can 
see results of the first day's work. It opened at 89 and 
closes offered at 74^^. I sold about two millions, all 
deliverable to-morrow. If Thompson [Jay Cooke and 
Company's code word for the Secretary of the Treas- 
ury] is firm they will squeal before Saturday night." 
Mr. Cooke tells of the adventure in his Memoirs : 

"The gold speculators and the enemies of the North 
had boldly proclaimed that gold, then about 170 [1. e., 
$70 premium. Price and premium are used indiscrim- 
inately] would soon rise to 500 and 'Old Chase's green- 
backs/ would become as worthless as Confederate 'shin- 
plasters/ I had on several occasions pleaded with Mr. 
Chase to allow me to teach these rebels and greenback 
slanderers a lesson they would not forget and I told 
him I could do this, and at once bring gold down to a 
fairer level by the use of only a few millions of the 
$35,cxx),ooo of gold then in the New York sub-treas- 
ury, returning the specie at a large profit, if it were re- 
quired at any time. From an investigation I had made 
I was sure that not more than $12,000,000 to $18,000,- 
000 of greenbacks were then held by the New York 
banks, requiring the sale of not more than $6,000,000 
or $7,000,000 of gold to absorb every dollar of them into 
the Treasury and to cause them to rise temporarily 
above bank credits. 

"One morning Mr. Chase arrived in New York at 
a time when I was also there. The gold men, hearing 
of his arrival, rushed the price of gold up to 188. 
About noon he sent for me to come to the Sub-Treas- 
ury and asked me all about my plans. Although very 
nervous and doubtful about the policy of lessening his 


gold supply by a single dollar the crisis was so grave that 
he could see no other way than to give me authority to 
carry out my plans, which in the presence of the sub- 
treasurer, John J. Cisco, he did, telling Mr. Cisco to 
honor my instructions. This I have always felt was a 
very bold act on Mr. Chase's part and shows how he 
had come to place implicit confidence in my advice and 
judgment. Mr. Chase returned to Washington and I 
at once, that afternoon, met confidentially David Craw- 
ford of the firm of Clark, Dodge and Company, of which 
I had once been a member. I knew my friend David 
to be a man in whom I could fully rely to keep so vast 
a secret, even from his own partners, and that he had 
the discretion and wisdom to carry out my instructions 
to the very letter. We decided to begin sales of gold 
the next morning, but sell no more on that day than 
would be necessary to bring the price down to i8o, so 
as not to create suspicion regarding our plans, although 
he told the purchasers that he would require in pay- 
ment greenbacks, or checks marked 'good,' which 
would draw greenbacks. 

"The first day we sold $2,700,000 and the next morn- 
ing before anyone had yet reached Wall Street I carted 
the $2,700,000 from the Sub-Treasury to Clark, Dodge 
and Company's office and stored it away under their re- 
motest and most secret counters; whence it was with 
as little show as possible delivered rather late in the 
day, checks and greenbacks being turned over to me 
in return. I took all these to Mr. Cisco, requesting him 
to draw all the checks in greenbacks before three o'clock. 
In the meantime Mr. Crawford had disposed of over 
$2,500,000 more of gold and the price fell to 170. The 



same operation was repeated, the greenbacks being 
drawn from the banks and the next morning when Mr. 
Crawford began selling the price dropped so rapidly 
that by the time he had disposed of $1,250,000 a panic 
prevailed. Stocks which were very much inflated be- 
gan to tmnble and the rebel or Copperhead firms to 
suspend. The banks making demands upon the pur- 
chasers of the gold to provide the greenbacks to meet 
their checks the Worthless greenbacks' rose to a pre- 
mium. One firm to which David had sold $500,000 of 
gold offered him 3 per cent, premium for the privilege 
of paying in a check not callinj:^ for greenbacks and by 
this time the fact that the Sub-Treasury was selling gold 
and would sell $20,000,000 more if it were required to 
break up the conspiracy against the credit of the gov- 
ernment, became noised about Wall Street and the re- 
sult may be imagined. 

"I saw at once that we had gone far enough and that 
the power of the nation was uppermost. I therefore 
ordered a suspension of sales. To have gone farther 
would have involved the banks and mercantile estab- 
lishments and other business interests in a still vaster 
panic. Only $6,650,000 of gold had been sold, the 
price had fallen to about 160 and could have been re- 
duced much more, but for the reasons given above it 
was wise to steady things. For some time thereafter 
it only required my visiting New York for the whole 
tribe of government haters to suspend their efforts. I 
have always regarded this as one of my most success- 
ful financial efforts for the preservation of the national 
credit and the great responsibility Mr. Chase took upon 
himself in authorizing this sale of gold shows that upon 


occasions this great man was capable of great deeds." * 
Mr. Cooke was still in New York on April 20th when 
he wrote to Chase: "I must go home in a day or two 
as my business is 'going to the dogs/ or rather when I 
am away the house loses ground. Still I am willing 
and glad to be useful, and also glad that I can say I 
am working without reward, except the reward of help- 
ing you and my government.'' 

The next day in his report to Chase the banker said 
that he had sold $500,000 more gold, making in all $7,- 
000,000 since the beginning of the operation in New 
York. But the Secretary would not go far enough to 
please the vigorous financier, complaining of the lack 
of authority. "You have them [the gold speculators] 
in your power," wrote Cooke. "Why relinquish the 
grasp when so near the accomplishment of the just and 
righteous end? It seems to me that I am the only one 
imselfish enough to desire the government to get the 
entire upper hand, even if it does hurt our own pockets. 
I know that you are true and faithful and unselfish, but 
I could name many here whose actions are entirely the 
other way." 

After pondering these hard words over night, Cooke, 
as was always his custom, when he had spoken unkindly 
of others, repented of them and on April 22d in another 
letter to Chase said : "I wrote perhaps too warmly last 
night. Still I wrote under the impression that no one 
here heartily loved their country better than their pock- 

* The actual quotations of gold at this date do not fully correspond 
with the prices as they were recollected by Mr. Cooke, in recalling the 
stirring experience, but his may have been the street rates, a supposition 
which finds some support in Schuckers's Life of Chase, p. 358. 


The appearance of the government in the New York 
market as a gold "bear" called for the management of 
a daring spirit and a nature of irreproachable integrity 
and patriotism. With large private banking connec- 
tions it might have been charged, as it would have been 
had the news of the transactions come to public knowl- 
edge, that Mr. Cooke was using his information con- 
cerning government sales of coin to accomplish the en- 
richment of himself or his friends. His movements were 
unknown to his partners or to the members of his own 
family. Fahnestock once wrote to William G. Moor- 
head regretting that they did not know what Jay was 
about. If they could find out they would be able to 
make a good deal of money. Again on April 28th after 
another descent upon the New York speculators Fahne- 
stock wrote to Mr. Cooke: "You're growing to be a 
regular Merrimac in Wall Street. Can't go there 
without raising a row among the stock and gold job- 
bers. Wish I knew what you are about that without 
detriment to the public service we could load or unload 
as might be best. But we have to go it blind — ^just as 
they do at the Department, for Harrington and Field 
and the others ask me where the Secretary is and when 
he will return." 

"Presume gold will go up again when you return," 
Fahnestock continued on April 29th. It was a favor- 
ite dodge of the "bears" to put upon the wires a despatch 
from Philadelphia that Jay Cooke was going to New 
York or was that day in New York, and instantly all 
the "bulls" would make haste to cover their contracts. 

Throughout May Cooke was still on guard. On the 
lOth of that month he told Chase: "I am at your 


service always and not even my good wife shall know 
of my trust." On May 30th Chase wrote from the 
Treasury Department: 

%/^^/m<«^ ^^^ 

kMs^^^L0,^ 7^ iHAJU ymK.y/i^ ^tf^Sv^ i^*/^^ 

\iJL ,ju»jL 0,0^ 4Krl^ ^, /^^<^;^-?< 

U^.'^^^'^r?- A^ 

[My dear Mr. Cooke: It seems to me you had better go to New York 
and confer with Mr. Cisco as to the best means of checking the advance 
in the price of gold. I would go myself if my presence did not seem so 
absolutely necessary here. 

Very truly yours, 
Jay Cooke, Esq. S. P. Chase.] 

But such artificial devices for improving conditions 
that are intrinsically bad are of little permanent avail. 
Moreover they call for repeated applications of the rem- 
edy which in the end ceases to have any curative power. 
On May 4, 1864, Frederick Kiihne of Knauth, Nachod 


and Kiihne, bankers of New York and Leipzig, wrote 
to Cooke as follows: 

My dear Mr. Cooke: 

Since you left we have had further news from Europe and 
what news ! I must say I am sadly afraid that the high premium 
of 1 80% will brew serious mischief there by inducing people to 
return our bonds. 

Can you not induce Mr. Chase to put down the market again 
by selling some more gold and exchange. It can easily be done 
without disturbing the money market if done secretly and against 
checks. And I again express my full convictions that sales of 
gold made, no one knowing whence it comes, are all the more 
effective. If it is known that the government is selling, the 
speculators know exactly how much there can possibly be forth- 
coming and they look the danger fully in the face, and operate 
accordingly. But gold sold nobody knowing its origin (nor 
suspecting it) is apt to create the impression that it is "the 
people at large " who sell and once successful in creating that 
impression you will see a tumble such as you never expected, 
because the speculator cannot calculate how much gold there 
may be forthcoming, or whether any one of the combination is 
not selling out in spite of the pledge. 

A premium of 180% you must admit is very dangerous. How 
easily may a panic spring up which the government may not 
have it in its power to control. Such an event would be as 
disastrous as the capture of Washington and the defeat of Grant. 
And must we let it come to this while we have the power to 
prevent it? Indeed something ought to be done and speedily. 
Can you not induce some of the members of the House to have 
the gold bill taken up and passed. That passed if we only 
obtain a reduction of 20% and that is easily brought about, it is 
a great gain. 

Would it not be well for Mr. Chase to have his secret agents 
here for the purpose of watching and regulating the credit of 
the country just the same as the governments of Great Britain, 
France, etc., have their agents in London and Paris who, accord- 


ing to circumstances buy or sell Rentes and Consols ? Just as well 
such government agents at New York who should buy or sell 
gold. If these transactions leave a profit (as they certainly will 
in proper hands) let the Sanitary Commission or the orphans and 
widows of our brave soldiers have the benefit of it — if a loss 
let it be paid out of the secret service fund. By such means 
most of the governments on the other side regulate and main- 
tain their credit and I hope Mr. Chase will see the propriety of 
making a similar arrangement here. Had it been done two years 
ago I cannot doubt that gold would not be within 50% of to- 
day's premium. This is a bold operation but in my opinion it 
is never too late to take proper measures to effect good. While 
I am writing here gold has declined to 178. Had we a gov- 
ernment agent here, f. e. was the government's interest repre- 
sented in one of its most vital points with $100,000 or $200,000 
the market could have been hammered down three or four or 
more per cent. So much down is a clear gain. I should be 
at a loss to say who is a proper party to be government agent. 
You may know better. Loyal the man has to be of course. 
Believe me, yours truly, etc. 

Already as indicated in Mr. Kuhne*s letter a bill 
looking to more stringent measures against the gold 
speculators was making its way through Congress. It 
had passed the Senate on April 16, 1864, but not in the 
form which Jay Cooke had recommended. It was an 
anti-option bill, designed to prohibit "time sales," the 
selling of gold for delivery at a future time when the 
seller did not possess his commodity. Violators of the 
law might suffer a fine of from $i,cxx) to $io,ocx), or 
imprisonment of from three months to one year or both. 
The measure did not pass the House until June 14th 
and it was signed by the President on June 17th. Its 
provisions, of course, were not enforceable, especially at 
such a time. The result, in connection with the military 


situation, and the resignation of Chase which was ex- 
pected to dispose of Mr. Cooke as an active factor in 
manipulating the market was very disastrous. The 
"gamblers'' contrived to raise the premium until gold 
sold at 200 and 250 and when Secretary Chase sud- 
denly retired on July 1st in the midst of the country's 
worst financial troubles the price was bid up to 280 and 


How useless the law was in the accomplishment of 

I This was the quotation of July ii, 1864, the highest point reached dur- 
ing the war. Whatever their sins it was the custom roundly to denounce 
the gold speculators as " traitors." Copperheads and sympathizers with the 
South. The greenback was the test of patriotism, to admire it was a 
loyal exercise, and to question its value and prefer gold savored of high 
treason. In the same way patriotism was expected to give value to paper 
money during the Revolutionary War, when the theory failed even more 
signally. As an evidence of this temper note this letter of Henry D. Moore 
from the " Treasury Department of Pennsylvania," dated June 22, 1864 : 

"Dear fay: 

" I sec by the papers this morning that the New York Board of Brokers 
showed their secession teeth yesterday by howling over the passage of 
the gold bill and nominally quoting gold as high as 206 and 208 and 
threatening its repeal, etc., etc. These facts convince me that the bill 
hurts them some and they are taking this method to frighten Congress 
and the government into its repeal. I wish that Congress and the gov- 
ernment, instead of repealing it, would pass another act, making it still 
more stringent and severe. These men are doing more to injure and 
weaken the government by their actions than the rebels are and they 
ought to be reached in some way by the strong arm of the law. I was 
pleased indeed to see that our Philadelphia board acted like patriots and 
loyal men in conforming at once to the laws of the country. The fact 
is New York is a nest of secessionism and treason and just about a year 
ago it culminated in blood and murder in the streets of that city, and 
if these gold gamblers are not careful they will raise a whirlwind which 
they will not be able to control. What are they trying to do? Why, to 
depreciate the credit of the government and its securities in which every 
poor man is more or less interested. And how much longer do you sup- 
pose the masses will tolerate the action of these men who depreciate their 
money and increase the price of all the necessaries of life at a fearful rate? 
They are sowing the wind, and if they are not very careful they will 
reap the whirlwind." 


Its purpose was indicated by the immediate course of 
events and on July 2nd Congress very wisely and 
promptly repealed it, leaving the market to its natural 

Another step taken after some deliberation in the hope 
of checking the advance in the gold market was the 
issue of gold notes as provided in Section 5 of the $900,- 
000,000 Loan Act of March 3, 1863. H. C. Fahne- 
stock writing to Jay Cooke on March 23, 1864, warmly 
favored this policy. These notes being receivable, as 
specie, for duties on imports, their use he believed would 
"largely reduce the daily demand which is now met only 
by purchase in the market." They were issued only at 
the New York Sub-Treasury and some Philadelphia im- 
porters vigorously complained to Mr. Cooke, who was 
constantly looked to to abolish evils and correct inequal- 
ities over which he had no control, that they were im- 
able to procure them from Mr. Cisco promptly and at 
advantageous rates. The gold certificates, like the gold 
itself, became subjects of speculation and this device 
was soon abandoned also. 

On several occasions foreign exchange had been sold 
by the Assistant Treasurer in New York in the hope of 
breaking the gold market, and it was even suggested 
that in spite of the objections of both Secretary Chase 
and Jay Cooke, who believed that it would be a na- 
tional humiliation and at the same time very expensive 
to place government loans in Europe, Mr. Cooke and 
George Harrington should go abroad to negotiate the 
sale of a large block of bonds for gold with a view 
to bettering the monetary situation.* Now again, as 

1 Letter of H. C Fahnestock to Jay Cooke, June 14, 1864. 


for a long time, it was hoped, since portions of the 
South were being reopened to trade by the advance of 
the Union armies, that cotton would be at hand for ship- 
ment to Europe, but Uttle offered and exchange was 
very inconsiderably affected by a revival of this com- 
merce. As one device after another was tried and came 
to naught there settled upon the country a conviction 
which Fahnestock expressed when he said: "I don't 
l^lieve anything the Secretary can sell will break gold. 
Grant must do that/* 

As already indicated the New York money jobbers 
were greatly assisted in their machinations by the un- 
happy turn again taken by military affairs, culminating 
in the march upon Washington and the burning of 
Chambersburg, Pa., and also in high degree by the 
resignation of Secretary Chase with the uncertainties 
of a new administration of the government's finances. 
It was feared that Lincoln could not be re-elected in 
November and political observers so shrewd as Thur- 
low Weed were predicting Republican defeat, in the 
approaching Presidential contest. It was a time of 
general gloom and foreboding. On July 4, 1864, 
Fahnestock wrote (Henry Cooke being still absent in 
Europe) : 

No Gettysburg or Vicksburg victories or prospects to make this 
a " Glorious Fourth." But there is plenty of sunshine, and lem- 
onade, and Chinese crackers about toxNii and all the contrabands 
are riding in hacks up and down the avenue and singing " Hail 
Columbia " in the President's grounds, having a jolly time gen- 

On July loth he wrote: 

We are in the midst of our regular midsummer scare, which 


always occurs on Sunday. . . . It is by no means impossible 
that the force which yesterday was in front of Fredericksburg 
may be in front of Washington, or between Baltimore and Wash- 
ington to-morrow. I am led to believe it is as strong as 30,000 
men. How they could have come north unknown to the War 
Department is a mystery. Lest the wires should be cut I have 
telegraphed you not to be uneasy. ... I have no appre- 
hension as to the fate of the city as, other considerations aside, 
one or more of Grant's corps are now en route for this point. 

The next day Jay Cooke was advised from his Wash- 
ington house : 

Nothing to do to-day but sit and serenely smoke in our shirt 
sleeves. Tlie rebs are skirmishing on the 7th Street and Ten- 
allytown roads four to six miles from the city, and just outside 
our fortifications. We have, I am satisfied, abundant force to 
take care of them. Our folks talk about " bagging " them but 
we have heard too much of that before without results. What 
I most feared, being easy about the city, was that Grant would 
be depleted to an extent sufficient to impair his usefulness; but 
Ramsey (Senator from Minnesota) and an old personal friend 
who has been down with Sprague to visit him returned Sunday 
and reports Grant in excellent spirits, and says he will inevitably 
take Richmond and Petersburg ; that he would do it more speedily 
but that his present plan involves the least expenditure of life 
and is the best. He has known of this diversion and estimates 
its strength at 12,000 to 20,000; says the more men Lee sends 
and the further north they go the better he will like it. . . . 
Don't be uneasy about us, for if the worst comes we shall send 
a fishing party around via the Atlantic route. 

On July 14th Fahnestock wrote to Jay Cooke and 
William G. Moorhead, continuing his report of the 
siege : 

After tbree days of perfect isolation our communications with 
the world have been opened this morning. Up to this hour, 1.30, 
we have received only your first despatch in answer to mine and 


one from New York, dated yesterday. I have written you daily, 
I believe, by various routes, as also to New York, and the letters 
will turn up by mail and express some time or other. Yester- 
day's batch went, I reckon, via New York [that is by steamer 
down the Potomac]. I wrote you a long war letter yesterday 
which probably went by first train this a. m. and will reach you 
to-day giving you some idea of our queer surroundings during the 
blockade. The rebs have nuzzled and for want of cavalry on 
our part will probably get home safely. The government ought 
to have embraced the opportunity to string up some leading 
secessionists here. They have known for a fortnight what was 
coming, and parties went to country places near the city a day or 
two in advance to meet their Southern friends whom tliey knew 
were to be there. I suppose you were more troubled about the 
military status than we were. 

Although the besiegers had departed, assurance did 
not completely return. On July 26th Fahnestock wrote 
Mr. Cooke: 

Secesh people here all say that Lee will be here again before 
long. Don't believe the Congressional stories of Grant's satis- 
factory progress. He must have a hundred thousand more men 
before he can take Richmond. So says Martindale privately 
who has for some time commanded the i8th Corps (Baldy 
Smith's) and spent Sunday evening with me. He is worried 
about it and of course says nothing of the kind publicly. He is 
an out and out Republican — goes the whole nigger and is not 
given to a dolorous view of things. 

Mr. and Mrs. Henry Cooke had left their children at 
home in Georgetown and there were several sugfj^estions 
that for safety they should be sent to Philadelphia, but 
after the burning of Chambersburg the Confederate ex- 
pedition returned whence it had come and the North 
breathed more freely again. On July 31st Mr. Messer- 
smith wrote from his ruined Chambersburg to Jay 


It is with great sorrow I inform you that our beautiful town 
IS a ruin. . . . Personally I have lost everything and my- 
self and family barely escaped with our lives with nothing but 
the clothing we had on. The wretches did not give us five 
minutes' notice, but fired the entire circle of buildings in the 
diamond simultaneously. I know not A\'hat to do. I am ap- 
palled with the distress and ruin around me. My little family 
is scattered, the remaining part of the town is crowded to excess 
and what to do for the future I know not. Praying God that 
such sorrows and trials may never visit you and yours, I am 
your distressed but faithful friend. 

Unwonted gloom enshrouded even the hopeful spirit 
of Mr. Cooke, for he wrote his brother Henry to a 
European address on August 2nd: 

You will hear the news of our sad reverses before Petersburg ; 
also of the raid into Pennsylvania and the burning of Chambers- 
burg. Grant has lost prestige and people begin to doubt even 
his success. Sherman before Atlanta we have our fears about, 
not from any knowledge of any particular danger just now but 
on general principles. He is far from his base and in an enemy's 
country. We fear for his communications. The presence of the 
enemy in the Shenandoah valley and all along the Potomac is 
disheartening. The rebs are gathering a harvest sufficient to 
feed the army at Richmond a year and our forces under Sigel, 
Hunter, Crook, etc., are entirely inefficient — get whipped and 
driven across the Potomac as fast as they show themselves, whilst 
Pennsylvania and Maryland are entirely unprotected and we here 
in Philadelphia really think seriously of sending our valuables 
into some " vast wilderness " — not a fortification, breastwork or 
rifle pit, nor a regiment or battery between this city and the 
40,000 rebs of Shenandoah valley. 1,500 or 2,000 of the gay 
riders could pounce on and destroy the city. This is exactly the 
state of the case and yet we are cheerful, happy and eat and 
sleep as usual. . . . W. G. is bluer than indigo and a regular 
Copperhead. He has done great damage to the standing of the 
house as Republican folks by his wholesale and public and in- 


discreet talk. His visit to Gov. Chase some time ag^o filled him 
with the Gov.'s blues and he hasn't got over it. I shall send 
W. G. to Europe in a few weeks. I still have faith that we 
will do this job up, but God is really punishing us severely and 
no daylight yet 

Mr. Chase's "blues" came principally from the fact 
that he was not managing the war instead of Mr. Lin- 
coln. His resignation was offered suddenly. This was 
the fourth time it had been written * and the President 
was now ready to accept it. In May General Francis P. 
Blair, Jr., who, with his father, had become a strong 
force in politics, made an attack upon Chase in the 
House of Representatives. He had been in command 
of the Western army and Lincoln had promised that he 
might return to his military office at the expiration of 
his term in Congress. The President made this ap- 
pointment almost immediately following Frank Blair's 
anti-Chase outburst, thereby seeming to endorse it. On 
May 4, 1864, Cooke wrote his friend, the Secretary of 
the Treasury: 

Last evening I read for the first time Blair's doings (reported 
in the Globe). What an outrageous rascal he is! I don't 
wonder that somebody was a little wrathy that aftenioon going 
over to Baltimore. What can I do ? Shall I challenge him ? I 
think that Lincoln is in a scrape and that unless he makes a 
regular nomination and the Senate confinns Blair — that military 
person will have to retire to private life. If I were you I would 
demand of Lincoln an open reprimand of Blair, and a disavowal 
of all sympathy with such base charges. 

The next day Chase replied: 

My dear Mr, Cooke: 

I hope my wrathiness was not excessive. Indeed it was vexa- 

1 Field's Memories, 


tion in thinking that all my labors to serve our country had 
found recompense so far as Mr. Lincoln's special friends were 
concerned, and with his apparent — but as I hope and believe 
merely apparent — endorsement only in outrageous calumny. I 
seldom consult personal considerations in my public conduct, and 
so suppressed my inclination to resign my office and denounce 
the conspiracy of which the Blairs are the most visible embodi- 
ment. After returning from Baltimore I conferred with Gov. 
Brough and other friends who were earnest in advising against 
resignation, and I yielded to their judgment which indeed coin- 
cided with my own, though exceedingly contrary with my im- 
pulses. Immediately afterwards I was obliged to visit Phila- 
delphia, and was absent from Wednesday morning until Satur- 
day night On Monday I learned that the Ohio delegation had 
taken the matter up and that one of them had called on the 
President, who disavowed in the most explicit terms all connec- 
tion with, or responsibility for Blair *s assault, and expressed his 
decided disapproval of it. As this was merely verbal, however, 
the delegation determined to call on the President in a body and 
make and obtain a distinct statement in writing — on their part 
of their advice, my action and their conviction of what was due 
from the President to me, to Ohio and to the country, and on his 
part such reply as he should see fit to give. 

There the matter now stands. It seems now only simple justice 
to me that every friend who believes I have done my duty should 
by voice, pen and press utter sentiments which this outrageous 
attack must kindle in honest minds of indignation against the 
unworthy men who have set on foot and propagated these vile 

Yours faithfully, 

S. P. Chase. 

This wound was still rankling when in June Mr. 
Chase suflfered a fresh injury and he departed his of- 
fice. The immediate cause of his resignation this time 
was a dispute with Mr. Lincoln as to the choice of a man 
to fill the place soon to be vacated by John J. Cisco, 



the Assistant Treasurer in New York. Mr. Cisco was 
a Democrat who had held his office since 1853. ^^ had 
resigned at the beginning of the Chase administration, 
but strong influences kept him at his important post and 
many circimistances combined to make him a useful of- 
ficer, in spite of his desire to be regarded as a greater 
man than the government required in the position which 
he occupied. He now asked to be relieved of his duties 
at the end of the fiscal year, 1864, and Mr. Chase in 
his characteristic way sought to fill the place without 
taking too much account of President Lincoln's wishes 
in the case. 

The Secretary's choice was finally narrowed down to 
Maunsell F. Field, who had been in the New York Sub- 
Treasury and had become an assistant in the Treasury 
Department at Washington. He was of Democratic 
leanings and there were strong objections to the appoint- 
ment by a New York senator. Mr. Lincoln on this ac- 
count, and for the reason that Chase was too often and 
too much disposed to take the appointing power into his 
own hands, refused to make the nomination.^ To avoid 
a dilemma the Secretary of the Treasury persuaded 
Cisco to remain in office another quarter, but just as the 
matter seemed likely of adjustment Mr. Chase resigned 
and — much to his surprise — no steps were taken to in- 
duce him to reconsider his action. The event was 
natural in view of his open eflforts during the half 
dozen preceding months to replace Mr. Lincoln in 
the White House, and with a man of less philosophy and 
forgiveness than the President, official, if not indeed 

* For Mr. Field's own account of this personal impasse, see his Mem- 


friendly personal relations, would have ceased much 

As early as May i8, 1864, Fahnestock wrote to 

The Governor does not seem to be posted upon war matters 
and I only wonder that he can stay in the cabinet at all under 
the circumstances. Abraham does not seem to consult him upon 
any but financial matters. 

And on June 26th, Chase himself wrote to the banker : 

Accept my warmest thanks for your disinterested and patriotic 
zeal and services. You notice, I dare say, the malignant false- 
hoods which arc constantly printed against you and me because 
of my employment of your energy and skill in the negotiation of 
the 5-20 loan. Like falsehoods are circulated about the 75 
million loan [new 8is]. . . . They say that my rate for ac- 
ceptance [of bids] was fixed with reference to favored parties 
who had the means of knowing what it would be. How mean 
this falsehood is. . . . Not a soul had an intimation what 
rate would be adopted and could not for I did not know myself. 
But why speak of these things. Calumny has a thousand tongues 
and is as immortal as fire — dying and reviving continually. 

The resignation came on June 29th and was immedi- 
ately reported to Mr. Cooke, who at once wrote as fol- 

My dear Governor: 

For our dear country's sake I am deeply pained to hear of 
your resignation. How was it possible for you to leave the helm 
of finance in the midst of this great storm ? The reasons must be 
mighty and all-powerful, and knowing your patriotic and self-sac- 
rificing spirit I have entire confidence that these reasons will 
satisfy your friends fully — if not your enemies. God keep us. 
And may his everlasting wings shelter our poor nation from ruin. 
I know and have long been painfully sensible of your unpleasant 
position, and the longing you have had to escape from it and that 


you have only remained from pure exalted motives of duty. 
As ever, 

Your sincere friend, 

Jay Cooke. 

A record of the event as it was viewed by Mr. Chase's 
friends is found in two letters from H. C. Fahnestock 
dated June 30, 1864. In the first he says: 

The Governor's resignation was sent in yesterday and accepted 
to-day after I saw hini. It is understood that Tod of Ohio has 
been nominated by the President, that the Senate in executive 
session to-day did not confirm the appointment, and that a 
desperate effort is making to prevent his confirmation and in- 
duce tlie President to recede from his position. The Secretary 
caimot of course, if he would, withdraw an accepted resignation 
and the President is not likely to back water. The immediate 
occasion (but only the culmination of a long brewing incompati- 
bility) is understood to have been the President's declining to 
appoint Field on the ground of the objections of Governor 
Morgan, who disliked Field not personally but as a former Demo- 
crat, and proposed in his place several others (privately one man 
of 70 years, one of 60 and one who lived in the country) who 
were not regarded as properly fitted for the place. The worst 
of it is that Tod who is to succeed, as it now looks, is a man 
of no financial experience and is said to be a Blair-ish Re- 

Later the same day Fahnestock wrote : 

I have just telcgraplied you that I have seen the Secretary and 
he states the occasion of his resignation to have been a difference 
with the President in regard to the appointments of his sub- 
ordinates, especially the New York Sub-Treasurer, a position 
the responsibility and confidential character of which cannot be 
overestimated. Of course we understand that this is only the 
culmination of a trouble that has long existed, the galling at- 
tacks of the Blair faction and the insult with which the Presi- 
dent followed them up. It does not look like a revocable case. 


It is gratifying to see that the market has survived the shock. It 
is unquestionably unwise in the Secretary to leave at this juncture, 
and without conference with any of his assistants, all of whom 
were in utter ignorance until the acceptance came in and Har- 
rington was appointed ad interim. McCuUoch, even, who came 
to Mr. Chase's assistance at great personal sacrifice knew not a 
word about it. Nor did Sherman, who was at my house last night, 
•nor Hooper. Tod, I guess, is totally green in financiering, but 
we will be duly polite and throw up our cap for whoever comes 
with all due regret for Mr. Chase's step. 

On July 1st, Chase himself found time to write an 
account of the event as follows: 

My dear Mr. Cooke: 

When I found that upon the question of Mr. Cisco's successor 
I was not to be left free from all other considerations, except 
simple fidelity to the general cause and fitness for the place, but 
was expected to take into consideration questions of local poli- 
tics, I felt myself constrained to make it a turning point. I had 
been so much embarrassed and injured by the standing of one 
of the members of the cabinet that I could not feel at all safe 
unless that office was in hands on which I could personally de- 
pend. The President differed with me and I tendered my resig- 
nation, and he thought it best to accept it. I could not remain 
and feel that my Department was really under my own control 
or that I had any real ability to serve the country in it. The 
President did not see the matter as I did. 

It was very painful to me to resign especially at a moment of 
peril, but at moments of peril the pilot must have command of 
the ship, whether the best pilot that can be found or not. If the 
• captain won't let him have charge the pilot cannot be expected 
to be willing to do the piloting. I don't know that I could do 
the piloting and have nothing to complain of, if, when I tendered 
my resignation, it was accepted. 

After all I did not know but it would later if not then. It 
was very doubtful whether Congress would give the additional 
taxes necessary to a firm basis of credit, and I am tired of ex- 


pedients. I want something solid. Congress you know did refuse 
the tax on state banks necessary to compel them to assume the 
burden of contracting circulation, and so put that burden wholly 
on the Treasur}'. Congress refused also to give the Treasury the 
benefit of the whole tax on national banks as a basis for loans. 
I felt therefore that if Congress should refuse also taxes suf- 
ficient to produce at least half the expenditure of the next fiscal 
year, that I could hardly remain anyhow. 

These considerations made me more than willing to resign. 
After all I should have held on as long as I could hope to be 
useful had not I feared that my insisting on what I thought the 
true and only safe principle relating to the appointment of 
Assistant Treasurers made my position disagreeable to the Presi- 
dent, and that I must hold my office, if I retained it, either by sur- 
rendering a point which I thought vital or against his inclina- 
tions. I therefore tendered my resignation and feel its acceptance 
as a real relief. 

I am still ready to do all I can for our country and hope 
some pilot will be found able, and willing, and permitted to 
command the ship. God will yet bring us through. 

Your friend, 

S. P. Chase. 

David Tod, named by the President for Chase's place, 
had been governor of Ohio and was a "War Democrat" 
of that class which Mr. Lincoln in his insistence that 
the war was a political as well as a military problem was 
so glad to invite into the temple to share the honors and 
responsibilities of guiding the country on its troubled 
course. It seemed not to matter to the President that 
"Dave" Tod, as he familiarly called him, was not a man 
of financial experience, nor did he seem fully to realize 
that Mr. Chase had left his office in a time of great pe- 
cuniary straits, when tact and skill were needed as never 
before. Tod relieved the situation by declining the ap- 
pointment and Mr. Lincoln created satisfaction, gen- 


erally felt and widely expressed, by sending in the name 
of William Pitt Fessenden of Maine, Chairman of the 
Senate Finance Committee, for the vacant portfolio. 
Mr. Fessenden was totally surprised by this appoint- 
ment ^ and had come to the White House to recommend 
McCuUoch* for the post only to be informed by the 
President that a messenger had just taken his own name 
to the Senate. He did not immediately agree to serve 
and the Cooke interests were anxious, if he did not, that 
the office should be tendered to John Sherman. As the 
latter might not accept if he were nominated, having to 
surrender three years in the Senate, which were a cer- 
tainty, for "a stormy nine months" in the cabinet, 
counting the chance that Lincoln would not be re-elected, 
Jay Cooke was urged to come on to counsel the young 
Ohio statesman. But Fessenden agreed to take the of- 
fice temporarily, if under some protest, until better ar- 
rangements could be made and the outlook grew more 
clear. He had been a respected and leading mind in the 
Senate, his advice being especially valued on financial 
subjects, ever since he had entered it in 1854. He was 
a spare, not very happy man, whose face bore the lines 
of suflfering, graven there by an obstinate case, of dys- 
pepsia. He, however, had a larger store of geniality 
than his predecessor and Fahnestock early took occa- 
sion to tell Jay Cooke that he thought him a pleasanter 
man to talk to and deal with ; he was "always afraid of 

Thus ended the administration of the Treasury of 
the United States by Salmon P. Chase, while Grant was 

* Field's Memories. 

* Nicolay and Hay, Vol. IX, p. 99. 


making of Virginia a bloody shambles and causing a 
revulsion of feeling in the North because of the war's 
brutalities; while Lincoln's re-election was in grave 
doubt and the Copperheads clamored for compromise 
and peace; while the country staggered under a heavy 
load of paper money and its credit was deeply disturbed. 
His abandonment of the state at such a crisis does not 
make of him a more imposing hero and now that his 
day has passed and he is a figure in American history 
the impression deepens that he sacrificed something of 
his fame to satisfy pride and ambitions which become 
petty and personal when weighed in the balance of the 



Mr. Fessenden assumed the duties of the Treasury 
office on July 5th, at once attending a cabinet meeting, 
where he shook hands with his colleagues, early to give 
his attention to the great and difficult tasks which con- 
fronted him. Mr. Chase, whose last care had been a 
bill to tax the circulation of the state banks and get 
these agencies of confusion and disorder out of exist- 
ence,^ freely and cordially offered his aid to the new 
Secretary, who on July 9th went to New York to con- 
fer with the leaders of the banking community in that 
city. The times were truly unpropitious, and in va- 
rious ways. When Mr. Chase left his office at the end 
of the fiscal year 1864 the public debt had been in- 
creased to $1,740,690,489, and three-quarters of a billion 
dollars of it was in greenbacks, legal tender Treasury 
notes and certificates of indebtedness, all of which more 
or less freely passed from hand to hand as currency and 
disturbed values in a vital manner. Delayed accounts 
and requisitions which reached a total of $71,814,000 
on July 5 th * called for large sums of money immediate- 
ly; the cash balance in the Treasury was below $19,- 
000,000 and but few promising sources of income were 
visible. There was of course a considerable balance on 

* Letter of Fahnestock to Jay Cooke, June i, 1864. 
> Fessenden's Report for December, 1864. 



the ten-forty loan account, which it will be remembered 
was not finally closed until January 7, 1865. There 
were some thirty millions of the new 81 s yet to be issued 
and Congress by the law of June 30, 1864, approved 
just as Chase was leaving office had authorized a loan 
of $400,000,000, one-half in long bonds and the other 
half in 7 3- 10 per cent. Treasury notes, thus opening 
the way to a policy suggestive of that which had pro- 
duced considerable sums of money in the first months 
of the war. 

The $200,000,000 of Treasury notes might be of any 
denomination not less than ten dollars. They were re- 
deemable at any time not exceeding three years from 
date and bore interest not above the rate of seven 
and three-tenths per centum, payable in lawful money at 
maturity, or at the discretion of the Secretary semi-an- 
nually. If payable at maturity they were made a legal 
tender, but practically none were issued in this way, so 
that they did not in any material manner unsettle val- 
ues. They could be given to government creditors in 
discharge of public debts and might be converted under 
certain conditions into United States bonds. 

The $200,000,000 of bonds which the Secretary was 
authorized to issue under this law could be paid after 
five years and must be paid at the expiration of forty 
years. They were to bear interest not exceeding six 
per cent, in coin. 

This was Mr. Fessenden's outlook and he faced the 
situation with courage. On his first visit to New York 
he received through Mr. Cisco propositions from a 
group of German bankers in that city for fifty millions 
of the new 7 3-10 currency notes, the amount to be 



turned into a fund for the Treasury to draw upon as it 
was wanted. Mr. Fessenden's situation on July nth, 
and his prospective needs up to September i, 1864, were 
as follows : * 

Suspended Requisitions $ 88,000,000 

Estimated Expenses, 51 days 102,000,000 


Interest bearing notes withdrawn for 
which a corresponding amount can be 
re-issued $ 70,000,000 

Estimated Internal Revenue Receipts for 
the period 33,000,000 

Proposed 7 3-10 negotiation 50,000,000 

To be provided 37,000,000 


On September i st $50,000,000 more would be due the 
soldiers, a sum to be provided and re-provided every 
sixty days, the various armies comprising at this time 
1,200,000 men.* Many invitations to come to Washing- 
ton were sent to Jay Cooke, and the heads of his Wash- 
ington house were very anxious to lure him thither. 
Already on July 4th there was "every assurance that 
Fessenden feels very kindly toward us," Fahnestock 
wrote to Jay Cooke. "He has more than once expressed 

1 Letter of Fahnestock to J. C, July 11, 1864. 
* Fahnestock to J. C, August 10, 1864. 


regret that the five-twenty policy under your manage- 
ment was terminated." On July 19th Mr. Fahnestock 
telegraphed asking Mr. Cooke to come at once to see the 
Secretary, who was "worried" by the "importunities" of 
the "Dutchmen" in New York. "He told me distinctly," 
said Mr. Cooke's Washington adviser, "that he was not 
ready to negotiate with them and is convinced that they 
are not ready or authorized to make any definite con- 
tract with him." Thus the $50,000,000 negotiation 
failed "notwithstanding a professed and as the Secre- 
tary was convinced a real desire to aid the government," 
to use the euphemistic language of his first annual re- 
port. They "were not able to furnish the assistance re- 
quired upon terms which under existing provisions of 
law the Secretary felt authorized to accept." * Mr. 
Fessenden "cordially expressed a desire," Fahnestock 
wrote the banker, "to confer with you upon the present 
situation and his future programme. I am sure that it 
will be well for you to come down now and that you have 
an opportunity to impress the new Secretary with your 
ability to do whatever you undertake. Moreover I do 
wish that the thing would take a 'J- C. Subscription 
Agent' turn now in vindication of the past. The idea 
has been strongly pressed upon Fessenden." 

Mr. Cooke was not disposed to make any overtures to 
Mr. Fessenden, his position being one of peculiar deli- 
cacy because of the prevalent notion that the Treasury 
Department and the houses of Jay Cooke and Company 
under the Chase administration had too closely co-op- 
erated. When he was practically sent for he went on 
July 2 1 St to call upon the Secretary, who read him a 

1 Report of December, 1864, p. 20. 


manifesto which he had written appealing to the patriot- 
ism of the people in the great emergency. 

They had a full and free discussion of the issues con- 
fronting the Treasury and the Secretary asked Mr. 
Cooke to put his recommendations into writing. The 
financier did so at once in the following characteristic 
terms : ^ 

As requested by you I proceed to place on paper the views I 
expressed this morning. 

First. Arrange a system that will insure a more prompt de- 
livery of bonds to subscribers of loans. 

Second. If an appeal to the people is resorted to through 
national banks and sub-treasuries for subscriptions to the 7 3-10 
three year currency interest notes make liberal arrangements 
for travelling agents, advertising, editorials, etc., etc., and offer 
a commission large enough to induce active exertions to place 
the loan, somewhat in the manner adopted in disposing of the 
5-20 loan. I think the allowance spoken of, viz. yi to ^ per 
cent would accomplish this work in full. 

Third. In order to improve the market price of all our various 
securities the certificates of indebtedness now selling at 93 to 94 
must be brought nearer par. To do this effectually you will find 
It necessary to decrease the amount issued for the present at least, 
and also to purchase any surplus of certificates that may be 
floating on the market. I would suggest that uniform payments 
be made to contractors, both of army and navy, in checks for 
certificates and that these checks be paid in, say, 20 per cent, 
cash, 40 per cent, in one year certificates of indebtedness and 40 
per cent in the new 7 3-10 notes, and that both these securities 
be brought up and kept nearly to par by constant purchases in 
the open market which would not require the whole amount of 
cash saved to the Treasury above. 

Fourth. Give confidence to contractors and those who loan 
them money, or purchase their vouchers by assuring them of the 
permanency of the mode of payment, and certainty of the time 

^ Dated Washington, July 21, 1864. 


of payment, which should not •xceed sixty days and any change 
in the above should not apply to contracts already made. 

Fifth. Dispose at once of the $33,000,000 1881 loan to banks 
and bankers through national banks. [Here follows a full de- 
scription of the methods which the Secretary should pursue to ac- 
complish this result.] 

Sixth. As a temporary measure pay off the army, etc., in 
compound legal tenders to be withdrawn as soon as the Treasury 
is able to reduce the volume of circulation. 

These and other suggestions I make fully confident that credit 
would be restored and a firm basis reared for future loans from 
the people. In conclusion, if you will pardon me, I would sug- 
gest that God's favor be invoked upon our efforts to maintain the 
financial credit of our nation by a strict observance of His Holy 
Day and that hereafter the awful scandal of Christian people 
working all day on the Sabbath in the Treasury Department be 
done away with entirely. If I can ever be of service to you I 
shall be ready to come to you at a moment's notice. 

Fessenden seemed to be "properly impressed" by Mr. 
Cooke's recommendations, Fahnestock wrote him after 
his return to Philadelphia. Thereafter he spoke of 
"Jay" in a familiar way and on the 25th of July issued 
general proposals for the 7 3-10 per cent. loan. Upon 
Mr. Cooke's advice he sent for the New York advertis- 
ing agent, Shattuck, who was to place the Secretary's 
appeal to the people in the newspapers of the country, 
after visiting the financier in Philadelphia for final in- 
structions in regard to a matter upon which no one, it 
was generally recognized, had such intimate knowledge. 

Fahnestock feared that the new Secretary had not 
"nerve enough"; and "knew" he was "not financier 
enough for the emergency" and this impression was con- 
firmed in his mind by later developments. On July 26th 
he wrote: "I am sure the 7 3-10 programme, as it is 


now issued, will inevitably fizzle and I have no heart in 
it When a plan is feasible, as was the five-twenty, 
when there is a manifest inducement to subscribe you 
can go in with a splurge and advertise and exert your- 
self in every direction. But when you try to sell cur- 
rency 7 3-1OS at par, with certificates at 95, and have 
a little beggarly % of one per cent, to divide upon, it 
is absurd and cannot be made to go." 

This in truth was the commission at first offered for 
the negotiation and it promised very ill on this basis. 
Jay Cooke and Company had made the first subscription 
to this new 7-30 loan ^ and they advertised it as widely 
as the conditions would allow. The operation was not 
tempting, as Mr. Cooke was told by his Washington 
men, because when notes were ordered the account was 
at once subject to Spinner's draft, i. e., the draft of the 
Treasurer of the United States, and the government re- 
served to itself the right to deliver at its own conven- 
ience which it was estimated would be two months 
hence at least! "It is awful to have such tardiness in 
the head of a Department upon which so much de- 
pends,'' Fahnestock wrote.^ 

Moreover the demand was not active and chiefly be- 
cause of the price of certificates of indebtedness which 
Mr. Cooke had tried to persuade Mr. Fessenden to ad- 
vance. He had not profited by this or indeed any other 
important recommendation and was looking to New 
York for the aid which he so sorely needed. On this 
account his administration was still unsatisfactory to 
Fahnestock, who wrote on August 2nd that the Secre- 

1 Fahnestock to J. C, July 26, 1864. 
3 August 8» 1864. 


tary did not ^'display any nerve at all and would not get 
along with his finances unless he determined to take the 
responsibility of doing whatever was needful, and then 
would take good advice as to what that shall be/' 

On August 3d Mr. Cooke wrote to Chase, now free of 
official responsibilities : 

My Dear Governor : — Although Cisco and those New Yorkers 
have told Fessenden that they don't consider me a financier, 
but only a good advertiser of patent medicines, yet I say it boldly 
I could take the financial branch of the Treasury and in two 
months (if I had my own way) put gold to 150 and advance 
1881S to 120, 5-20S to 115 and get all the money the Treasury 
needed on 10-40 five per cents at par. ... It grieves me 
deeply when I know what can be done and see our country being 
ruined by its not being done. 

Most truly yours. 

Jay Cooke. 

On August 15th in replying to this letter from Litch- 
field, Conn., Chase wrote: 

I knew you would do all you could to aid Mr. Fessenden. 
He is worthy and should have all the support we can give him. 
I feel especially bound to give it, as he says it was mainly on 
my advice that he determined to accept office. . . . 

I doubt if I should have advised Mr. Fessenden to accept 
had I not believed that those banks and bank officers who had 
xrhosen to take hostile positions towards me would probably and 
almost certainly take the opportunity of giving such aid to him 
as would make his success more conspicuous than mine. But 
they have given him only fair words. They offered a little more, 
and not much either, if he would violate the law and every 
principle of sound policy and make them depositories and use 
their credit as money. This he would no more do than I, and they 
are now practically as hostile to him as they were to me while 
he has disadvantages in regard to their hostility which I had 
not. So that he is now really in a harder place than I should 


have been which certainly had I foreseen would not have allowed 
me to urge his acceptance. 

"Fessenden does not seem to rise to the necessities of 
the case," Fahnestock wrote on August 29, 1864, "and 
does not in my judgment avail himself of your advice 
and that of other experienced persons in adopting 
measures necessary to secure the success of the present 
loan. The longer he runs upon his present basis the 
deeper he will sink in the accumulation of suspended 
requisitions. He must go to work in earnest. Does 
it not seem absurd to put at the head of the Treasury, 
an establishment spending 23^ millions per day, a man 
of no actual business experience, at least on any consid- 
erable scale? I wish you had the running of the ma- 
chine for about three months just to show the world 
what could be done in that time in placing our finances 
upon an enduring basis." Mr. Cooke reminded Fahne- 
stock that they must always wish the Treasury to adopt 
th« policies which were the cheapest as well as the most 
successful for the government, but he as well as the 
young men about him had little favor for a programme 
they thought to promise neither economy nor success. 

In August Fessenden repaired to Maine to close some 
private affairs which required his attention. He had 
not been home since the preceding winter and he had ac- 
cepted his office so unexpectedly that this absence now 
was necessary. When Huntington went to see Lincoln 
on some business for Cooke on August 17th the Presi- 
dent inquired for Mr. Fessenden, asking when he was 
expected to return, as though he still regarded a close 
connection between the Treasury and the Cooke houses 
as indispensable. Mr. Lincoln several times asked that 



Mr. Cooke should visit him. On August 12, 1864, 
Huntington wrote to the financier: 

I have heard nothing from you in reply to the President's 
invitation to you to see him. What do you think of it? I saw 
him again yesterday and he again assured me he would be very 
glad to see you. 

In explanation of his course in declining these invi- 
tations Mr. Cooke wrote to Chase :^ 

The President has several times, as Huntington and Fahny 
will tell you, requested that I should go over to sec him. This 
was during Mr. Fessenden's absence and I did not go because 
I felt, if I did, I should be interfering with Mr. Fessenden, and 
until I saw whether he intended to adopt the views I had ex- 
pressed to him I thought it indelicate to urge them on the 

Mr. Cooke and his men were glad to note Lincoln's 
confident attitude toward them. To Chase as well as 
to them, as might have been expected, Fessenden was 
not the hero which he may have seemed to other per- 
sons. The "Governor" wrote to Jay Cooke on Septem- 
ber 8, 1864, as follows: 

I do not think, perhaps I may be overvain, that Mr. Fessenden 
quite draws my bow, but I had a large experience in administra- 
tion as well as legislation and felt always that I could trust my- 
self. I have taken pleasure in giving Mr. F. all the aid I could, 
for I believe in him and have a real friendship for him. Be- 
sides however much cause I may think I have to dislike certain 
acts of Mr. Lincoln I cannot but feel that my duty to sustain 
the government remains unaffected by any matters of a personal 
character. Mr. F — would have done well I think to return to 
the agency system, as best and cheapest. I have both written and 
spoken to him very decidedly on this subject. I presume he 

^ Sept. 20, 1864. 


don't like to incur the reproaches which were poured on me: 
nor do I like them and if I could have found a better mode for 
the country I should have been glad to do so. I tried all modes 
arid the single responsible general agency plan was the best. 
I hoped to find Department supervision with national bank agen- 
cies as good but it was not, and I had made up my mind to re- 
turn to the plan which had proved so successful with the S-20s. 
Mr. F. would also I believe, if he were willing to encounter the 
misrepresentations of malevolence. I hardly blame him for not 
being willing. What did I get, what can anybody get for pre- 
ferring country and duty to private interests and compliant 

On August 8th the total sales of 7 3-10 notes cover- 
ing ten days v^ere $9,853,750, some large subscriptions 
being made by the old banks in New York City and by 
houses v^ishing a stock upon which to begin sales and 
deliveries. On August 17th the returns were $2,200,- 
000 and the total sales to date about $i7,ooo,cxx).* 

Meantime it may be observed how completely Mr. 
Cooke made himself the master in his own household. 
He detected in Mr. Fahnestock, so he thought, the evi- 
dences of Copperheadism and reviewed his political opin- 
ions very thoroughly. This chastisement was delivered 
on the strength of some of the young man's expressed 
judgments regarding Lincoln's policy on the negro ques- 
tion. The presidential campaign was at its height and 
Jay Cooke feared that his Washington partner might 
be a "peace at any price" man, ready to vote for Mc- 
Clellan. This he did not propose to submit to, if he 
could help it, and the matter became the text for an im- 
pressive epistolary lecture. Fahnestock was compelled 
to defend himself, which he did on August 19th in good 

1 Fahncstock's letter to J. C, August 17, 1864. 


round terms. After positively declaring that he was 
not a "peace at any price" man, and that he would not 
vote for McClellan, he continued : 

I hate slavery and regard its baneful influence upon Southern 
society as the root of all our troubles, yet it must be remembered 
that it is as old as the nation, and extends through every portion 
of every Southern state and underlies the whole industrial system 
and the social life of every community. ... I hate slavery. 
It is intrinsically wrong and disgraceful to the nation, yet in 
demolishing it we must be careful not to inflict a greater in- 
justice upon its victims. Have you seen any extensive disposi- 
tion in the northern states to invite negro settlement in the north ? 
Do you think that even Massachusetts would relish an im- 
portation of 10,000 of them? Will it not take a long time to so 
care for the poor creatures that habits of systematic industry 
and self support can be taught them, and, during all this transition 
state, must not all that are freed become a great burthen to their 
emancipators? Just now it is convenient to put them into our 
armies and make them do our fighting (and their own), but 
after a while they will have to be returned to civil life and it's 
going to be no small undertaking. If I am coppery Mr. Lincoln 
is. Dig up and read his letter to Horace Greeley in '62 when 
he said if he could save the Union with slavery he would do it, 
and if he could save the Union without slavery he would do it, 
and if he had to save it half and half he would do it. . . . 
Now, dear Jay, if the Union can be restored before we have en- 
tirely wiped out slavery let it be done for we can't afford to 
fight a day longer than we absolutely must and after the war we 
want to harmonize and be brothers again just as soon as pos- 
sible. . . . If we have to hold the rebs like Sepoys we shall 
never enjoy the blessings of the Union. Now do you think Fm 
a Copperhead or that there's anything but a difference of opinion 
between us? I don't. 

A little later Mr. Cooke accused Fahnestock of visit- 
ing Philadelphia in his absence to enjoy an unpatriotic 


half hour with William G. Moorhead. "You must 
think Fm an awful Copperhead," wrote Fahnestock in 
parrying this thrust. "I did not go to Philadelphia to 
have a peace conference with Wm. G. If I had I was 
in with Clary Clark enough to counteract the impres- 
sions. I don't take my views from the last man I talk 
with, always, and have just as high a respect for your 
views as you could wish. I went to Philadelphia to 
get out of the office and avoid being really sick, which 
I should have been in a day or two longer. I had a 
good visit, only deficient because of your absence, and 
have returned as straight as a string." 

Mr. Cooke also gave some attention to his partners' 
private business practices and treated Fahnestock and 
Huntington to a round scolding for speculating in coal 
oil. So early as in 1862 and 1863 it had been neces- 
sary for Jay Cooke to interfere with the voucher trade 
and a cotton operation in Tennessee. The traffic in cot- 
ton during the war was justified on grounds of public 
policy. The price had risen enormously and if the sta- 
ple could be got out of the South it was predicted that 
it would reduce the rates of foreign exchange, break 
the gold market, improve manufacturing conditions in 
New England and old England, cheapen cotton cloth, 
a necessary of life, and confer upon the public many 
large benefits. On the other hand the speculation led 
to contraband trade, a violation of the rules of the 
blockade and corrupted the morals of many civil and 
military officers of the United States. Jay Cooke late 
in 1862 had conditionally favored an operation on the 
Southern coast. In October of that year Henry Cooke 
had written to his brother: "A warm and intimate 


friend of mine, General Garfield, is to be assigned to 
a new department embracing southern South Carolina 
and Florida and he will cooperate with us in getting out 
cotton. Garfield is a glorious fellow and will do any- 
thing that is proper for us." But yellow fever broke 
out in that region and for this and other reasons the 
departure of the expedition was delayed. Thereupon 
the Washington house, without consulting Jay Cooke, 
turned its attention to some operations in vouchers and 
quartermasters' checks on the western military frontier. 
There were several men traflficking in supplies with their 
headquarters in Cincinnati and Louisville. A specu- 
lator named O'Hara was buying and shipping cotton, 
and F. W. Hurtt, who had followed Henry Cooke as 
the manager of the Ohio State Journal, was engaged in 
speculations which at length led to an investigation by 
General Burnside. 

Jay Cooke did not approve of this kind of business. 
He was unwilling to be a party to any play upon the ne- 
cessities of public creditors by buying government paper 
at a discount, while he believed that the purchase and 
sale of supplies, like the gold trade, shook men's loyalty 
to the nation. Although impelled to deplore reverses 
to the Union arms on patriotic grounds, defeats were 
invariably followed by advancing prices for produce, so 
that their sentiments became very unhappily mixed. 
Mr. Cooke therefore firmly and promptly ordered this 
business to stop, not without meeting the rather angry 
protests of those who had authorized it and were in the 
field actively engaged in it, prophesying its great profit- 
ableness. After this experience his houses were never 
again identified with such classes of trade. 


The oil affair which fell under Mr. Cooke's ban in the 
summer of 1864 became the subject of an animated cor- 
respondence. It seems that Mr. Moorhead had started 
an oil company called the "Story" company, in this time 
of general speculative craziness, and had entered Fahne- 
stock's and Huntington's names for 500 shares, each 
at $2.50 per share, for which they had respectively paid 
$1250. While in Philadelphia during the "peace con- 
ference" it was discovered by Fahnestock that the stock 
was worth $4.50 per share, at which price it was sold. 
At this time Moorhead spoke of another oil property 
called the "Rockwood," the stock of which was soon to 
be offered to the public at $7 a share. It was so good 
a property, in his belief, that he was investing the money 
of widows and children in it for a profitable turn, and 
it was offered to Fahnestock at $5 a share. The lat- 
ter took 1000 shares for himself for division with a 
friend, 500 for Huntington and 1000 for the "oldest 
and best clerks" in the Washington house, Swain, Pear- 
son, Colt and Garland, who with Jay Cooke's assent 
were to have had a hand in an earlier operation in bank 
stock, so that they might be more closely attached to 
the interests of the firm. The bank stock was not ob- 
tained and there was resort now to oil.^ Fahnestock, 
after his fashion, resented the criticism in vigorous 
terms. "A scolding from you," he wrote, "has more 
weight than from any other person." He thought there 
was nothing in the copartnership to make such action 
in any way improper. "For the life of me," he contin- 
ued, "I cannot see in this anything in the slightest de- 
gree wrong or anything requiring you to 'protest 

1 Fahnestock to J. C, Sept. 9, 1864, and H. D. C. to J. C, Sept 10, 1864. 


against these wild cat operations' and to assure me that 
'these things shall not be done any longer.' Nor any- 
thing to foreshadow in any way that we are to 'swamp 
and ruin you.' Now for goodness sake tell us just here 
and let us understand it whether we are to have any 
right of making any money beside our annual dividends 
in the bank and office, whether if we happen to have 
any money of our own we can use it in any way we 
think profitable," etc., etc. Fahnestock then gave Mr. 
Cooke a full account of his private affairs. He owned 
no stock except this, the Washington bank stock and 
14 shares in the Washington Railroad. He had "never 
lost any money," he said, and knew his obligations as 
a partner never to "speculate," i. e. to buy or sell that 
for which he could not pay.^ Huntington made a simi- 
lar but more apologetic answer to Mr. Cooke for his 
part in buying stock in the oil companies. In January, 
1865, Mr. Cooke still had this transaction in mind and 
thought of it continued to annoy him, whereupon 
Fahnestock asked him to sell the whole lot of 3000 
shares of "Rockwood," if he would like it better, and 
offered to send to Philadelphia a full statement of the 
firm's investments. 

A little later Mr. Cooke took his Washington part- 
ners to task for their supposed connection with an oil 
company which was being promoted by Simon Cameron. 
An agent of the concern came to the office and said that 
Cameron desired Henry Cooke or Fahnestock to serve 
as a director. They positively declined, although they 
were to be presented with one thousand shares of the 
stock free of cost for the use of their names. In spite 

^ Letter of Sept. 2, 1864. 


of this refusal the agent stopped again in a few days 
to say that General Cameron had assumed the responsi- 
bility of placing the name of Henry Cooke beside his 
own on the list of directors. It was soon published in 
the advertisements, and when the news reached the 
ears of Jay Cooke he at once called his men to account. 

"Not one out of twenty of the 'respectable' oil com- 
panies are really worth the paper they are printed on," 
said he. "If I am not to know what ventures my junior 
partners propose to make, what means they propose to 
withdraw from the firm or borrow outside (which is 
the same thing), or in other words what departures are 
proposed from the strict and legitimate course of busi- 
ness, why I wish to know it. It is my right as I un- 
derstand the ordinary nature of such a partnership as 
ours." He was not long in receiving a full explana- 
tion of the facts. The junior partners were resisting 
"the most pressing and tempting overtures daily and 
almost hourly from a thousand different sources," 
Henry Cooke wrote. General Cameron was to be told 
at their first meeting that the name must be taken out of 
the list of his directors, and thus ended this incident. 
Whether fully deserved or not, these verbal castigations 
probably conveyed good lessons to the minds of young 
men for whose acts Mr. Cooke was responsible at a 
time when the buying of shares in "wild cat" compa- 
nies was the bane of honest business life. 

Jay Cooke was displeased also with the state of af- 
fairs revealed in his Washington ofiice when his brother 
went abroad in the summer of 1864, though he reserved 
his criticisms for a more suitable season. Fahnestock 
thought Henry Cooke "an elegant fellow," but he was 


"liable to be misled by specious propositions from de- 
signing, unprincipled or speculative characters, in the 
latitude of Washington as thick as autumnal leaves 
(only all the year around)/' His political life had made 
"his acquaintance almost unlimited,'' Fahnestock con- 
tinued, "and many of the persons embraced were of 
course unworthy of confidence and always ready to take 
advantage of a generous nature and big heart like his." * 
Henry Cooke justified his political expenditures by his 
brother's "willingness and authorization to give almost 
any amount of money to promote Chase's success," * but 
upon his return his influence in the firm was for a time 
not so potent as it had formerly been. 

A large sum of money was needed, too, to discharge 
his old California debts. As he became widely known 
in financial circles the demands of the men with whom 
he had been unfortunately involved on the Pacific coast 
fifteen years before were insistent. They knew that he 
(or Jay Cooke) could pay them, so they made their 
claims as large as possible and pressed them stubbornly. 
About $90,CHX) were used in wiping out these old scores. 

To relieve the pressing necessities of the Department 
and clear himself of some of the accumulating requisi- 
tions Mr. Fessenden supplemented his 7-30 and the con- 
tinuing 10-40 sales, both proceeding very slowly, with 
an offer of another lot of the new 81 s, and Jay Cooke 
headed a combination to take about $25,000,000 at 
104.03, almost equal to the average price at which the 
sales were made by Chase. The bids reached a total 
of nearly $70,000,000, and as only $32,000,000 remained 

1 Letter of Sept 12, 1864. 
« Ibid, 


to be distributed, it was not necessary to honor any 
offers under 4 per cent.^ Fahnestock said that he would 
rather pay ten per cent, premium for a six per cent, bond 
than par for a five per cent, bond, a remark indicating 
the temper of the people as well as of bankers at this 
time and sufficiently well explaining the failure of the 
ten-forty operation. While it was thought by his 
brother Henry that this large bid at a premium higher 
than was offered by the New York houses would 
strengthen Jay Cooke with the new Secretary of the 
Treasury, the Philadelphia banker was still displeased 
with the Department's attitude in some important par- 

Henry Cooke had returned home full of his foreign 
loan plans. While abroad he had visited bankers in 
Paris, Frankfort and other European cities, making 
some trifling sales and wishing for the authority to 
effect larger ones. He now broached his ideas to Fes- 
senden, Harrington and "Governor'' Chase, who was in 
Washington for a few days in mid-September visiting 
his successor in office and making calls upon Stanton, 
Lincoln and his late colleagues in the administration. 
Henry Cooke wrote that the government must have "a 
certain and constant supply of money" and "that speed- 
ily or matters will come to a deadlock." The Secretary 
must have it "in much larger amounts and more rap- 
idly than it can be furnished from home capital and must 
look abroad."^ Mr. Fessenden, Henry Cooke contin- 
ued, "is very anxious to place a large amount of bonds 
in Europe with a view to reducing the rates of gold and 

' Fessenden's Report of December, 1864. 
2 Letters of Sept. 14 and 15, 1864. 


exchange, and to relieve the home market of any sur- 
plus it may have of short securities by creating a de- 
mand from abroad for the longer ones. . . . My 
proposal is to take the bonds of the government and to 
pay for them as received, then to sell them in Europe, 
the government to guarantee us against loss by reason 
of a fall in exchange or gold. The amount so paid 
by us might be treated as a temporary loan to the gov- 
ernment until the bonds were actually disposed of and 
we were reimbursed from the sale of the bonds; the 
profits arising from such sale to be ours in lieu of com- 
mission for doing the business. Mr. McCulloch thinks 
the Secretary will have to look to some such arrange- 
ment as a better alternative than to formally offer a 
loan in the European market. Harrington also favors 
the plan." * 

An invitation to Jay Cooke to come to Washington 
to discuss this subject took almost the form of a com- 
mand from Mr. Fessenden and "Governor" Chase, but 
the banker declined it, and on September i6th peremp- 
torily. On September 17th Henry Cooke wrote: 

Dear Jay: — Yours of yesterday from Philadelphia declining 
to come to Washington is received. I was very much inclined to 
read it verbatim to Governor Chase but contented myself with 
Stating its contents to him. He said he appreciated your motives 
and that you were perhaps right; at all events he should not 
further urge your coming. The reason he wanted you here was 
that on a full comparison of views Mr. Fessenden could better 
determine which of one or two plans for foreign loans he should 
adopt. He has fully made up his mind to employ us in such 
loans on the ground that we have more experience in them and 
have heretofore been more efficient than any other parties. His 

1 Letter to J. C, Sept. 13, 1864. 


necessities will not allow him to delay long in coming to a con- 
clusion and your presence would have aided him materially. I 
don't like to conclude any arrangement without your entire con- 
currence nor even to make or entertain any propositions. So I 
have concluded to make my Sandusky trip with you and when we 
return we can fix up our arrangements with the Secretary. By 
that time he will be prepared to make his proposition definitely. 
There has been some talk of Governor Chase's return to the 
Treasury Department. It is not impossible in the event of Lin- 
Cwln's re-election. Governor C. is not averse to the idea but feels 
in regard to Mr. Lincoln a good deal as you do towards Mr. 
Fessendcn — that the overtures should come from Mr. Lincoln. 

On September 20th Jay Cooke wrote to Chase: 

So far as you arc concerned I know your feelings towards me 
and were you alone concerned I should have gone at once, but 
I am aware that as matters stand at present I cannot properly, or 
with any due regard for my own self respect, push myself upon 
Mr. Fessenden's notice, so far as financial matters are concerned, 
although I appreciate fully his expressed and favorable opinion 
of my services in the past and I believe also that he has the 
fullest confidence in me and in our finns. Yet he expressed to 
me at our interview in Washington a sentiment that has hurt me 
ever since and to this effect: that he thought it right to say 
to me tliat he could not think of engaging in any business negotia- 
tions with our finns. As such matters had in the past been 
animadverted upon so constantly by the press and various parties 
disadvantagcously to the Treasury (as I interpreted it) he 
thought it best to steer clear of anything that could be found 
fault with. I hope he has succeeded. ... I thought it cruel 
after all my hard night and day services, which as far as I know 
my heart were as disinterested and patriotic and pure as earth 
ever saw, to be thus insulted by Mr. F. I promptly assured him 
that I never, and did not then seek any favors of the government. 
I had done all for my country's good, and would continue to 
endeavor to do my share towards supporting the government 
finances. If he wanted to avail himself of my experience he could 


have it at any time and without reward or expectation of any re- 
turn from him ; and so we parted good friends. ... I know 
just what ought to be done and could in one week put the ma- 
chiner}' in motion, and save our finances from utter ruin. 

In the meantime the 7-3OS, although they had started 
off with a spurt, were not going out at a very favoral)le 
rate, due, Mr. Cooke's Washington advisers thought, 
to the Department's treatment of the loan. Suspended 
requisitions had reached a total of $130,000,000.^ Some 
of the officers and soldiers consented to receive their 
pay in the new notes and many millions of Mr. Chasers 
five per cent, legal tender notes were redeemed in and 
exchanged for the 7-30S, an operation which was 
doubly useful in that it converted a debt soon payable 
into later maturing obligations, and withdrew from cir- 
culation a large amount of price-inflating currency. In 
producing new income the 7-30 issue, however, had 
been, thus far, without important effect. Mr. Fessen- 
den had one more resource, the $200,000,000 bond issue 
which was authorized on June 30, 1864, in the law cre- 
ating the new seven-thirty notes. The five-twenties 
were still a popular issue. The manner in which they 
had been taken by the people was fresh in the public 
mind and they continued to sell above par. The law 
of June 30, 1864, had given the Secretary great latitude 
and the term could be fixed at from five to forty years. 
This opened the way for another issue of five-twenties. 
Just as Chase had determined to increase the outstand- 
ing amount of the popular 81 s Fessendcn resorted to a 
plan to trade upon the reputation of Mr. Cooke's great 
loan. On October ist the Treasury Department adver- 

^ Fessenden's Report of December, 1864. 


tised for proposals for $40,000,000 of the new five- 
twenties. Mr. Fessenden was now ready to try an ex- 
periment in advancing values earlier urged upon him, 
and he agreed to receive one-fourth of the subscrip- 
tions to this loan in certificates of indebtedness, thus 
clearing the market of a considerable amount of this 
kind of depreciated paper. The Washington office of 
Jay Cooke and Company sent circulars to every bank 
and banker in the country and similar eflForts were made 
by the Philadelphia house, but there was little response. 
Combining their orders Jay Cooke made a bid at a price 
which led the list, but the premium was inconsiderable. 
There were now coming to be so many issues of bonds, 
notes and certificates that, as Fahnestock remarked, it 
was difficult for bankers "to keep track of them," and 
for the people at large the prospect was bewildering. 
Mr. Cooke's men thought that to offer a new loan at 
this time was a serious blunder. They urged that the 
Secretary should reject all bids below one per cent., 
but the entire $40,000,000 were awarded in time for 
him to congrattilate himself upon the success of the 
operation when Congress met in December.^ The ad- 
ditional issue carried down the old five-twenties and it 
was made very clear to every observant man that no 
more loans could be offered for bids except at g^eat 
national sacrifice. 

The alternatives, as Henry Cooke stated them, were 
a foreign negotiation of which he still had the warmest 
hope and a six per cent, gold loan distributed by popular 
subscription. Mr. Fessenden was being argued out of 
the foreign loan idea, Henry Cooke thought by his New 

^ See his report of 1864. 


York advisers, and the Treasury was face to face with 
a problem which its chief seemed to be in no haste to 
solve. It must be remembered that this disturbed time 
covered a presidential campaign, perhaps the most 
ominous the country has ever seen, and criticisms of the 
chief financial officer of the government for tardiness 
in the payment of debts and indecision in the framing 
of his policies should be carefully made. 

In this season of gloom and uncertainty Jay Cooke 
again came forward very prominently and by a bold act 
electrified the financial community. The new five- 
twenties met an unresponsive market and no more of 
them could be disposed of at a premium or even at par. 
One day while the re-election of Lincoln was still in 
doubt the Philadelphia banker was in Washington 
looking after the interests of his house when he met 
John A. Stewart, who had just been appointed Assistant 
Treasurer at New York to succeed John J. Cisco. Mr. 
Stewart was very friendly to Mr. Cooke and earlier in 
the war they had together passed through several nego- 
tiations with mutual satisfaction. Mr. Stewart ex- 
pressed surprise at meeting the Philadelphia financier 
and asked him if he had seen Secretary Fessenden. 
Mr. Cooke said that he had no business to transact with 
the Secretary. 

"Well,*' said Mr. Stewart, "the Secretary wishes to 
see you.'* 

"If the Secretary wishes to see me and will send for 
me," Mr. Cooke replied, "I will take pleasure in calling 
upon him." 

Thus they parted and a little later Mr. Stewart re- 
turned with an invitation for the banker to come to the 


Treasury Department. Mr. Cooke at once responded. 
The Secretary spoke of his financial straits, explaining 
the accumulation of quartermasters' vouchers and the 
immediate needs of the army. He had lately visited 
New York to sell a $10,000,000 lot of bonds and was 
unable to get an acceptable offer. 

'What do you want for them ?" Mr. Cooke inquired. 
I want par and your commission will be the accrued 
interest," the Secretary answered. 

"I will take them myself," said the banker in his in- 
imitable way. "I will take three millions at once, and 
you can give me an option on the rest of the ten millions, 
which I will close after a visit to New York." 

Such a fearless spirit greatly invigorated the Secre- 
tary, who, grasping Mr. Cooke by the hand, said: 

"I have heretofore thought you a protege of Mr. 
Chase, but I now see that he was your protege." * 

Jay Cooke's re-entry into the five-twenty loan opera- 
tions was widely heralded and, coming as it did with 
the news of Lincoln's triumphant re-election, confidence 
in financial circles was sensiblv increased. "We need 
not urge upon you the importance of giving an affirm- 
ative response to the option of the whole ten if you can 
see your way clear," wrote Henry Cooke to his brother 
on November 7, 1864. 'If this is successful other and 
more important negotiations will follow. Of this we 
are assured. We feel that now is our chance." The 
next day, November 8th, Henry Cooke wrote : "We are 
anxiously looking for the effect of the election upon 

^This incident has been described in various apocryphal ways in the 
newspapers for the past forty years, but the above seems to be nearly 
accurate. Mr. Cooke himself told the story in about this language, and 
the facts are borne out by the correspondence for this period. 


loans and earnestly hoping that you will, if necessary, 
strain a point to take the whole amount proposed by 
the Secretary. We know that he is himself almost as 
earnestly hoping for your success in this matter as we 
are, for he wishes to base upon that success a justifica- 
tion in his own mind for greater confidences yet to come. 
He has tried others and found them wanting in that 
patriotic and unselfish purpose which you have shown, 
and wanting moreover in the vim and energy and tact 
to carry through great undertakings. If this present 
undertaking be a success it will be the gateway to other 
vastly more important successes.*' 

The fate of the operation was never in any kind of 
doubt from the time Jay Cooke left the Treasury De- 
partment until he met the New York bankers in the of- 
fice of Fisk and Hatch. He told them that they must 
take these bonds from him, that the government needed 
the money and that he intended at once to raise its 
credit and provide it with funds. He had come from 
Mr. Fessenden with ten million dollars' worth. He 
would keep three millions for himself, apportioning the 
rest among the bankers of New York City. Such 
methods were again electrical. Mr. Cooke then entered 
the market with all his practiced agents to manipulate 
government securities into greater value and in a short 
time bonds were readily distributed to the people. On 
November 14th Henry Cooke wrote to his brother Jay : 

I had a most gratifying talk with the Secretary to-day. I took 
over some of your letters together with quite a pile of tele- 
grams from parties bidding for bonds, giving our answers and 
showing him quite in detail how we had managed to make these 
big sales, and still to run up the market price by going in occa- 


sionally as buyers. He was delighted and when I showed him 
the last quotations he said he was much gratified that we were 
working them off at such a good profit. I told him we did not 
realize all the profit the outside quotations indicated, but that 
we gave the dealers to whom we sold a part of the apparent 
profit, thus insuring their zeal and activity. " Well," said he, 
" you earn all you make and I don't begrudge it. . . . Now," 
said he, " I want to continue sales of governments through 
you. If you can furnish me steadily one million in money per 
day besides the proportion of certificates I will not have to look 
elsewhere for money and would greatly prefer to rely solely 
upon you folks for all I want" I assured him that we could 
furnish the amount desired and that you had a plan which you 
were confident would work. He asked me in reply to ask you 
to come down to Washington as soon as possible to talk over 
further arrangements for the future. I told him I would write 
you to-night and that you would come down as soon as we had 
worked off the present ten. I thought we would finish up our 
sales to-morrow and you would come the next day. He wants 
us to go right on with another $10,000,000, but says we must 
first agree upon the price which shall be a fair one for us, so as 
to leave us a good margin. 

There was in New York at this time a Morris 
Ketchum, whose firm was Ketchum, Son and Company. 
His importance seems rather deeply to have impressed 
Mr. Fessenden and it was predicted that he would be- 
come a rival of the Philadelphia banker as a war finan- 
cier. This firm had been a bidder for the 81 s when 
they were offered in September, although the price was 
only 3.75.^ He and "Uncle" John Thompson headed 
the "New York crowd" in bidding for the first $40,000,- 
000 of the new five-twenties, although their tenders 
were low. Ketchum often visited Washington and he 
loomed large in Mr. Fessenden's eyes as a factor in 

1 Fahnestock to J. C, Sept. 9, 1864, and H. D. C to J. C, Sept lo, 1864. 


government finance. He was "a selfish man" who had 
not acted "as if his heart was in the success of our na- 
tional finances," wrote Fahnestock to Jay Cooke, and 
this view in due time was corroborated by a succession 
of rather painful circimistances. 

From the beginning Mr. Cooke was not pleased to be 
associated with Mr. Ketchum, but he found that he was 
obliged now to face the alternatives — a joint operation, 
or no participation in future sales of the five-twenties, 
for which he had created a market by his own exertions. 
He extended his hand to the New Yorker, assuming that 
the latter's patriotism was equal to his own. 

On November i8th Fessenden wrote letters essen- 
tially alike to both bankers, beginning as follows : 

The condition of the Treasury imperatively demands that 
immediate arrangements shall be made whereby monies may be 
provided beyond the ordinary receipts to meet the accumulated 
and accumulating requisitions in this Department awaiting pay- 
ment. To meet future accruing liabilities, including the matur- 
ing certificates of indebtedness, there must be provided from 
loans at least one and a half millions per day. I am extremely 
averse to the issue of more currency. I am also reluctant to 
increase in any great degree the volume of gold-bearing bonds. 
The record of the late loans shows that increased depreciation 
follows every loan put upon the market for public competition. 
I do not feel myself justified in continuing such a course until 
I have exhausted every other means at my command, and am 
constrained to look at a currency interest bearing security as 
a means by which to replenish the Treasury. There arc grave 
objections to the issue of any new description of bonds with 
currency interest, and moreover I am impressed with the opinion 
that the seven-thirty three year notes, with the advantages of a 
high rate of interest, and convertibility at maturity into long 
six per cent, gold-bearing bonds, is the best form of currency 
interest security that can be put on the market, and that by a 


concentrated effort the subscriptions, now averaging only three 
or four hundred thousand dollars per day, and decreasing, may 
be stimulated to a degree sufficient to meet with the receipts 
from ordinary sources the current demands upon the Treasury. 

Both bankers visited Washington to confer with the 
Secretary. They afterward met in Philadelphia and 
continued their negotiations in New York. It was pro- 
posed by Mr. Fessenden that they should jointly man- 
age the sales of the five-twenties and, as Mr. Ketchum 
believed, take the agency for the seven-thirties which 
was likely soon to be established.^ The five-twenty 
proposal covered $25,ooo,ocx) and the offer was 102, 
one-fourth payable in certificates of indebtedness. The 
agency offer for the seven-thirties was on the basis 
of a commission of one per cent., made admittedly 
with the intention of falling a fraction to meet the 
views of the Department. The two propositions 
were discussed side by side for a fortnight. On No- 
vember 24th Fessenden, McCulloch, Harrington and 
Henry Cooke were in consultation for several hours 
with the letters of Jay Cooke and Ketchum before them. 
Henry Cooke reported the results of this meeting in his 
letter to his brother, dated November 24, 1864, as fol- 
lows : 

I cannot of course give you in writing the details of our con 
sultation. In the course thereof Mr. F. stated that he had 
mainly three points to consider — first, the rate at which we took 
the bonds being 2%. to 2j4 below market quotations; second, 
the charge of one per cent, commission for the 7-30 agency 

^ " In a letter from Mr. Fessenden, dated the i8th, he says, * Your friend 
Jay Cooke has rendered me and himself a substantial service by his 
courage and sagacity, and I am looking to him for better things/ These 
words gave me quiet pleasure. You say, * Mr. Fessenden seems disposed 
to try the old agency.' I have constantly urged it. I had, as you know, 


when his predecessor allowed only three-eighths; and third, 
whether he could get the needed money by any other means. 
The last point he considered settled — the plan proposed the 
only feasible means he knew of to get the money. The first and 
second required further consideration. In regard to the one per 
cent, allowance on 7-30S he says the law authorizes only one 
per cent, to pay all expenses, including the engraving and print- 
ing of the bonds. This and the cost of distribution must be de- 
ducted and he was inclined to allow you the balance of the one 
per cent. This will leave us at least (we figure) % per cent. 
Telegraph me in the morning if I may modify your proposi- 
tion in this way. He will do no better, I am sure. Concerning 
the sale of the 25 millions five-twenties he says he would not 
be disposed to receive in payment more than one-fifth instead 
of one-fourth in certificates of indebtedness. He is firm on this 
point if he lets us have the bonds at 102. He will probably pro- 
pose to-morrow morning to allow us commissions on 7-30S as 
above suggested and to sell us the $25,000,000 at 102, one-fifth 
payable in certificates. This is the substance of his intima- 
tions, but he was not prepared, he said, to close to-day, as he 
wanted to consult further with Harrington and McCulloch, who 
will without doubt advise the programme named. Of course I 
could not press the matter further. The pros and cons were 
fully discussed, all objections and difficulties were met and I 
think answered conclusively. I feel more than ever anxious to 
close the matter to-morrow for, from what Fcssenden says, if 
there are great delays in bringing it to a close the public will 
be in possession of news which will render a negotiation on the 
present basis very doubtful. The news from Sherman within 
the next few days will give bonds another hoist. 

The next day, November 25th, Henry Cooke wrote: 

To-day Mr. McCulloch and Mr. Harrington sent for me, the 
Secretary having reserved his decision until he consulted with 

made up my mind to return to it before I left the Department, and have 
often said so to him. If you are willing to resume it I hope he will." — 
Chase to Cooke, Nov. 24, 1864. Fessenden's letter is in the Chase collection 
of the Pa. Hist Society. 


them. Both agreed that the law did not authorize him to pay 
more than one per cent., including all expenses, printing, ex- 
pressage, etc., which they fixed at one-fourth per cent I 
satisfied them that this estimate was too high and that these 
expenses would not exceed one-eighth per cent, at the most 
Mr. McCuUoch thought the Secretary would find it very difficult 
to justify the payment of so high a rate of commission as that 
proposed, which he said was double that allowed by Mr. Chase 
in the 5-20 loan, while the government assumed in addition the 
cost of sending the bonds to subscribers. To all this I rejoined 
that you never had been paid in that loan the commission to 
which you were entitled, and that you had uniformly said that 
you would never undertake the same work again for anything 
like the same commission — that you were firm in the determina- 
tion not to undertake another negotiation without a fair com- 
pensation, and that the price named was not too high, consider- 
ing the fact that you would have to continue the existing 
allowances of one-half and then divide what was left to you of 
commissions with another party. On this point McC. finally 
settled down upon this — that he should advise the payment 
of }i on the first 25 million and ^ on the balance. In regard 
to the 25 million S-20S McC. argued that the price named (102) 
was too far below the quoted market value of the bonds and 
that in the face of a rapidly advancing market the Secretary 
could not justify himself before Congress and the country for 
selling privately so large an amount at such a discount. In an- 
swer to this I reminded him of the risks we assumed; if we 
had good news from Sherman or elsewhere gold would ttimble 
and, if it fell very heavily, it might cause the bonds to decline 
also 2, 3 or even 4 per cent. The margin I claimed (only 2 
per cent.) was as small as any prudent business man could dare 
to risk in a transaction of such magnitude. While admitting 
the chances of a handsome rise in the bonds, there were also per- 
haps equal chances of a fall. The government could not sell 
five millions of these bonds without producing an instant and 
serious decline, and the sum we proposed to take was so large 
that we could not ignore the probability that before we had 


disposed of it something of the operation would leak out, and 
we might be caught with a large portion of the amount with a 
decline in the market even below that at which we took it. Be- 
sides I reminded him that the quoted rates were the retail and 
not the wholesale rates; that we would be obliged to put out 
the loan in large blocks at rates considerably lower than the 
quoted rates; that if he or any one else were to oflfer to any 
one party even a million in a lump he could not get more than 
2}/2. or at most three per cent, for it, and if a larger rum were 
offered he would get still less, whereas we proposed to take the 
risk of 25 millions at only a safe and prudent margin. I said 
that in selling the ten millions we brought up the price to the 
present rate so that we could oflfer him two per cent, on 25 
millions and that our sale of this 25 would probably still further 
advance the price, so if he should be compelled to sell more we 
could give him a still higher price. . . . Harrington here 
interposed that we could arrange to buy as we saw proper or 
necessary and the government would take the risk of such pur- 
chases by taking them from us in case of failure to sell them, 
allowing us our rates. I told them that this was so different 
from the programme, as we understood it, that I could not act 
without your concurrence and so left them, asking them, how- 
ever, to see the Secretary at once and let us know his ultimatum. 

To make this important record complete, Henry 
Cooke's letter to his brother on the next day, Novem- 
ber 26th, must also be given : ^ 

To-day we have had two interviews with the Secretary and 
telegraphed you his ultimatum. We have tried many other 
propositions, but he will listen to none except the one he pro- 
poses and which we telegraphed you, viz., — We to sell the 25,- 
000,000 5-20S at J4 commission and to take the 7-30 agency at 
^ commission on the first 50 millions and ^ on all after that; 
the commission to be allowed upon the entire issue of 7-30S, 
whether sold by sub-treasuries or otherwise, we allowing the 

1 On the same day Henry D. Cooke wrote a letter to Morris Ketchnm 
reporting the result of his conferences in a more general way. 


commissions paid by sub-treasuries and also to be entitled to 
copfimission on all sums paid out at par, if any, to army and 
navy, though it is not the intention to pay out any in that way.* 
Mr. McCulloch has advised this and relying on this advice the 
Secretary is firm and immovable. We did not decline your 
proposition, but held it for your decision. In the proposed com- 
mission sales of 5-20S we stated to the Secretary that if we. 
undertook them we should manage them as we did the sales of 
our own 10 million, that is, trade them off for certificates and 
81 s and sell them in blocks below the quoted market retail price, 
and take them ourselves in blocks at a margin that would make 
us safe, and on joint account with other parties in order to in- 
duce them to take. The Secretary saw no objections to this; 
but we do. We feel that in our fiduciary relation to the govern- 
ment we must get the highest possible price for the bonds, and 
in all bonds taken on our own account we lay ourselves liable 
to the charge of paying the government less than we received 
for them at subsequent sales. As dealers in these securities we 
have a right to buy them, of course, but such purchases will be 
misconstrued when taken in connection with our relations to the 
government as agents for the sale of the bonds. One of the 
alternative propositions which we made to the Secretary was that 
he should fix a price at which he would sell say 5 millions, 
and when that was sold for another 5 millions, and so on until 
the whol^ 25 were sold. In this connection we suggested that 
we might take five or ten millions at a safe margin below the 
price on the day our first proposition was made. On that day 
the quotations were from 3^^ to 4, but Tie could not entertain 
any other plan but that which he proposes. The five-twenties 
he will deliver only on payment of the money or (which he 
considers the same thing) the certificates of deposit of the na- 
tional banks. Now, my dear brother, you must not think it is 
any fault of ours that the negotiation has taken its present shape. 
We feel confident the Secretary was prepared to accept our 
proposition in reference to the 5-20S and to allow us at least 

^The arrangement could be terminated by either party after notice of 
sixty days. — H. D. C/s letter to Ketchum. 


J4 on the 7-30S, but McC. has convinced him that he ought to 
do no better than he proposes, and we can't make him change 
the determination. 

Mr. Cooke was satisfied with the arrangement in re- 
gard to the 5-20S except that he was not glad to have 
Ketchum associated with him in the operation, although 
this point was not now raised in the negotiations with 
the Secretary. He remonstrated with his partners 
against the reduced rate of commission for selling the 
7-30S because he was planning a campaign for these 
notes which, being expensive, would require a large gov- 
ernment allowance. 

The joint feature of the operation was destined to be 
eliminated without much further ado. Ketchum was 
accused of an effort, either alone or in conjunction 
with other dealers in New York, to depress the market 
preparatory to making on his own account an offer 
for twenty millions more of the bonds at 105 through 
Assistant Treasurer John A. Stewart. The Secretary 
of the Treasury was disposed to accept the bid. He 
was told by Jay Cooke's men in Washington that the 
decline in 5-20S from 1075^ to 106 on November 28th 
and 29th was undoubtedly due to the manipulative tac- 
tics of the New York negotiators. While Mr. Cooke 
was endeavoring through all his agencies to raise the 
price of the bonds in order that they might yield the 
government as large a return as possible the Depart- 
ment itself by encouraging the thought that sales would 
be made to others was depressing the market. The 
Secretary was shown the danger of such competitive 
movements, and in order to get the twenty millions out 
of the field Jay Cooke proposed to Ketchum that they 


should unite to take them. This the New York bank- 
er refused to do, also dedining to co-operate with 
Jay Cooke in the $25,000,000 negotiations already in 
hand unless he were given a share in the 7-30 agency.* 

The efforts to sell the market down by Ketchum, or 
by what Fisk and Hatch called "the Exchange Place 
crowd,'' with a view to reducing the price for the twenty 
millions to 103 or 104, was firmly resisted by that house, 
and David Crawford of Clark, Dodge and Company, 
acting for Jay Cooke. They "stood firm as a rock 
and blocked his game,'* said Fisk and Hatch on De- 
cember 2nd. "We believe that he and other parties are 
still largely short and that if holders are firm we can 
make them pay for it. It is absolutely essential to the 
success of the 7-30 loan, if that is to be relied upon in 
future, that the gold bearing bonds should be kept up. 
Our two neighbors on our side of the street (between 
you and us), are weak-kneed and do not stand up to the 
market as they ought to do. When you must sell, let 
us or Crawford know it, and we will try to put them out 
where the market will not feel them." 

Mr. Cooke had been careful to meet Ketchum at the 
Sub-Treasury in Mr. Stewart's presence when the offer 
(105^) was made for the twenty millions and word 
of Ketchum's refusal to take a hand in the operation 
was soon carried to Secretary Fessenden, thus prepar- 
ing the way for important future events. The arrange- 

^Letter of Morris Ketchum to J. C, November 28, 1864. Mr. Cooke's 
men in Washington predicted that Ketchum would " ruin the market " 
before he finished with it and spoke of his delayed remittances. They 
were " out of patience " with Fessenden's want of management, but did 
not publicly complain because they knew, they said, that he was really 
friendly to the house. 


ments for a sole agency for the sale of the 7-30S were 
forwarded, too, by Ketchum's flatly declining to accede 
to the Secretary's ideas as to commissions, t. e., ^ on the 
first 50 millions and ^ on further issues, while Jay 
Cooke had been careful not to refuse absolutely to act 
at these rates. 

It must be confessed that efforts were shrewdly put 
forth by Mr. Cooke and his partners to induce Ketchura 
to declare that he would not sell the seven-thirties on 
the terms proposed by the Department. Jay Cooke had 
written him on November 26th, in regard to the subject 
in hand: 

I enclose telegraph received to-day from Washington 
showing tliat the delay has worked badly. The idea of selling 
5-20S at a price is abandoned and we are to have them, if at 
all, for a paltry J4 P^r cent. — in other words, the Treasury is 
still following the old policy of saving at the spigot and letting 
out of a big bung hole. Millions are squandered in expeditions 
and iron-clads, but this great work of iron-cladding our national 
credit is cramped and made a failure, for what? Why because 
soinetody may get a small percentage for the use of their brains, 
capital and influence. It's too bad, but what shall be done? 
You see he proposes ^ commission on the first 25 or 50 millions 
7-30S and 5^ afterward. It cannot be done for this and leave 
anything to divide — not at all without cutting down the ex- 
penditures too low for efficiency or the allowance to banks and 
others to a figure that will dissatisfy them. ... I much 
prefer not to have anything to do with the 7-30 matter, if you 
will take it. At any rate, it would pay neither you nor me to 

take it on the terms proposed and divide with any one 

Are you willing to do it? If so go ahead. If you decline to 
join in it I will undertake it even if there is no profit, if you 
think best. The risks will be great and the one per cent, would 
only yield a joint account of ^/^^ to }4* that is, J^ each. At 
the lower rate I cannot see any profit, yet I will undertake it 


alone or you can do it alone. I leave you to decide which shall 
do it. 

In this as in later letters Mr. Ketchum was shunted 
away from the undertaking, and he was soon a dis- 
credited man at the Treasury Department. Fessenden 
himself, was still "unduly impressed" with a sense of 
the man's "power and importance/' Fahnestock wrote, 
fearing that if he did not share in the operation he 
might "raise a howl." But through the influence of 
McCuUoch, Harrington, Stewart and, best of all, Sher- 
man who had several conferences with the Secretary, 
and the positive statement finally extracted from Jay 
Cooke at the ripe time that he would not act, if cramped 
by such an alliance, the thought of a joint agency was 

On December 2nd, Mr. Cooke wrote to Secretary Fes- 
senden : 

To please you I tried my best to work with Mr. K., but could 
not I wouldn't do it for all the world. I wish to say nothing 
disrespectful or harsh of him, only that in my opinion any con- 
nection with him would so clog my movements, and chill my 
spirits, and lower my self-respect that my efforts to do a great 
work for you would be nearly a failure. He has his ways and 
I have mine. We totally differ in all things from beginning 
to end and after four days' patient trial I give it up as a bad 
job. ... I really think you overestimate his influence and 
money power. New York is a large place and no dozen or 
twenty men combined can monopolize its influence and power. 
. . . Now let me assure you that so soon as the seven-thirty 
loan can be properly brought out, say ten to fifteen days, after 
I take hold of it exclusively, I can give you all the money you 
need from day to day and take all the care and anxiety off your 
mind. I do hope you will remain in the Treasury. If you will 
do so I know we can work for you, and make your big chair 


a delightful seat, and give you such aid that financiering will 
bring you increased reputation and the prestige of great success. 
, . • What I want is that the 7-30 should be announced as 
the exclusive loan hereafter, and that it should be the loan into 
which the certificates of indebtedness now out should be ab- 
sorbed, as they fall due, or sooner if possible, and that so long 
as it is successful it should run on even up to 1,000,000,000 (one 
thousand millions). 

When Henry D. Cooke and Fahnestock dined with 
Sherman in his new home in K Street, on December 
2nd, he said Mr. Fessenden had distinctly stated that 
he would make Jay Cooke the subscription agent of the 
government and the Secretary soon said so himself, ask- 
ing Henry Cooke to telegraph to his brother to come to 
Washington at once. 

Jay Cooke at this time was in Ohio, accompanying 
thither his mother who had been visiting him at his 
home in the Chehen Hills, and the summons could not 
be obeyed until his return. Then the Secretary had 
changed his mind. He was induced through New 
York influences to make one more effort to sell the 
seven-thirties through the national banks. On Decem- 
ber 14th, Henry Cooke wrote: 

"The more we think of it the better we are satisfied 
with the Secretary's determination to give the national 
banks another chance at the 7-30S. We ought to do 
all we can in perfect good faith to help the movement, 
and if it then fails it can't be said we have thrown anv 
obstacles in its way. And meanwhile we should not 
give out any intimations of any expectation of failure 
on the part of the banks or of your being called here- 
after to the agency." 

On December i6th, John A. Stewart wrote Mr. 


Cooke a confidential letter: "I have very little doubt 
that the Secretary will find it desirable to avail of your 
services as agent to move the seven-thirties. He has 
doubtless been compelled by the pressure brought to 
bear upon him to give the banks one more chance." 

"The footing of suspended debt," as Henry Cooke 
said was "appalling." The requisitions on December 
14, 1864, reached a total of 168 millions; viz., army pay, 
59 millions; transportation and supplies, 100 millions; 
navy, 9 millions.^ Nothing relieved the situation but 
the ten-forties which were taken with more avidity than 
ever before, being about to finish their career hand- 
somely, and some further sales of five-twenties which Jay 
Cooke and a few New York bankers were still promot- 

Two events inject themselves at this point into the 
record of Mr. Cooke's life, the appointment of Mr. 
Chase to be Chief Justice of the United States and the 
death of Eleutheros Cooke. While the new Secretary 
of the Treasury was making his first report to Congress, 
the old was being appointed to the Supreme Bench. 
This occurrence was announced by Henry Cooke in a 
letter of December 6, 1864, when he wrote: "Governor 
Chase received a splendid compliment to-day from the 
Senate. When his name was sent in for Chief Justice, 
it was not even referred to a committee (the usual 
course), but he was confirmed unanimously. There 
was not a dissenting vote even from the opposition. 
We consider that we share in this triumph after all the 
abuse heaped on him and us." 

They did share in the triumph for both Jay and 

^ Fahnestock to J. ,C., December 14, 1864. 


Henry Cooke had used all their oflfices to bring about the 
appointment. Although the President had practically 
promised the post to Mr. Qiase before he engaged to 
"stump" the western states for the Republican ticket, 
there was fear that Mr. Lincoln would change his mind 
under the pressure of those around him who had proven 
themselves so imfriendly to the "Governor" while he 
had been a member of the cabinet. It was suggested 
that Stanton might leave the War Department to go 
upon the bench. Jay Cooke caused such men as Henry 
D. Moore, Morton McMichael and George H. Boker to 
exert themselves in his friend's behalf. Chase him- 
self urged the financier to take up the cause actively 
and despatch leading Pennsylvanians to Washington to 
speak to the President.* It was with deep satisfaction 
therefore that Mr. Cooke saw the business which had 
occupied so much anxious attention happily concluded. 
The death of Eleutheros Cooke, who constantly felt 
and expressed the greatest pride in his son's private 
and public achievements, saddened the New Year. He 
found a father's and grandfather's joy in all his de- 
scendants. "They are such, take them all in all with 
their collaterals and sequents," he once wrote, "as no 
other old patriarch of modern times, within my knowl- 
edge, has ever been blessed with." But in Jay he had 
found as he said, "a favorite son, the consummation of 
his highest ambition." "It is a source of perennial hajy- 
piness to me," he declared again, "to know that the 
whole country decrees that you have made yourself one 
of its foremost benefactors and that your very name is 
a tower of strength and financial power to the republic 

^ See his letter to Cooke from Cincinnati, November i6^ 1864. 


in this dark hour of its peril and tribulation." It is 
likely that none of his sons so well understood political 
matters of all kinds as Eleutheros Cooke. Certainly 
none was in the same manner grounded in constitutional 
law and the philosophy of government, fitting him for 
public life. The man who in Congress in 1832 and 
1833 had so eloquently defined the nature of the gov- 
ernment as a federal union, and studied political events 
with intelligence daily until his death was one somewhat 
apart from the people of his time. He saw the war 
nearly to its end and felt its tortures as it wrenched 
the nation in its grasp. He was seventy-seven and 
dwelt upon his declining powers, although he was es- 
sentially well and strong to the last, frequently visiting 
his sons in the East as they regularly and dutifully vis- 
ited him in Sandusky. On December i6th, he had gone 
upstairs whistling a merry tune, and after retiring for 
the night, was suddenly seized with an attack, which the 
physicians diagnosed as congestion of the brain. There 
was some recovery, but Jay Cooke who had just re- 
turned to Philadelphia, after taking his mother home, 
was sent for again, and reached the bedside to be pres- 
ent at his father's death which occurred peacefully on 
December 27th. 

Mr. Cooke's engagements soon called him back to 
Philadelphia. Comforting his mother with letters as he 
sped East, and after his arrival there, he again took up 
the pressing cares of his great business. The firm had 
never enjoyed a more prosperous year than that which 
was now closing. The net profits of the Washington 
house for 1864 were $241,400.43. The partners di- 
vided $230,000 among them. Jay Cooke receiving $76,- 



667; Moorhead, H. D. Cooke and Fahnestock each 
$38,333, and J. W. Weir of Harrisburg, $11,500, while 
"Old Patriarch Jacob" who took the Lord's tithe in all 
of Mr. Cookers businesses was credited with $23,000, 
which was to be devoted to commendable charities. A 
balance of $3,833 remained, of which, on Jay Cooke's 
advice, $3,000 were divided equally between H. D. 
Cooke and Fahnestock, the odd remainder being pre- 
sented to William S. Huntington, of the First National 

Mr. Fessenden's administration of the Treasury De- 
partment was now almost at an end. He had been re- 
elected to the senatorship in Maine, so that he was easy 
upon the point of his personal future, and he announced 
his determination of quitting the office in favor of 
Hugh McCuUoch, whom he had urged as a suitable 
appointee at Mr. Chase's retirement. There was again 
some thought, born of a warm desire in the Cooke 
houses, that John Sherman might be the choice, while 
the suggestion was made in several newspapers, that 
Jay Cooke himself should be appointed, an impossibility 
of course in view of his relations with the government 
as a fiscal agent. *'We don't want these scribblers to 
nominate us to the Treasury," Jay Cooke wrote his 
brother. "It is distasteful and does harm." Others 
favored Senator Morgan of New York, who had Sew- 
ard's support. Sherman was not unwilling. On Jan- 
uary 18, 1865, Henry Cooke said that in a conver- 
sation with McCuUoch, he had learned that the 
Comptroller of the Currency who had made himself a 
considerable influence under Mr. Fessenden, could have 
the post if he wished it, and if the President were able 


to provide for Judge Usher, also of Indiana, then at the 
head of the Interior Department. McCulIoch told 
Henry Cooke that he did not care for the secretaryship, 
"yet he would rather take it 'than have it fall into the 
hands of a politician, who would use it for the purpose 
of controlling the successorship to Mr. Lincoln.' After- 
wards he said he would like to have a trial of 'admin- 
istering the Department upon strictly business principles 
just as he would a business firm or bank without refer- 
ence to politics.' He deprecates the idea of a politician 
getting it. He mentioned in this connection, Robert J. 
Walker, whose appointment he said would be the worst 
that could possibly be made. He thought the papers 
ought to move in the matter against such an appoint- 
ment, and suggested that you might set them going. I 
repeat his suggestion and of course you will do as you 
please in connection with it. I believe that if McCul- 
Ioch were to make a move for the place he would get it, 
but he tells me that he don't want it, and would onlv 
take it to keep out such a man as Walker, or others of 
that stripe in the New York stock jobbing interest. I 
don't think Sherman stands much chance of it, first, be- 
cause his position is such that he can't appear to be a 
candidate, and second because the politicians are op- 
posed to it as a move strengthening the family too much, 
and they are beginning to be afraid of General Sher- 
man (an absurd fear), as a presidential candidate. 
Fessenden favors McCuUoch and the President feels the 
same way personally." 

Mr. Cooke did not share this view. "I think it 
would be a terrible misfortune to take McCuUoch as 
Secretary of the Treasury," the banker wrote at this 


time : * "I have a poor opinion of him. He is not the 
fittest man for the place. His ideas are not right. He 
seems to be wanting in patriotism and faith. His cal- 
ibre is as a bank officer — no higher. He is wanting 
in faith in regard to the national banking system, fears 
it will go to ruin, etc. etc. . . . His views of our 
finances are too gloomy. The times require a sanguine 
man and not one who is always croaking and expect- 
ing a breakdown. Prudence killed General Butler at 
Fort Fisher, and sanguineness gave us the great vic- 
tory. We cannot save the finances unless a bold, cheer- 
ful, hopeful, sanguine view — a brag view is taken of 
our condition. The people must be encouraged, not 

Convinced that he himself could not well obtain the 
place, Sherman seems to have turned his influence to 
Senator Morgan. "By doing so,'' said Henry Cooke, 
writing on January 19th, '*he secures his permanent 
friendship. He says Morgan is a clear-headed, bold 
and vigorous business man, not tied up to a clique, and 
independent and fearless. We think he would make a 
better Secretary than McC' 

'The Secretaryship should go to John Sherman," Jay 
Cooke wrote his brother on Tanuarv 21st, "McC. is not 
fit for it; neither is Governor Morgan or R. J. Walker. 
Sherman could get it. Dennison could go to the Senate, 
Fessenden back to his committee." Despite his strong 
feeling upon the subject, Mr. Cooke advised his Wash- 
ington partners "to keep out of the fight," and they did 
so, in the meantime again bringing Fessenden to the 
point in regard to the 7-30 agency at which he seemed 

1 To H. D. C, Jan. 18, 1865. 


to be in December. The 7-30 subscriptions through 
the national banks were disappointingly small, as could 
have been foreseen. On January 9th, Henry Cooke 
wrote that the total sales to date were $115,000,000, 
about $20,000,000 of which were distributed to the sol- 
diers in lieu of cash payments. The daily sales during 
the past month had averaged about $600,000. On Jan- 
uary 1 2th, the subscriptions were only $500,000 and the 
Secretary said he would wait a few days longer, when 
if they did not improve he would establish the agency. 
A statement of the sales of 7-30S and ICH40S at Jay 
Cooke's Philadelphia and Washington houses, and at 
his two national banks, the First National of Philadel- 
phia, and the First National of Washington, was pre- 
pared for the Secretary, showing larger footings "than 
any other two or three parties in the United States,*' ^ 
and he was not allowed to forget that there was a way 
out of his many difficulties. The New York national 
banks, especially *'Uncle'' John Thompson's First Na- 
tional and Orvis's Ninth National, which with Ketchum 
and his influences had defeated the plans for organizing 
the agency in December, were still actively antagoniz- 
ing Mr. Cooke. They were giving their country cus- 
tomers as high as 7-16 of the one-half of one per centum 
allowed as a commission, and making every effort to 
surpass the Philadelphia totals. On February 26th, the 
sales of 7-3OS at all points aggregated $1,250,000,^ and 
they rarely exceeded this amount. The decision at the 
end was suddenly made, and the power conferred upon 
Mr. Cooke was in practically the same terms which were 

1 H. D. C.'s letter of January 12th. 
2H. D. C to J. C, January 26, 1865. 


agreed upon, when Ketchum had wished to have a hand 
in the operation. 

For several weeks there had been pending in Con- 
gress, a bill to allow the Secretary to issue in 7-30 notes, 
a larger proportion than one-half of the $400,000,000 
which he was authorized to borrow by the law of June 
30, 1864, and to stop the new emission of the gold bear- 
ing 5-20S. When this bill was passed Mr. Fessenden, 
took the step which had been so long delayed. He told 
Sherman that "he had given the present plan a fair trial, 
and it did not work satisfactorily, and that by starting the 
agency before going out, he would relieve his successor 
of all resix)nsibility in the premises, while he himself, 
would be on the floor of the Senate to defend the pol- 
icy.*' * The paper making the appointment read as fol- 

Treasury Department, 

January 28, 1865. 
Sir : — You are hereby appointed the general agent of this De- 
partment for disposing of the loans of the government. You 
will from time to time receive instructions, in which instruc- 
tions will be named the compensation to be paid to you for the 
specific duties you may be called upon to perform. 

I am very respectfully, 

W. P. Fessewden, 
Secretary of the Treasury. 
Jay Cooke, Esq. 


This brief commission was followed by a longer letter: 

Treasury Department, 

January 28, 1865. 
Sir : — Having this day been appointed the fiscal agent of this 
Department you will prepare yourself to assume the duties of 

1 H. D. C. to J. C, January 23, 1865. 


general agent for the disposition of the 7-30 loan and com* 
mence your operations on the first of February next. 

The necessities of the Treasury require that at least two 
millions of dollars shall be daily realized from the sale of the 
7-30 notes and it is expected that after sufficient time shall have 
elapsed to enable you to complete your arrangements this sum 
will be the minimum amount of daily sales. 

When this loan was first put upon the market the several na- 
tional deposit banks were made agents therefor and the commis- 
sion allowed was one-fourth of one per cent, on the amount dis- 
posed of by them respectively, the Department assuming all ex- 
penses of advertising and otherwise necessary in making the loan 
known to the people. 

My expectations not having been realized, as a further stim- 
ulus, all banks and banking associations and other persons or 
parties were invited to act as agents of this Department and 
the maximum commission offered was increased to one-half per 
cent. The amount of daily sales, I regret to say, falls far short 
of the necessities of the Treasury. 

My faith in the willingness and ability of the people to supply 
the government on fair terms with the monies necessary to carry 
on the war and suppress the rebellion remains unchanged. The 
form of the loan now offered to them is in my opinion the best 
that can be devised for present emergencies, and it must be only 
necessary for the people to become familiarized with its ad- 
vantages to induce an investment of their surplus earnings 
therein ; which surplus if so applied would with the receipts from 
ordinary sources be quite sufficient to enable the government 
promptly to pay our soldiers and meet all other demands conse- 
quent upon the war. 

Your success in popularizing what was known as the 5-20 loan 
prompts me to take advantage of the same machinery to bring 
before the people the advantages of the 7-30 loan. The Treas- 
ury must be supplied and the demands upon it are of so im- 
perious a nature as to forbid further delay or further experi- 

The commissions to be paid you will be at the rate of three- 


fourths of one per cent, on the first fifty millions disposed of, 
and five-eighths of one per cent, on the second fifty millions^ 
and for the balance of the loan if successful the rate of commis- 
sion will be fixed hereafter. This commission, it is distinctly 
understood, must cover all expenses of advertising, clerical force, 
exchanges, travelling agents' commissions, allowances to sub- 
agents and all other expenses which may be necessary to the 
surcessful disposition of the loan, including your own con[^)ensa- 
tion. The Department simply undertakes to deliver the notes 
on the lines of any railroad by express at its own cost No 
notes will be delivered until the monies therefor have been paid 
into the Treasury and the certificates of deposit received at this 

You are expected and directed to allow to sub-agents now em- 
ployed by the Department, until otherwise instructed, the same 
rates of commission as are now allowed. You are further ex- 
pected to advertise generally in the papers of the United States 
-lo make the advantages of the loan properly and thoroughly 
understood through the public press, and by circulars and other 
means direct the attention of the people thereto; and also to 
appoint 3uch number of sub-agents as will enable you to present 
directly to the people of each locality the claims which the gov- 
ernment has upon them and the benefits to be derived from their 
investment in the loan placed under your charge. 

Should the Secretary think proper to suspend your agency at 
any time he will do so at his discretion; but if this should be 
before the first fifty millions shall be disposed of for any cause 
other than want of success in accomplishing the object of such 
agency, or misconduct on your part, any proper expenses you 
may have incurred beyond the percentage received for so much 
of the loan as may have been disposed of and a fair remunera- 
tion for your services will be paid by the Department. 

It is to be further distinctly understood that the rates of com^ 
pensation for your services and expenses hereinbefore named, 
are liable to be decreased in case the amount appropriated by 
the act of June 30, 1864, shall not be found sufficient to meet 
the same with the other necessary expenses enumerated in the 



ninth section thereof, to such an extent as may be found neces- 
sary in order to bring the whole of said expenses within the 
amount appropriated. 

It is my desire that the government shall rely entirely upon 
loans and taxation to meet future expenses. The volume of 
gold-bearing loans is as large as the present convenience of the 
Treasury will permit, and I trust it will not be necessary here- 
after to resort to bonds or Treasury notes bearing other than cur- 
rency interest. 

Your utmost energies will be required in this behalf and I 
shall expect to see the result of your efforts in the immediate 
increase of receipts from this source. 

I am very respectfully, 

W. P. Fessenden, 
Secretary of the Treasury. 
Jay Cooke, Esq., 
Fiscal Agent, 
Philadelphia, Pa., 

To these letters Jay Cooke replied, accepting the ap- 
pointment in the following terms: 

Washington, Jany. 28th, 1865. 

Sir : — In accordance with the terms of your letter of this date 
I resume the General Agency for the sale of government loans, 
my sales of seven-thirty Treasury notes to commence on the first 
day of February next, continuing existing arrangements with 
national banks and sub-treasury agencies, and allowing to and 
through them the same commission now paid to and through 
them by the Department. 

Out of the allowance made to me upon all sales I shall appor- 
tion commissions and such sums for advertising and other ex- 
penses as in my judgment may best advance the loan by stimulat- 
ing sales. The allowance is understood to be three-fourths of 
one per centum upon all seven-thirty notes disposed of or issued 
by the Department up to the amount of fifty millions of dollars 
and five-eighths of one per centum upon all amounts disposed 


of or issued by the Department in excess of that sum not ex- 
ceeding one hundred millions in all, the rate for sums beyond that 
amount to be fixed hereafter. 

Daily reports of subscriptions with names and addresses of 
subscribers will be furnished in order that the notes may be for- 
warded by the Department as at present. 

Assuring you of my earnest determination to omit no eflFort 
necessary to the accomplishment of the work you have entrusted 
me with, I am. Very respectfully, 

Your obedient servant. 

Jay Cooke. 

Mr. Cooke's first act after receiving his appointment 
was to prepare and send out a circular to banks and 
bankers in all parts of the country. It was as follows: 

Office of Jay Cooke, Subscription Agent, 

Philadelphia, January 28, 1865. 

Sir: — Referring to enclosed letter from the Secretary of the 
Treasury, appointing the undersigned General Agent for the sale 
of government loans, I solicit your earnest co-operation in the 
sale of 7 3-10 Treasury notes, confident that this loan, properly 
placed before the people, can be made to supply the current de- 
mands upon the Treasury. 

The commission allowed you upon sales will be three-eighths 
of one per cent., and will be deducted by you out of each sub- 

The object of this commission being not to sell the loan to 
purchasers at a discount, it is requested that allowances to in^ 
vestors shall cease ; and you will be expected to expend a liberal 
portion in commissions to sub-agents, expenses of advertising 
and otherwise bringing the loan to the notice of the people. 

The system of indiscriminate allowances to purchasers who do 
not buy for re-sale is believed to have influenced very few in- 
vestments that would not have reached the Treasury without 
them, and has absorbed large sums that might have been ex- 
pended to the direct advantage of the loan through agents and 


On and after the first day of February you will please remit 
me, at Philadelphia, the amount of your daily orders in draft on 
New York, Philadelphia, Baltimore, Boston or Washington, 
adding accrued interest to day of receipt here and deducting the 
three-eighths commission. 

Or you may deposit in your nearest Sub-Treasury or depos- 
itory national bank, computing interest only to date of deposit 
and deducting commission. In the latter case you will tele- 
graph me (at my expense) the amount of your subscription and 
have certificates issued in the following form : 

** I certify that has this day deposited to the credit of 

the Treasurer of the United States dollars on account 

of Jay Cooke, Subscription Agent.*' 

Original of this certificate you will forward to Jay Cooke and 
Company, Washington, and duplicate with details of your order 
to me at Philadelphia. 

The 7 3-10S will be forwarded by the Treasury as rapidly as 
they can be prepared, from the Department, by express, freight 

Earnest effort upon your part and liberal advertising will, I 
am confident, prove not only highly serviceable to the govern- 
ment, but profitable to yourselves. 

Any suggestions from you looking to the greater populariza- 
tion of the loan I shall be pleased to receive and consider. 

Very respectfully, 
Jay Cooke, 
Subscription Agent. 

Another circular worded in a slightly different way 
was sent to the depository banks and enclosed in all of 
them was this brief announcement over Mr. Fessenden^s 
name : 

Treasury Department, 

Jany. 28th, 1865. 
Sir: — I have this day appointed Mr. Jay Cooke of Philadel- 
phia General Agent for the sale of government loans. 
On and after February i, prox., he will receive your sub- 


scriptions to the 7 3-10 loan, paying your commissions from that 
date and arranging with you all details of settlement. 

You will forward to this Department as soon as practicable 
your accotmt for commissions to and including 31st instant 

W. P. Fessenden, 
Secretary of the Treasury. 

Mr. Cooke sent personal letters to the sub-treasurers 
and the most valued of his old five-twenty agents. The 
Assistant Treasurer at New York wrote, in a most cor- 
dial spirit: 

United States Treasury, 
New York, January 30, 1865. 
My dear Sir: 

Thanks for yours of 28th apprizing me of Mr. Fessenden's 
action in regard to seven-thirties. He has acted wisely though 
somewhat tardily. I have no doubt of your ability to sell at least 
$2,000,000 per day. 

My best wishes for your entire success in the matter. 

Very truly yours, 
John A. Stewart. 

Letters and telegrams poured into Mr. Cooke's office 
congratulating him upon the appointment and assuring 
him of the assistance and cooperation of banks and 
bankers in all parts of the Union. Fisk and Hatch 
telegraphed: ''We are with you heart and soul in the 
seven-thirty arrangement. You can count on our best 
cooperation." Livermore, Clews and Company prompt- 
ly wrote: ''We know the almost herculean labor re- 
quired to make the agency a success, but with a long 
pull, a strong pull and a pull all together, we believe it 
can be accomplished." There was but one skeleton at 
the feast and that appeared in a letter from Morris 
Ketchum : 


Morris Ketchum 

T. Belknap, Office of Ketchum, Son & Co. 

I B.- kSu": No. 40 Exchange Place 

Lw Ketchum 
Lw M. Swan 

New York, January 31, 1865. 

Dear Sir: — Your letter informing mc that Mr. Fessenden has 
selected you as special sub-agent, I presume for the sale of the 
7-30S, and inquiring if my house will accept in common with 
the old five-twenty agents has been duly received, and I beg to 
state that they decline the agency. 

Respectfully yours, 

Morris Ketchum. 
Jay Cooke, Esq., 



Mr. Cooke's appointment to the seven-thirty agency 
was the signal for the adoption of all those methods 
which had been so successfully employed in the distribu- 
tion of the five-twenty loan when it was committed to 
his hands for distribution among the people. He 
moved instantly. The delay in the creation of the 
agency led him to attack the work with the more vigor 
and enthusiasm. He had a great store of pent-up en- 
ergy which was apportioned in needful parts to his part- 
ners and assistants, to be re-apportioned until the 
smallest unit in the system in the Northwest, in Cali- 
fornia, in military camps in the South, in Europe re- 
sponded, and the call to the people burst forth with 
irresistible force. The history of finance, public or 
private, shows no movement in any way comparing 
with the unique campaign by which Jay Cooke popular- 
ized and sold the great seven-thirty loan. The oper- 
ation was as marvelous for its size as for the rapidity 
with which it was completed. Secretary Fessenden, 
through the national banks had with difficulty sold 
$133,000,000 of the seven-thirty notes in the seven 
months of his term preceding his commitment of the 
business to Jay Cooke. Mr. Cooke in less than six 
months ran the issue up to $830,000,000. He entered 
upon the work while Grant was investing Richmond, 



and the expenses of the war were at their greatest 
height. The money which was procured through the 
seven-thirty agency paid the troops who brought the 
war to an end, and facilitated the disbandment of the 
largest body of soldiery ever assembled on this con- 
tinent, returning them to their homes with their wages 
in their pockets, and with words of praise in their 
mouths for the country which had sent them forth to do 
its battles. 

The one peculiar characterizing mark of Mr. Cooke's 
sale of the seven-thirty loan, was his wide and system- 
atic advertisement of it. This was accomplished 
through the agencies which he had used so successfully 
in 1863, while distributing the five-twenties. Made 
confident now by the pledge of a more generous allow- 
ance from the Department, the conditions under which 
he worked were much more assuring. It was defi- 
nitely known what he would receive for his services and 
he was enabled therefore to conduct the operation with 
more economy and despatch. Mr. Cooke inserted the 
advertisement announcing his appointment in many 

It was translated for the German newspapers, which 
were soon loudly advocating the "Sieben-Dreissiger 
Anleihe" and publishing reading notices headed "J^y 
Cooke wieder Regierungs-Banquier.** This form of 
announcement was followed by another which enjoyed 
wider and longer use; but the financier's most impres- 
sive advertisement in these first days of the loan was a 
catechism ^ similar to that which was used so effectively 
in the five-twenty campaign. 

^On February 9, 1865, Henry Cooke wrote to Jay Cooke: "Your 


The first important engagement of newspaper men for 
Mr. Cooke's staff brought into his employ, Samuel Wilk- 
eson and nearly included Whitelaw Reid. Wilkeson 
became the subscription agent's principal aide in adver- 
tising the loan and for several months was regfu- 
larly connected with the Philadelphia house. His sal- 
ary was fixed at $6,000 a year, which he demanded be- 
cause he was shortly expecting Horace Greeley to pro- 
mote him from the Washington bureau of the New 
York Tribune to the managing editor's oflBce of that 
newspaper.^ He arranged with Greeley for a fur- 
lough, when Mr. Cooke came to his terms, and pro- 
ceeded with his new duties at once. He should be made 
the "chief of your editorial force," wrote Henry Cooke, 
"and be employed at Philadelphia and New York where 
he can do you the most good. His specialty should be 
the manufacture of editorials, letters, notices and so 
forth to be used by your other agents, and inserted in 
the papers, etc. He will be in Philadelphia and will 
see you Monday." * 

In the autumn of 1864, Whitelaw Reid was about to 
purchase an interest in the Cincinnati Gazette,^ and to 
consummate the bargain, he after a conversation with 

' Answers and Questions ' I submitted to the Secretary, who was much 
amused at their ingenuity. I wish you would send us a lot of them." 

* H. D. C. to J. C, February 6th. 

«To J. C, Feb. 9, 1865. 

3 " I had happened to mention to him [Jay Cooke] that I was about to 
make this purchase and had saved about one-third of the money neces- 
sary, but should have to leave the rest to be paid in installments secured 
by the stock. He at once offered to lend me the money himself at a low 
rate of interest. On my saying that I did not see how that could be 
managed, since I should have to make the payment in Cincinnati, where 
I was then going, and the stock could not be deposited as security for 
the loan until the payment had been made he replied, ' Don't bother 



Tbe Stervuiy, of tlM Trrannry barinff ftppointfd lb* 


For the nuuMffement and Mle of tbc new sad populM 

7-30 LOAN, 

(wblch Is alMO Ibr two and * b*ir ffon, ftt7 s-10 per 
cent, intereit In currency, and payable at maturltjr, or 
Awdeble tn tbe populftr 


I hereby fkiTlte all National and State Banks; all 
Frfrate Baakrrs, Savlnff Ttonda, and otbe^v, to en- 
deavor to dlipoae of tbeae NOTBB TO TBE PEOPLE 
f ibetr re wp ectlve nel^boebooda. A Mbefal oommto' 
rton, snfllci^nt to denra>' all adverthlnf expensce and 
leare a Mr profit fbr nerrlci^, will be allowed. CIR- 
AmilKbed on application to the nndemlgned. 



No. 114 BoutU 'TIXIliD Street* 

V. S. 7-30 LOAN. 

Uy aathority of the Seerelaiy of the Treaanry. the 
undersigned hat auumcd the General Sabaeripllon 
Agenej for the aale of United States Treasury Notci>, 
bearing seven and three-tenths per cent, intereni per 
unnnm, known as the 


These NotecaH issued under daU of August IHh, IM4, 
and are payable three years from thai time, in car4 
rency, or are_ conTertible at the option of the holder 
Into »- 

CT. 9. J-'^^O Six iHsr cent. 


These bonds are now worth a premium of nine per 
vent., inoluding gold Interest from Nov.. which make* 
the actual profit on the 7.30 loan, at current rate*, 
including interest, about ten per cent, per annum, 
Itesides Its ixfrnptiou/rom SAtrtt and mimdriyal tifuvm 
tioMt tckirk o/t*t$ from one to thrte per reui. morr, 
according to the rate levied on other property. The' 
interest is payable semi-annually by coupons attached 
to each note, which may be out off and sold to any' 
linnk or banker. 

The intereft amounts to 

On* cent p*r day oa a 9S0 not*. 
Two cento " '* $100 *• 

Ten $500 '•4 

20 *'$1000 " 

$1 •*$5000 *' 



Notes of all the denominations named will be 
liromplly ftirnbhed upon receipt of sobscriptiona. 
This is / ' 


now offered by tbe Oovemment, and it Is confidently 
expected that Ita superior advantages will make it the. 


Lees than $300,000,000 remain unsold, which will 
probably be disposed of within the next 60 or 00 days, 
when the notee will undoubtedly command a prr> 
mium. as has uniformly been the ease on closing the 
■•ubseripCions to other Loans. 

In order that eltlsens of every town and rection of 
the country may be afforded fiMilltics for taking the 
loan, the National Banks. State Banks, and Private 
Bankers throughout the country hare generally agreed 
to receive subscripCtoas at par. Subscribers will 
<elect their own agents, in whom they have confidence, 
and who only are to be responsible for tbe delivery of. 
the notes for which they receive orders. 


SuMKCKiPTiOM AoRNT, Philtdelpbiti^ 





7-30 XT. S. Loan. 

Mm. /at Oooo^ if Pinilil|IIi> 
If Ba mnsn W w mmnn , fk» 
J vli. t Ifct "BBTBH-TBIBIT.'* 

m t Minmm mj mtmwmfOt 

«h»ftr«lHf ■ 

«r Ati 



ia mnmty, M lU ■<• of 


•• - 100 « 

1000 - 





Wkw m4 hov «• Um7 U okaiMir 

n«y an fbr mh, M jMf, m4 m wii iaiml. V* 
•n M^TVmi rt ii , Natkoal Mid olkir Baak^ M h 

W Qmrnlim Wkoa b the iatamt pajfaUt, aad W« «n it U 

TIm Oa«p«M «r htcmt TUmU u« 4m 15lk 
if F«btMf7 Mid IStk tt Ah*** i* •Mk 7«'> •■< 
«n U Mrt aff fma tka aola, aad will ba wtliad bj 
aar Sab-Tiaaaartr, U. 8. Daponlory, Naiioaal ar atkar 
Baak ar Baakar. 

WkM aaal Ika OaactaataC paj aff tkaw T-Mif 

Tkcv aia daa ia tva ycaia aad a kalf Aaa Ika 
ISikarFaktwtf7,1805i m , aa Ika 16tk aC Aagart, 

Maal I laatlva baek aij aaaaj ■ aaaa ■ 1807? 

JV«/ Mt aabv joa joataalf Mafcr ta do ■»— 
Ika Uw givaa jo« tka rtglu ta danaad ftaai Ika 
OavaraiMat, at ikat tiae, titker yoar awacy ar aa 

Saal aaaaal, at mar, m tka ftanaa 
•90 OM btnrutg 9 fr taU. Lttm. 


Horn aiack do j9m ooondar tkb priTibft af aaa- 
Ttiaioa, iaia fr-20 Loia, la ba vwrtbf 

6-SOa kMriag GaM latciaM Aaai laloT HataB- 
\nt Bia, la dtj, vortk aar ecat. fmdaai. If 
Ikay ara vortk aa aari at tka aad af Ika twa jtan 
aad a kalf, wkea jm kava a fickt la tkaa. Ihaa 
Ibaj Mw aia, Mm pfasiaa added la Iba ialarHt 
yaa rtacm, will yiva jm at ka« 10 par kdI mt 
aaam fcr jtmt ■Macj— bat tha apiaba ia tut 
tkty win ba wortb Buia tbaa par cast, piaiaiaa 
at tVat ti»a. 


ITkat atkar adraaHf* b tkffa ia ia' 


Jaiwr. Tktjeaaaetka laxad bj Sutat, Gaaatiaa, ar Citba, 

aad tlua nvaa ia« twa la Iva par aaat. aa yoar ia> 
aa«a, aa all railroad aad atktr baada, aad ateeba, 
Aa^ Bta Uitd, aot aolj bjr tba Oarara- 
hj Sutea, Cuaatiaa aad Ciliaa. 

Ika ialaNal» aU b b adb aU 
Tbi flaiMawMl wJiMfc bi 


MM, aad datiaa aa iapaita, ftdljr ikna kaadaad m^ 
Ham oaak yaar. Abb aairip tkiaa tisaa aa ■■■& 

■ b aaadad la pay tka iataiaat aa all Ika ddkl; aai 

■ aooaailkawarb aadad,tka laioaat aal MiM 

la pay Ika 
Omr Goaorai 

Aaa iw<r« ^tf ^alf W dbH aai 
aaa aaai^ da aa a^iB. Tka iataraatbaarclBbafBid 
f ia« pUy , aad ika dakt bwlf b Ika iw j t Jm h i— 
■aal la tka world. It b ■ aaft aa a aaMgMa aa a 
faid htm, aad pap a kanar lalaaal. ll i% n iMl» 
• #ta M it f t m* aa all badi^ all laaaaMib idl laB* 

IfMkiag aaa ka albr, fbr wa an aB baasd ftr K 
aad aU Ikal wa kava b keM aad My baasd ftr Ika 
■ayaat af prfaaipal aad i a biaat Bawfcoiaklkm 
paapla aia wka kaap Idbk aad baktd ap^ ikab fild 
aad paaa b aa ba, or aatokaaa aNnoafai ar taiMad 
wkiak pqrMlyO ar • par aaak 
I Bavoa-nfalba BM (aaaaibigtka 
aa FlTa-Twaa t iai) a«or ID par aaat, aai 

M Q ml imk. Bow amiy Safaa-Tkiitic* ara Ikanik 

aab akoat tkiaa kaadrad aad 
aatkariaad by bw, aad aaiy abaal aaa 
kaadiod aad alaatj wrilliflBa laaHia aaaafa. 


t?a aiiObaa 

Baw iHf an te taka yaa la aaO Ika 
Tkara aia akoal 100 Nalbaal Baaka, aH ai«Md 
Ikaa; abaabrgaaaakaraf tkaaUkMo^ 

aad at 

aaa at laaai taiaa taaaaoac ar pnvala baatara aa4 
brakan, aad apaobl aawto wiD ba mmhI la al 
pani af tka aoaaliy w d bp oaiaa af ibM la Ika 

I 111 

tkiaa tkaaaoad af 


Baw hag irill b lako la aall tka wkoJaf 

la baa tkaa tkiaa Boatka tkay win ka al aaM. aad 
will, aa daakt, ikaa aaD at a praaiaama waa Ika oaaa 
wiik tka aU Bofoa-Tkiitiaa, tko in* Twaatf-Taar 
Laaa, aad tka fIra-Twaalba. 

iml Sabaoiiatba AaaM, ar a^y 
1 ta-aall Ika Laaa will ka gbd la 
I tko Set ea-Tkirtiaa la aaall ar 

Tka akata ^aaatbaa Mid aaawon, b b koKaaad, wlB ^ M 
iafenaatioa to d. If aal, Ika Oaaml 8abaoii| ' 
af tbo Btaka ar Baaktia aarabyad I 
aaowar ail aalieaa, aad ta faraiak 
brga aa«a (a«tka aotaa aia bmad ia da a oaiaalbaa af 050. tlOO^ 

•MO, 01000 aad l&OOOX Mid la laadw it «9 Ibr all la aahaariK 
tbaa fblfiHag tbo iaatraotioaa af Mr. FSaauDlK, wba o a rat^y d»> 
airaa tkat tka ptop/t of Ika wkab bad (aa wall aa Ika 
aksO koTO OToff opportaaity aStrdod tkoaa of abtaiai^g a | 
Tsia Moar DutaABL* laTMntniT. 

Lbt HON I DBiAT, SOT avBacun A« 
TIB vBABiaT asBfoaaiBU Vabk oa BAnna. 

tobBOrtptlOBa zvotlTml at oOoet of JAT OOOKS ft 00^ PHILADELPHIA and WABBXaOTOH, 

and bf BANKS and BANKBR8 throaghoot tba oofontrj. 



Henry Cooke in Washington, brought a letter from Sec- 
retary Chase to Jay Cooke who lent him about $8,000 
to be drawn as he needed it, through E. W. Clark and 
Company. Mr. Reid was now invited to assist in pub- 
lishing the praises of the seven-thirty loan. On Feb- 
ruary 6, 1865, Henry Cooke wrote from Washington, 
when he announced the engagement of Wilkeson: 
"Whitelaw Reid has also agreed to take hold, but I have 
concluded it best for him to see you before he makes a 
permanent arrangement. He proposes to go to Phil- 
adelphia on Saturday. At present he is writing some- 
thing about the 7-30S in all his letters and despatches, 
and is at work among the other correspondents. He pro- 
poses to enlist them all in the work. He will explain more 
fully when he sees you." But Mr. Reid did not accept 
the offer regularly to join Mr. Cooke's staff of writers, 
and Wilkeson directed the bureau which enthused the 
nation for the loan through the potent agencies of the 
press while subscriptions multiplied, and millions be- 
came hundreds of millions. The Constitutional Union 
newspaper called Jay Cooke the "Napoleon of Finance,'* 
and "Our Modern Midas." The mere publication of 
the fact that he was again the government's fiscal agent 
bred confidence and enthusiasm in the people, and the 
money was poured forth in a flood. "In these financial 

about the stock; draw on me for the amount you need and bring the 
stock along when you like.* The offer was so unexpected and so gen- 
erous that I instantly accepted it. . . . The draft was promptly cashed ; 
I made the purchase in Cincinnati, paying in full; put the certificate of 
shares in my pocket and when I was next in Philadelphia, some weeks 
later, turned them over to Mr. Cooke with a note for the amount he had 
advanced. This note was paid out of earnings within a year or two, and, 
with the signature mutilated, is now preserved among my papers in 
America as an interesting souvenir of a very generous act by a generous 
man." — Letter of Whitclaw Reid to the author, Nov. 10, 1905. 


days/' wrote some one in a journal styled The Neiv 
Yorker,^ "no name has a more metallic ring than that 
of Jay Cooke. Possessed of a peculiar talisman what- 
ever that powerful monetary hand touches it turns into 
government bonds. Whosoever takes note of these 
things, cannot but have observed the powerful pressure 
this great house brings to bear upon the market. When 
a government loan is to be disposed of to the best ad- 
vantage on the details of commissions, etc., they always 
adopt the most liberal, practical and productive terms. 
Their liberality in dealing opens the money drawers, 
chests and stockings of the whole country. Universal 
publicity is another of the instruments they work with. 
Every farmhouse, bank, hotel, counting room and back 
settlement hears of the loan. The result is, that from 
a state of languor it springs into intense activity."/ 

The Constitutional Union said : " "There is a sort of 
talismanic touch this intelligent and estimable gentleman 
possesses, which gives confidence, force and fervor to 
his official and business acts, while it inspires all \vho 
co-operate with him with the certainty of solidity, secur- 
ity and success in all he undertakes, spurring his co- 
laborers to industrious activity in the accomplishment 
of the end sought/' 

The response to Mr. Cooke's call was almost instant. 
On February 4, 1865, only four days after the agency 
was opened, Henry Cooke wrote: "Our deposits for 
subscriptions to-day wxre returned at $1,500,000, and 
so reported in the daily cash abstract to the Secretary. 
He was highly gratified and remarked, 'we beg^n to feel 

1 Feb. 5, 1865. 

2 March 3d. 


the new agency already/ " The newspapers announced 
that the subscriptions on February 6th, reached a total 
of $3,098,200; on the 7th, $3,098,200; on the 9th, $3,- 
546,000. Thus in the first week of the agency, the daily 
sales were equal to those for the best days during the 
progress of the 5-20 negotiation. On February 15th, 
the sales were $8,674,450; on the i8th, $5,082,000, 
orders being received for "a million in a minute" at one 
time during the day, a fact that was the text for a very 
widely copied paragraph. In the week ending Febru- 
ary i8th, subscriptions were 'taken for $26,520,200. 
The principal subscribers in New York for this week 
were Fisk and Hatch, $3,945,CXX); First National Bank, 
$2,500,000, and the Ninth National Bank, $1,630,150. 
The Department was so greatly surprised at the 
speed with which subscriptions were taken, that it 
did not have in hand enough notes or bonds, as 
they were being popularly but incorrectly denominated, 
with the coupons of February 15th attached to supply 
the wants of the buyers who sent in their orders prior 
to that date, and they must be provided for out of later 
issues, the government refunding the money, which was 
overpaid, by drafts on New York.^ Some of the totals 
for the last days of February, as given out to the news- 
papers by Jay Cooke, were as follows : 

February 20 $4,126,150 

" 21 ; 4,088,100 

" 23 6,256,800 

" 24 3,168,450 

" 25 9*502,650 

" 27 , 3437,850 

" 28 3,739*600 

1 H. D. C, Feb. 15 and 17. 


For the week ending February 25th, the sales were 
$27,142,150, and the machinery was being put in order 
for even greater achievements. Much was made of the 
fact that large numbers of the subscriptions were small 
and represented the savings of working men and 
women. On February 21st, there were 2816 individual 
subscriptions for $50 and $100 notes, and on February 
25th, 6581 different persons subscribed for the small 
notes. Wilkeson wrote in the New York Tribune on 
February 20th, in his vivid and hyperbolical style : 

While Congressmen debated on Thursday last the policy of re- 
stricting the issue of the new government bonds to sums not less 
than $100, and knocked back and forth the shuttle-cocks of ancient 
argument against and in favor of $50 bonds, the needlewomen 
of the northern and western villages, cities and towns, and the 
mechanics and apprentices of thrifty habits and patriotic faith 
stepped forward and settled the question authoritatively and in 
favor of both issues. Thirteen hundred and fifty of them carried 
their little earnings to Jay Cooke's agencies and bought $50 bonds, 
and 1800 of them bought $100 bonds. A telegram communicat- 
ing this precious fact to the proper committee in Washington 
was accepted as a decision of the point under discussion. The 
provision in the bill authorizing the issue of the small bond was 

The statement was made in the newspapers, and it 
was not far from the truth, that the troops had not 
been paid for five months, or since the preceding Aug- 
ust, barring the officers and soldiers on furlough.^ The 

* When Colonel William M. Stewart was in the South as a special agent 
for Jay Cooke for the sale of the loan he found that the soldiers in the 
armies in North Carolina " had been kept out of their pay and the in- 
terest on the debt due them for many months and in many cases for 
more than a year. I am quite at a loss " said he, " to explain to those I 
meet with, the causes of delay, especially as I learn from one of the pay- 
masters here that he has recently been instructed ' to use all possible 


money was now at hand, at least partially to meet 
Stanton's requisitions which had steadily accumulated, 
and the feeling in Washington, in all branches of the 
army, and in the financial centres of America and Eu- 
rope underwent a sensible improvement instantly. Mr. 
Fessenden supported Mr. Cooke and frankly stated that 
he depended upon him and him alone for the money re- 
quired for the prosecution of the war. On February 
8th, Henry Cooke wrote : 

I showed the Secretary the bunch of letters you sent me from 
Fisk and Hatch, L. Clews, the Boston East India party, etc. He 
was much pleased, said he knew we would succeed and that he 
saw we had gained all the newspapers. He is delighted with 
the reception given to the arrangement by the press. 

The large returns for February 15th, over eight 
million dollars, drew much attention to the agency. On 
February i6th, Henry Cooke wrote: 

The big subscription of yesterday is the " town talk." AH the 
bankers and half the senators and M. C.s in town have been in to 
ask what it all means, and everybody appears to be rejoiced at 
this wonderful success. The Secretary is delighted, but could 
hardly believe the subscriptions were so large. I explained to 
him that our agents were just getting to work, especially in the 
west, and we were now getting their first heavy orders for supply 
to keep for sale. He said he wasn't afraid now that there would 
be any lack of money to pay off the army. You ought to have 
this paying off the army announced as the first fruits of the 
agency system. 

It made the Secretary "open his eyes," Henry Cooke 
wrote in another letter. Jay Cooke sent to Washington 
a "muff box" filled with telegraphic despatches from 

economy in his disbursements as there is no prospect of present payment 
of Sherman's army or any portion of the North Carolina troops/" — 
Stewart to J. C, April 26, 1865. 


his agents ordering the bonds. They were shown to 
the Secretary, who was "astonished and appeared highly 
gratified, as were Harrington, General Spinner, etc. 
I have had them on exhibition all day, [February 
17th]" wrote Henry Cooke, "Judge Usher and a host 
of senators, M. C.s, newspaper men and others taking 
a good look at them." He kept the bundle over night, 
so that Huntington could "show it to Old Abe." 

Horace Greeley stopped at the Washington office to 
see the machinery in operation. On February 15th, 
Henry Cooke wrote : 

Horace Greeley came in to see us to-day and sat for over an 
hour. He was very curious to know how we got up the furore 
and I showed him our circulars, hand bills, advertisements, etc., 
etc., and explained the whole system to him, taking occasion to 
show the saving to the government by the fall in prices during the 
5-20 loan, and promising to do the same thing again. I also 
showed him how the success of this loan would appreciate green- 
backs and knock down gold, and how the continuance of the sub- 
scriptions to the amount of 7 or 800 millions beyond the present 
amount authorized might be made a means of funding part of the 
greenbacks now afloat. He asked a good many questions about 
this and I am sure got a full insight into the glorious workings 
and results of the popular agency system. He said at the close of 
our talk, " If you succeed, as you will, you will save the govern- 
ment at least half a million dollars a day in its purchases," and he 
promised the earnest and cordial aid and support of the Tribune 
in the good work. I was glad to have a chance to explain the 
subject to him in all its bearings. He is posted and will know how 
to defend the present policy, and to show why it should be con- 
tinued as long as the people will take the subscriptions. He says 
the present arrangement should be continued as long as the gov- 
ernment is a borrower. 

On February 28th, Henry Cooke wrote: "M. C.s 
and senators are pretty thick in our office every mom- 


ing before 12 m. They have caught the fever and are 
buying 7-30S with all their loose change. Have sold 
Brutus J. Clay over $35,000 in the last week." In 
March, Giief Justice Chase invested $20,000 in seven- 
thirties through Jay Cooke's Washington house. 

The Southern leaders also watched the financial sit- 
uation in the North very clpsely, and saw in Mr. Cooke's 
success the signs of their early ruin. On February 20th, 
the Richmond Examiner said: "The Federal govern- 
ment is now selling a large amount of what they call 
seven-thirty bonds, being hundred dollar bills bearing 
interest at two cents a day. Under the auspices of an 
eccentric financier named Jaye Cook, who has estab- 
lished agencies in all the large Federal cities and under 
the promise of ultimately commanding interest in gold 
which they hold out, these bonds are selling rapidly, and 
are pronounced a splendid financial success. . . . 
The efforts of the Yankees to sustain this explosive and 
inflated paper system, has so far been marked by great 
ingenuity, resolution and success. Whether they will 
succeed in conquering the South, depends in a great 
degree upon their continued success in upholding this 
paper system." 

Two matters were coming forward very intimately 
to affect Mr. Cooke's operations : the probable exhaust- 
ion of the loan pending the passage of a new loan bill — 
a hiatus to be bridged over by a further issue of five- 
twenties — ^and the retirement, now very imminent, of 
Secretary Fessenden. The law of June 30, 1864, it will 
be remembered, had authorized an issue of $200,000,- 
000 of long bonds and the same amount of seven-thirties. 
This relationship was changed by the supplementary act 


of January 28, 1865. Being now allowed to exercise 
his discretion, the Secretary took $100,000,000 out of the 
long bond account, thus limiting the new 5-20 issue to 
$100,000,000, and added it to the 7-30S to bring that 
emission up to $300,000,000. Mr. Fessenden had suc- 
ceeded in selling about $133,000,000 through the banks 
at various rates of commission, and Mr. Cooke had be- 
gun his agency with some $166,000,000 to be distributed. 
But the Secretary of the Treasury insisted upon re- 
serving "intact and unused $70,000,000 for legal tender 
issues hereafter (interest bearing or otherwise), if it 
should become necessary," ^ and the seven-thirties were 
going out so rapidly that on the last day of February, 
the showing was as follows : * 

Whole authority of issue $400,000,000 

Less 5-20 Bonds 100,000,000 

Less reserve for legal tenders 70,000,000 

Leaving for seven-thirties. $230,000,000 

Amount of 7-30S already issued 208,340,800 

Leaving $21,659,200 

A bill authorizing a further issue of $600,000,000 was 
pending in Congress, but there was risk of a gap of time 
in which Mr. Cooke would have no notes for his cus- 
tomers, and Mr. Fessenden would have nq revenues. 
It was certain that the new authority would not be re- 
ceived until the last hours of the session, which would 
close on March 3d. "The difficulty in the way of 

1 H. D. C, Feb. 20, 1865. 
*H. D. C, Feb. 28th. 


speedy legislation," said Henry Cooke/ **is that Stevens 
has a scheme of his own, and his bill is not even yet 
reix)rted to the House. The Senate will put it through 
quick, Sherman tells me, when it gets there, but the Sen- 
ate can do nothing till the House acts. Stevens will 
be beaten — is already beaten in the committee — ^but will 
fight it in the House." 

'^Sherman is our mainstay," he wrote again.^ "He 
says that any vagaries of the House will be corrected 
in the Senate. He'll attend to it." Again on March 
1st, Henry Cooke wrote: "The Secretary has eleven 
bills before the House, all of which have been more or 
less bewitched by amendments which he is getting back 
straight again. They finally got through the loan bill 
last evening without material change. Sherman prom- 
ises to put it through the Senate when it gets there 'on 
the double quick.' " 

So certain was the result, that the Treasurv officers 
were inserting the date, March 3d, and were wetting 
and pressing the paper ready for the printers.^ 

The Secretary on his side, although much pleased 
and surprised at the great sales, needed still vaster 
sums. The Treasury with the amount already due, and 
to become due in March, was insatiable. The Jay 
Cooke agency was no sooner established, than Mr. Fes- 
senden began to cast about him for a way to sell long 
bonds, either 5-20S or 10-40S, and he made some in- 
quiries to that end in New York. The rumor coming 
to Jay Cooke's ears, he protested against such action in 
vigorous terms. On February 8th, Henry Cooke 
wrote : 

1 Feb. 20th. « Feb. 28th. ^Ihid. 


Your despatch about Stewart's proposed negotiations received 
and answered. I took the despatch to the Secretary and let him 
read it, as you put the case better and stronger than I could do. 
He received it very kindly (although it was rather peremptory) 
and replied very cordially : " Assure your brother that I don't 
intend to interfere with his plans in the slightest degree and that 
nothing shall be done against his advice. I look to him in all 
my arrangements to get money. I expect him to furnish it and 
I won't interfere with him in any way. I told him what my 
necessities were and would be about the first of March and I want 
him to help me meet them. Tell him distinctly that I shall con- 
sult him in everything." He added that he had talked with Mr. 
Stewart just as he had with you in regard to the present and 
coming demands for money, and that the proposal to sell some 
bonds and hypothecate some 7-30S was merely a thing talked of. 
Stewart thought the thing could be done and said he would in- 
quire about it when he returned. The Secretary seeing that such 
a movement would interfere with you, told Stewart to consult 
with you and to do nothing except as you should advise. Fear- 
ing from your despatch that Stewart might be making inquiries in 
New York and that these inquiries might create the impression 
that the Secretary was not going to rely solely on the 7-30 
agency, I suggested that he should be cautioned against doing so. 
Accordingly the Secretary sent a despatch to him to " do nothing 
in regard to either of the subjects of our conference here. I 
write." The letter will be in accordance with what I have written 
above and in that spirit. 

The next day, February 9th, Henry Cooke made this 
report to his brother, continuing the account of his con- 
versations with Secretary Fessenden: 

Your letters and telegrams had due attention. I read them to 
Sherman who agrees in foto with you in your letter to the Secre- 
tary. Mr. Fessenden also after reading your letter said you were 
right and that nothing should be done to interfere with your 
plans and without your assent and co-operation. I suggested that 
he had better instruct Stewart to do nothing that you did not 


assent to beforehand and that, if now or hereafter, he should 
find himself so placed as to require any special or temporary ad- 
vance of money he should let you manage it so that it would 
not appear that you and the Department were acting indepen- 
dently of each other. I told him you and Stewart would of 
course advise together and that doubtless Stewart could be very 
useful in helping you to carry out your plans by co-operating with 
you. But that if he attempted to act independently of you it 
would throw everything into confusion. He assented to all this 
— read me his letter to Stewart of last evening, which I thought 
left too much latitude to S. and at my suggestion telegraphed to 
him again to do nothing. He is, however, very anxious that 
you should devise some way to raise money for the soldiers. He 
says the clamor is terrible and he asked me to urge you to confer 
freely and fully with Stewart in reference to this. He asked if 
you couldn't go over to N. Y. to-morrow evening to see Stewart 
and arrange all your plans with S. so that he should make no 
mistakes. In short he puts the whole thing of raising money into 
your hands and wants you to take charge of Stewart so as to 
make him useful to you instead of a marplot. I strongly advise 
you to go or S. may get restless under these repeated peremptory 
telegrams from the Secretary at your instance. 

Mr. Cooke had had experience enough of sales made 
tactlessly by New York brokers. Efforts were put 
forth to dissuade the Secretary from the issue of any 
government security except the seven-thirties. On 
February 20th, Henry Cooke had two long interviews 
with Mr. Fessenden with this object in view. They 
were wholly w^ithout effect, for he must have, he said, 
$23,000,000 in addition to the amount returned by the 
agency. This sum was immediately "indispensable" to 
the Treasury, that he might pay the troops and meet 
certain pressing demands. His only concession was 
that the sales should be made by Mr. Cooke to obviate 
untoward results. For this service Henry Cooke asked 


one-fourth, but the Secretary fixed the commission at 

I told the Secretary, [wrote Henry Cooke *] that the com- 
mission was too small altogether. He said he didn't feel author- 
ized to pay us more than our commissions to regular corre- 
spondents for the same services. I represented the difference in 
these sales, the great care, skill and command of market required 
to make them successful and keep them private to which he re- 
joined that it was part of our general business for the govern- 
ment, and the amount was large, so it paid us well in the ag- 
gregate. I contested every inch of this point but he was firm and 
T thought it best to yield, especially as I succeeded in getting 
him to assent to a stoppage of the sales at any time when we 
showed him that it was injuriously affecting the market. This 
virtually leaves the matter in our hands to sell as much or as 
little as we choose. 

The pace set for Mr. Cooke in Washington, was 
about one million of the 5-20S daily, and the usual aver- 
age of 25 to 30 millions a week from the sales of 7-30S, a 
business it will be readily admitted of uncommon mag- 
nitude, as well as of vast responsibility.^ 

Not only in the Treasury Department was Mr. Cooke 
looked to as the source of all things necessary; on the 
battle-field too, the importance of the service was fully 
understood. On March 9th, General J. K. Moorhead 
had the steamer River Queen placed at his disposal 
by the Secretary of War. He was to go with his 
daughters to Fortress Monroe, and he invited Mrs. Jay 
Cooke and her children, and Mr. and Mrs. Pitt Cooke, 
all then in Washington, to accompany them. It was 
upon this trip that Jay Cooke, Jr., met General Grant. 
Before leaving Washington, thinking it probable that 

1 Feb. 20, 1865. 2 H. D. C, March i. 


he would see the general while in Virginia, he tele- 
graphed his father, asking if there were any message 
which he had to convey to the commander. Jay Cooke 
replied: "Tell the general to push the fighting. We 
will supply all the money that is needed.'' Jay Cooke, 
Jr., has written this account of what ensued: 

After visiting Fortress Monroe, Norfolk, Portsmouth and the 
other points of interest at the mouth of the Chesapeake and James 
River we started in the evening for City Point. We arrived 
at the wharf about five o'clock in the morning and as was my 
habit in those days when going to new places, especially one of 
so much interest I was up as soon as we arrived and went down 
to the main deck. While walking backwards and forwards by the 
gangway watching all the movements around me, I saw coming 
down the wharf a man dressed in plain military costume without 
military insignia. The sentry saluted as he passed and as he 
arrived opposite the gangway of the steamer I stepped forward 
and was greeted with the remark : " What party is this ? " I 
replied, " A party with General J. K. Moorhead," whereupon my 
interlocutor expressed a desire to see General Moorhead. I re- 
marked that it was a little early in the morning, but asking his 
name was told that it was General Grant. I invited him on 
board immediately. We went into the main saloon of the 
steamer, I going at once to tell all the members of the party who 
was waiting to see them. I returned then to the general and we 
entered into conversation. I gave him my father's message. He 
seemed gratified and in a moment replied : " Mr. Cooke, when 
you return tell your father I appreciate his message and his 
services. Tell him that he is doing more than all the generals in 
the army ; for without his aid we could not do any fighting." 

The party so long as it remained received much kindly 
attention from the Commander-in-Chief. He not only 
entertained the visitors very pleasantly at his headquar- 
ters, but sent with them to the front on a special train, 
his young aide, Robert T, Lincoln. 


The change in tlie secretaryship was soon to be 
eflfected. Already on February 8th, Henry Cooke was 
able to write: "Secretary Fessenden (in confidence), 
sent in his resignation yesterday evening, to take effect 
March 3d, or sooner, if the President so desires. The 
successorship narrows down to McCulloch and Morgan. 
The friends of each are equally confident, but Mr. Fes- 
senden thinks the former has the best chance. On the 
other hand, a party likely to be reliably informed told 
me last evening, that Morgan would certainly be the 
man. So we go." On February 23d, "everybody" 
said that McCulloch w^as to be the next Secretary, but 
Henry Cooke had a "lingering doubt.'' He did not 
know why, perhaps because of a "dread of seeing our 
finances i)ass under the control of such timid, weak, 
nerveless hands." "If it is to be so," he continued, "we 
must make the best of it." On March ist, he was still 
repining for Sherman, whom he considered by far the 
soundest and strongest of all our political men. On 
that day, too, he definitely announced that McCulloch 
would go into the Treasury on the 4th instant, and 
urged his brother to come to Washington to talk with 
the appointee, before he should enter office. "As your 
relations to the Department are of a peculiar character," 
Henry Cooke continued, "perhaps he expects it He 
expresses great satisfaction at our success and anxiety 
that it may continue. This satisfies us, that he has no 
idea of making any change." Huntington, after con- 
ferring with McCulloch, wrote that Jay Cooke need not 
come until later, when the new Secretary would better 
know the needs of the Department. He wished to clear 
it of "the load of suspended debt," wrote Himtington, 



and he intended ''to lean" upon Jay Cooke "almost al- 
together." * 

Mr. Cooke's influences were now freely used to create 
an impression upon the popular mind favorable to Mc- 
CuUoch,^ and he was the subject of many compliments in 
the press which deeply gratified him. 

The passage of the new loan bill made it feasible to 
sell the $70,000,000 which Mr. Fessenden had reserved, 
and increased the total issue of the First Series of 7-30S 
to $300,000,000. The orders were so large, that on 
March 6th, the Treasury "ran ashore," ' and there was 
a delay in the delivery of the notes, although the en- 
gravers and printers were working night and day upon 
them. On March 4th, the subscriptions had been $4,- 
130,000; on the 9th and loth, they exceeded $4,000,000 
daily. On the 13th, they were $5,246,700; on the 14th, 
$5,127,250; on the 15th, $5,084,250, and on the i6th 
$4,032,550. After this date, they for a time declined 
because of a disastrous panic in the stock market. 

It was now becoming very evident that the war was 
near its end, and the prices of gold, gold-bearing stocks, 
and with them nearly everything else, including cotton 
and the staples of the produce markets, fell rapidly. On 
March i6th, Henry Cooke wrote: "We are all in snug 
shape, both up stairs and down stairs, and ready for 
any kind of a blow. Gold will tumble still more I think. 
Confidentially I have it from the highest authority, that 
information perfectly authentic and reliable is in the 
hands of our government that General Lee has caved 
in. He has informed JeflF Davis, that with the force at 

1 Hunt, to J. C, March 3. 

2H. D. C, March 7. 

»H. D. C to J. C, March 6. 


his command, and with his commimications and sup- 
plies cut off, it will be impossible for him to resist the 
gigantic combination of the Federal armies now con- 
verging against him, and that to attempt to prolong the 
struggle will involve an inevitable and useless waste of 
blood and treasure. This is reliable." 

On March 20th, he continued: "The news sent you 
Friday about the demoralization and tumbling to pieces 
of inside rebeldom is confirmed to-day. Stanton told 
a friend that the whole thing would be wound up in a 
few weeks, that Lee would have to make terms or be 
overwhelmingly whipped within ten days." This feel- 
ing naturally disturbed the markets vitally. As usual 
the burden of blame was placed upon the shoulders of 
the disloyal New York speculators, and they may have 
made a last desperate effort to ruin the credit of the 
government. The New York Tribune called it, "a 
combination of immensely wealthy Wall Street owners 
of gold ;" ^ the Philadelphia Press said the movement 
was in the hands of "the most prominent gold gamblers 
and operators of Secesh proclivities." "One of the 
parties to this scheme of destroying faith in government 
bonds," said the New York Commercial Advertiser,'^ 
"has been using his reputation for shrewdness in visit- 
ing bank parlors and insurance offices for the purpose 
of persuading large holders to sell out their govern- 
ments, assuring them that they will soon be able to buy 
them cheaper." Many untruths damaging to the mar- 
ket were industriously circulated, the 7-30 loan suffered 
in the general melting away of the premium on older 

1 March 29th. 

2 See Phila. Inquirer, March 29th. 


issues of "governments'* and the Secretary of the Treas- 
ury, as well as his fiscal agent, was aroused to the need 
of bold action. 

The ten-forties led in the decline and made them- 
selves a particularly disturbing factor. They were 
"never well placed," wrote Mr. Cooke's friend Craw- 
ford of Clark, Dodge and Company, and they became 
"the most damaging thing to the whole market." They 
"knocked down all the other bonds much more than 
they would have otherwise fallen," their price at one 
time sinking to about 90. 

Mr. Cooke lost no time in going about a business in 
which he had made himself a past-master in earlier 
crises in Wall Street. On March 21st, Henry Cooke 
wrote to his brother who had already gone to New York 
as follows: 

I received your first despatch, foreshadowing a combination of 
gold bulls to depress governments and asking for authority to use 
a few gypsies ^ at a quarter after six o'clock last evening, just as 
I was about to start home. I went at once to see the Secre- 
tary and read him your despatch. His reply was for you to 
consult with Stewart at New York and do as you thought best. 
While writing you the despatch sent last evening to that effect I 
received a second one from Fahnestock asking me to meet him at 
the printing telegraph office. Taking Huntington with me we 
were greatly disappointed to find that we could send no message 
by printing telegraph wire, so I sent Fahny despatch by the other 
line which they said would be from two to three hours getting to 
Philadelphia. The difficulty for the past two or three days with 
the telegraph is that the cable across the Susquehanna is broken 
and messages have to be sent across the river in small boats and 
repeated. This takes an average of about 2^ hours. This 
morning I was over at office early (before 9 o'clock), got Fahne- 

* A gypsey was $500,000. 


stock's letter (written after you left for New York), giving in 
full your programme to arrest decline in governments, took it 
over to the Secretary and got his consent for you to pitch in 
and buy for government account and immediately telegraphed you 
(before ten o'clock) that you were authorized to go ahead. About 
one o'clock Vermilye got here (4 hours behind time) and handed 
me your letter from New York. We went together to see the 
Secretary and I read him your letter from New York and Mr. V. 
explained to him the state of things there and gave an account 
of your meeting there last night. The effect of the interview 
was to stiffen Mr. McC. in the arrangement made with me in the 
morning. Mr. Harrington was present at the interview and he 
at once told him to order that the Ninth National and the First 
National of N. Y. be not drawn on till April ist. Harrington 
also stopped instanter a pile of requisitions on which warrants for 
money had been drawn, and you can depend upon every possible 
forbearance of the Treasury during the next week in its drafts on 
depository banks at the financial centres. In regard to the pur- 
chase of 5-20S and other governments Harrington will write you 
fully by to-day's mail. The understanding is that all purchases be 
made through you. The Department has nothing to do with your 
sub-agents. It looks only to you. Two millions of 1. t.s. [legal 
tenders] go to-day to Stewart and more will follow for you to use 
in your purchases. I am sure that everything is arranged to 
your entire satisfaction. Mr. McCulloch is anxious that the mat- 
ter should be arranged as quietly as possible and you will have 
to caution your agents to keep their transactions free from pos- 
sibility of the imputation that government is doing anything. 

The official paper authorizing Mr. Cooke to act for 
the government in this emergency, signed by Secretary 
McCulloch, was as follow^s: 

Treasury Department, 

March 21, 1865. 
Sir: — In order to arrest the further decline of government 
securities which under what appears to be a panic, caused by the 
rapid depreciation in the price of coin, threatens to derange the 



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financial plans of this Department by stopping the subscriptions 
to the seven-thirties I hereby authorize you to purchase five-twenty 
and ten-forty bonds and seven-thirty notes in such proportions, 
not exceeding in the aggregate ten millions of dollars as after 
conference with the Asst. Treasurer at New York may be deemed 
necessary, not only to check the decline but to restore their value 
nearly to the range prevailing for those securities for the last few 
months. I have authorize 1 the Asst. Treasurer to redeem from 
you such an amount of these securities as you may wish to have 
so redeemed upon an invoice being presented to him therefor at 
the rates which you may have been compelled to pay for them to 
an aggregate amount not exceeding ten millions of dollars. 

You will use the utmost discretion in making these purchases 
and it is expected that, through the earnest co-operation of such 
of your several agents in New York as you may confide this 
matter to, the objects in view may be accomplished without the 
expenditure of the whole sum thus authorized. I have advised 
the Asst. Treasurer that you will be in New York to confer with 
him upon the subject matter of this letter and I doubt not he 
will cordially co-operate with you in averting the ill consequences 
which must necessarily follow a further continued decline of the 
government securities. The utmost caution must be observed to 
prevent the fact of the government agency in this matter being 
known to the public. Two millions in currency will be trans- 
mitted to New York by this evening's express and other amounts 
will follow as may be necessary. 

You will keep me informed daily by mail of your action in the 
premises, and by telegraph so far as may be, and by quotations 
through your house in this city of the condition of affairs. 

I am very respectfully, 

Secretary of the Treasury. 

Mr. Stewart and Mr. Cooke do not seem to have been 
in complete agreement as to the best method of accom- 
plishing the object which both had in view. Stewart 
would have bought gold while Cooke was directly in- 



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terested in the bond market. Mr. Stewart wrote Mr. 
Cooke as follows: 

United States Treasury, 
New York, March 22, '65. 
Dear Sir — I enclose letter received this morning from Wash- 
ington addressed to you. To act in the matter of purchasing 
bonds through five or six sub-agents would in my humble judg- 
ment be a mistake. I sent for Mr. Crawford only and told him 
I was prepared to co-operate in carrying out your instructions. I 
don't believe it will do any good for us to invest ten millions in 
governments, as proposed, because the brokers will simply un- 
load upon us. The only way to effectually reach the root of the 
evil is to revive the gold market and thereby give tone to other 
things. Governments will at once sympathize. I telegraph you 
to come to New York because I wish to communicate some mat- 
ters which I cannot write about. 

Truly yours, 
John A. Stewart. 

Fisk and Hatch wrote on the same subject on March 
2 1 St as follows 

Your telegram received about the 10 gypsies. Glad it is ar- 
ranged. If the power is judiciously used it cannot fail to4iave 
a good effect on the market and help sales of 7-30S. We called 
on Mr. Stewart as he requested this p. m. He awaits your let- 
ter, and of course was not prepared to say much till he received 
it. He seemed to think that the true policy of the government 
just now was to sustain gold, but promised to do what he could 
to make the plan adopted effective. The gentler^en who took 
the matter of last night's arrangement in hand at tlie board this 
morning (L. C. & Co., V. & Co. and C. D. & Co.), represent that 
the pressure was so sudden and so great, that it was useless to 
attempt to check it there. Immediately after board, we all com- 
menced bidding in the street, each on his account, and declined 
to sell except at large advance on quotations. The rally was 
so quick that but few bonds could be got at the extreme low 
rates. The pressure at the board was so sharp and excessive, 


that it exhausted itself, and under our prompt bidding and re- 
fusals to sell the feeling turned very suddenly. If your action 
under the authority of the Secretary follows this right up, we 
believe that all that is desired can be accomplished, and govern- 
ments sustained in spite of gold. We trust you have got the 
matter so arranged with the Secretary, that you can work it in 
your own way and not have to leave it to Stewart who, however 
good his intentions may be, can't arrange such a thing half as 
well as you can. 

The movement was instantly effective. Some houses 
which had sold "short" were forced to close their doors, 
and the market soon resumed a more natural course. 
The Secretary of the Treasury who told Henry Cooke 
that he "felt safer" when his brother was in New York, 
was "very much pleased at the prompt result." * On 
March 22d, he wrote to Mr. Cooke, thinking that he 
had perhaps allowed too much latitude to his agent: 

You will bear in mind that my motive in authorizing the pur- 
chase of government securities, is to clear the way for the sale 
of the 7 3-10 notes. You will not therefore purchase bonds 
unless it be necessary to so raise their prices in the market that 
they will not be a more desirable investment than the notes. My 
only motive in purchasing for government account, is to enable 
you to go on with the sales of the 7 3-10 notes, and I do not 
desire to purchase a single bond after this object is accomplished ; 
or with any other view than to its accomplishment. 

Again on March 24th, McCuUoch wrote to Mr. 

Your two favors of the 23d inst. are received. I thank you 
for keeping me so fully posted in regard to the condition of 
things in New York. I shall be governed in my action a good 
deal by the advices which I shall receive from yourself and Mr. 
Stewart. At all events I shall be so governed as long as you 

* H. D. C, March 22. 


keep cool. . . . Write often and believe me, truly yours., 

Mr. Cooke personally watched the situation and di- 
rected the movements of the market in New York for 
several days. He wrote his brother Henry, on March 
27th : 

I wouldn't spend another week of such pressure for a great 
deal, but it hasn't hurt me. I feel fine to-day as we succeeded 
in flooring those fellows completely. 

On March 31st, Fisk and Hatch wrote Jay Cooke, as 
follows : 

The plan for sustaining the market for government securities 
has worked admirably so far and probably with a much less 
amount taken for your account than might have been expected. 
Wq believe it is only necessary to keep it up long enough to 
bridge over the interval till we have time to get the higher 
European quotations which will follow the receipt there of the 
intelligence of falling gold and our continued successes, when 
we believe the large foreign demand will put new life into the 
market and materially advance prices. As this time is now ap- 
proaching, and is not very far off, it has occurred to us that as the 
market has been kept steady at about present prices for so long, 
it would be well to let it advance a little now gradually ; not by 
any attempt to put it up suddenly two or three per cent, to fall 
off again, but a little at a time by advancing our bidding % a 
day or so. We believe that this would be a healthy action and 
that under it you would get fewer bonds than you are doing now. 
And for this reason: When holders see the market gradually 
and healthily advancing they will feel reassured as to the danger 
of their going lower and will be in no haste to sell, but hold off 
for higher rates; while parties proposing to buy will cease to 
wait for lower figures and hasten to buy before the price gets up. 
It is proverbial that everybody wants to sell on a falling market 
and to buy on a rising one. Such is human nature. We merely 
throw out the suggestion for what it is worth. We feel quite 


sure that you would get fewer bonds on a gradually advancing 
market and that the subscriptions to the 7-30 loan would be 
greatly stimulated with the gold-bearing bonds steadily creeping 
up in price. 

Mr. Cooke's editors about this time sent out the edi- 
torial "Babylon has Fallen," which was so widely used 
This article closed as follows : 

"Jay Cooke, as well as General Sherman, is knocking 
the heels of the speculators from imder them. The 
modern Babylon, the rebellion and high prices, are 
tumbling down together. Citizens, put forth your ef- 
forts, take the loan. It is safe. Keep the rebels and 
speculators down. You will thus subserve the cause of 
humanity and your own interest, and cause thousands to 
rejoice and be glad." 

Mr. Cooke's organization did not flinch. "One thing 
is certain," wrote Fisk and Hatch on April 8th ; "any ar- 
rangement or combination of whatever kind to break 
down government securities, must prove utterly power- 
less and futile, so long as the present arrangement is 
maintained, and can only result in discomfiture and loss 
to those who attempt it. Only keep your present power 
over the market, and the more bonds they sell short, the 
worse off they will be and the easier it will be to sus- 
tain the market against them." 

The story generally circulated that the government 
was buying gold as well as bonds, if founded in fact, 
does not seem to have been based upon any action of Mr. 
Cooke or his agents, who to all appearances left the coin 
market to pursue its natural course. "Adventurers and 
gamblers who are short and disappointed because every- 
thing does not tumble to eternal ruin to their profit," 


wrote Fisk and Hatch to Jay Cooke, "guess at all sorts 
of reasons why gold does not fall more and among other 
things g^ess that government is sustaining the price. 
Let it be borne in mind that the men who are so clam- 
orous for gold to tumble, are the very men who grew fat 
on the misfortunes of the country when gold was rising, 
and who did their utmost to force it up to the ruinous 
premium that it once reached. . . . Unprincipled 
speculators clamor for a fall and a few well-meaning 
people of the Greeley sort who are theorists and not 
practical business men go it blind and pray for gold to 
go to par to-morrow without regard to consequences; 
but the government may consider it certain that all true 
thinking and considerate patriots want to see things 
steady and the decline in gold from 150 very gradual." * 
In the meantime the seven-thirties were being sold by 
Mr. Cooke at the reduced rate of about two or three mil- 
lions daily, but so uninterruptedly in spite of all dis- 
turbing influences in the money markets that on March 
27th practically all the first issue of 300 millions was 
distributed. The manner in which it was sold before 
and after the establishment of the agency was impres- 
sively contrasted by the Philadelphia Inquirer : * "From 
August 15, 1864 to February i, 1865 (169 days) the 
amount of the First Series of the seven-thirty loan sold 
under the direct supervision of the Secretary of the 
Treasury was $133,000,000, or at the daily average of 
about $771,000. From February ist to March 27th, 
1865 (S5 days), under the management of Jay Cooke, 
General Subscription Agent, the sales of the loan reached 

1 To J. C, April 8th. 

2 April 3. 


$167,000,000 or a daily average rate of $3,036,363." 
There was no delay in passing to the new issue of 
$530,000,000 under the $600,000,000 act of March 3, 
1865, the reserve of $70,000,000 being carried over and 
deducted from the amount authorized by the new law. 

On March 14th Jay Cooke was holding a "council of 
war'' with Secretary McCuUoch, "determining a plan of 
campaign for the new loan," ^ and the result was the is- 
sue of a Second Series of $300,000,000. On March i8tli 
Mr. Cooke announced the result of his conference to his 
various sub-agents in the following circular : 

Dear Sir — Of the present series of 300 millions 7 3-10 Treas- 
ury notes only about twenty-five millions of dollars remain unsold 
and these will doubtless be disposed of before the close of the 
present month. 

In availing himself of the provisions of the new loan bill Secre- 
tary McCulloch has decided upon the issue through this agency 
of a second series of $300,000,000 7 3-10 notes, payable in three 
years from the fifteenth day of June next and also convertible at 
maturity into five-twenty gold bearing bonds. 

There will therefore be no interruption of your agency, the 
present popular system of distributing the notes being continued, 
and your earnest and most energetic efforts are desired to secure 
for the government the benefit of all the surplus capital within 
your influence, and to secure for the people whether possessed 
of large or small sums the advantage of this most desirable in- 

Any subscriptions for 7 3-10 notes received at this office after 
the present series shall have been exhausted will be filled with the 
new issue (the interest to the 15th day of June being paid you 
in advance) which will be of equal value and similar in all re- 
spects, excepting date of maturity. Very respectfully, 

Jay Cooke, 
Subscription Agent. 

1 H. D. C to Sexton, Mch. 14, 1865. 


This circular was followed by another on March 27th 
as follows: 

Dear Sir : — Before this reaches you the subscriptions will have 
absorbed the First Series of 7 3-10 Notes. 

Please therefore make your certificates and remittances here- 
after as per circular instructions under date 25th instant, deduct- 
ing interest to June 15th. 

There will be no interruption in the delivery of the notes. 
I am of opinion the new notes having only ten months longer 
to run and interest to 15th June being prepaid are fully equal in 
value to those of the First Series. 

Should an early resumption of specie payments take place they 
will of course be more valuable. 


Jay Cooke, 
Subscription Agent. 

The question of a commission for the service was of 
course the subject of much discussion and negotiation. 
It will be remembered that under the original arrange- 
ment with Mr. Fessenden on January 28th Jay Cooke 
was to receive three-fourths of one per cent, on the first 
$50,000,000 of seven-thirty notes sold and five-eighths 
on the next fifty millions, the agent's compensa- 
tion for subsequent sales being committed to future 
determination. On February 27th Mr. Cooke received 
$375,000, the gross commission on the first fifty millions 
and on March 13th he wrote to Mr. McCulloch regard- 
ing later payments : 

Since the sale of the first fifty millions of seven-thirties my al- 
lowance has been decreased to five-eighths of one per cent., a 
sum entirely insufficient if I am to continue the present allow- 
ances to sub-agents of three-eighths per cent, and one-half per 
cent, and the vast system of travelling agencies, advertising, etc., 
etc., — that is, unless I expend all I receive from the government. 


I could, I think, with an allowance of three-fourths per cent on 
all sales continue all my present arrangements, which I think ex- 
ceedingly desirable, without change. I could and would take 
the risks of a still larger expenditure for adyertising" and the 
emplo3rment of the best talent in the various branches of the 
agency, thus making "assurance doubly sure/' If, therefore, you 
will agree that the allowance of three-fourths of one per cent 
shall continue from the start, provided the total sales reach one 
hundred millions per month, I will endeavor to secure that sum 
to the Treasury and will at once make expensive exertions as 
well as maintain all present allowances. If I do not succeed in 
my eflforts I will only expect or claim the present scale of allow- 

I sincerely trust that you will give me the means of carrying 
on this great work as effectively as possible. For my own part 
I shall try to succeed, even under present disadvantages, and 
would not make this proposal but that I think it my duty to sub- 
mit it to your consideration. Most truly yours. 

Jay Cooke, 
Subscription Agent. 

This plea does not seem to have been granted and the 
discussion centered about the commission to be paid on 
the new series of notes. On March i8th Henry Cooke 
wrote his brother: 

I telegraphed you this morning that the Secretary had agreed 
to allow you in addition to the ^ per cent, commission an addi- 
tional commission of 1-16 upon the whole of the new series, viz., 
530 millions. This was after a full and free discussion with him 
this morning and is conditioned upon your keeping up the sales 
to 100 millions per month. A memorandum of our verbal under^ 
standing was taken down and instructions were given to prepare 
the necessary docs. Harrington said he would get them oflF to- 
day if possible, but they should certainly go Monday, and Mr. 
McC. said that meanwhile you could go ahead. Before settling 
down upon the 1-16 % commission additional I hung on for the 
full ^, but the Secretary said he had studied the matter care- 

• ^ * • 



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fully, that an increase of yi over your present commission would 
give you $662,500, and he had concluded that half of that sum, 
$331,250, was a liberal allowance to cover the extra expenditure 
which you proposed, espettally as it involved no increase in the 
rate of commissions paid by you. Against this I urged that 
after the certificates of indebtedness were taken up and the float- 
ing vouchers and suspended requisitions paid, etc., the govern- 
ment wouldn't want the 100 millions per month and it would 
be impossible to continue at that rate to the end of the loan be- 
cause the government disbursements would cease in a great 
measure, contraction in money markets would fallow, and sub- 
scriptions fall off, etc. But he considered the additional 1-16 a 
liberal concession and of course we couldn't refuse it. 

The panic in the stock and bond markets prevented 
the execution of this contract and Mr. Cooke's services 
in Wall Street had been so valuable, while the subscrip- 
tions for the seven-thirty notes had so sensibly dimin- 
ished, that the Secretary on March 30th wrote Jay 
Cooke as follows : 

Dear Sir — I have considered the proposition contained in your 
letter of the 15th inst. called forth by my oral statements to you 
that the demands upon the Treasury would require at least three 
hundred millions of dollars ($300,000,000) by the loth of July 
next in addition to receipts from internal revenue and miscel- 
laneous sources. 

You propose to furnish from the sale of 7 3-10 notes bearinjj 
date the 15th of June next, this amount, provided the Depart- 
ment will allow you as a commission three- fourths (^) of one 
per cent on the whole amount of such sales. 

You claim that it will be necessary for you to allow one-half 
(J4) per cent, commission to your general agents and that the 
expenses of travelling agents, advertising, printing, distributing 
circulars, canvassing, etc., under the arrangements which it will 
be necessary for you to make in order to dispose of so large 
an amount of notes within the time named will require at least 











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. I 




; an additonal expenditure on your part of one-eighth (}i) per 

• cent. 

I am willing and hereby agree to allow three-fourths (^) of 
one per cent, commission on the first one hundred millions ( loo,- 
000,000) of notes which you shall dispose of under this arrange- 
ment, and will continue to pay you the same rate of commission 
on the remaining two hundred millions (200,000,000), provided 
the whole amount of three hundred millions of dollars ($300,- 

I 000,000) as aforesaid shall be subscribed for and paid into the 
Treasury by the loth of July next. 

I am very respectfully, 


Secretary of the Treasury.^ 

Mr. McCuUoch was in a rather desperate frame of 
mind. He told Henry Cooke, "in his peculiar way," 
that he felt he was officially "the poorest clog in exist- 
ence! Duns, duns, duns from every quarter! Hurry 
up the sales." 

Meanwhile the Secretary was concerning himself in 
regard to a foreign loan. By this time considerable 
quantities of United States bonds had found their way 
abroad, although practically none had been sold di- 
rectly in the European markets. It was stated in March, 
1865,^ that 200 millions of the Northern war loans were 
held in Germany and upwards of icx) millions in Eng- 
land "with a demand so rapidly increasing not only in 
these countries but in other parts of Europe that it is 
expected before long the aggregate total will exceed 500 
millions." It is likely that this writer did not speak by 
the card, but Frederick Kiihne, of the New York inter- 

^ It is very likely that this agreement was dated back, as the matter 
was evidently not settled on April 11, 12 and 17, when Henry Cooke 
wrote letters to his brother, telling of the progress of the negotiation. 

2 Philadelphia Bulletin, March 29, 1865. 


national house of Knauth, Nachod and Kiihne, placed 
the amount even higher, at 320 millions. He wrote Sec- 
retary McCuUoch on March 30, 1865: 

Being engaged in the foreign exchange business I have from 
motives of interest as well as from inclination given g^reat and 
minute attention to the subject of our national finances, and have 
had the pleasure to have seen well entertained by Governor 
Chase, when Secretary of the Treasury, whatever communica- 
tions I have made to him on this topic. I therefore take the lib- 
erty of addressing you on a matter which I deem worthy of your 
immediate attention. It is pretty well conceded by even the 
lowest estimates that 250 millions 5-20 bonds old issue, have been 
placed in Germany and Holland and there can hardly be less than 
320 millions of all kinds of U. S. bonds in Europe at this time. 
It is less known, however, that a considerable amount of these 
securities, say about 100 millions, has not been taken as an in- 
vestment, but is held for speculation and kept afloat on the 
bourses of Frankfort, Amsterdam, Berlin and London. What a 
danger there lurks for our market here in that 100 millions of 
U. S. bonds floating on the bourses of Frankfort, Amsterdam, 
etc.! . . . The American government should engage an 
agent in Frankfort among the old established houses there to take 
care of the interests of its bonds. Through proper steps these 
bonds should at once be introduced as bankable collaterals in all 
banking institutions at money centres in Berlin, Frankfort and 
Amsterdam and the necessary measures should be authorized by 
you for keeping the quotations abroad and here in perfect har- 
mony, so as to prevent a sudden shipment of bonds from Europe 
here. Such an agency would not necessarily involve any great 
cost from the secret service fund of the government, but might 
by tact and good management be made a self-supporting institu- 
tion. Frankfort being the financial centre of the European conti- 
nent, as New York is for the American, the agency should be 
located at that place. 

It appears by a clipping from a German newspaper 
sent to Jay Cooke and preserved in his collection that 


United States bonds were at this time the subject of 
much excited speculation in Frankfort. Upon receipt 
of the news of the passage of the constitutional amend- 
ment abolishing slavery throughout the United States 
on Washington's Birthday, 1865, the Stars and Stripes 
were hoisted over the American consulate, which was 
the signal for much excitement at the Bourse as is evi- 
denced by a reading of this account : 

The speculators in American stocks whose number is legion 
concluded that this was done in honor of some recent event of 
great importance, as for instance the fall of Charleston, Mobile 
or Wilmington. Rumors of such events had been circulated be- 
fore from London and Queenstown to " bull " the market, 
but now it was obvious that our consul had received a direct 
telegram from his government confirming these reports. At once 
5-20 bonds went up one per cent. From all parts of Germany 
orders for 5-20 bonds were pouring in and $800,000 of these 
securities were sold on the Frankfort Bourse within two hours. 
The desire to purchase was indeed wonderful and it was difficult 
to satisfy the demand. Later in the day a telegram was received 
that the flag of the Union had also been raised on the build- 
ing of our consulate at Munich. This looked like a confirmation 
of good news and the wires flashed the intelligence all over Eu- 
rope that probably peace had been concluded between the Nortli 
and South, and that the flag of the Union had been thrown to 
the breeze in honor of the great event. There, as well as in 
Berlin, Amsterdam, etc., the excitement was increasing. The 
bankers not having a sufficient supply of 5-20 bonds on hand 
sold them on delivery in a few days. The price went up to 55 
and 56 and in Munich and Berlin it was even higher and in fact 
8 to 10 per cent, above the last New York quotations. 

From many sources it is made clear that a strong 
movement had set in in favor of American securities in 
Europe among all classes of the people as the victories 


of the Union armies convinced foreign investors of the 
security of the loans. It was beheved that the Secre- 
tary of the Treasury would at last sell bonds abroad, 
a subject which had been so much discussed since the 
first days of the war. 

Many policies were urged upon Mr. McCuUoch and 
he entertained them with an appearance of impartial 
love. On March 27th Henry Cooke wrote to Jay Cooke : 

Dear Jay: 

While waiting in Harrington's room the hour for the mail 
approaches and I save time by writing you from the De- 
I)artnicnt. I have had several interviews with the Secretary to- 
day and have had a difficult task to keep him from doing 
something rash. As a sample of the foolish things he has al- 
lowed to find a lodgment in his mind I may mention the follow- 
ing propositions which are urged upon him by men who ought 
to know better. Some of the leading old bank men of New 
York and Boston are urging the issue of 100 millions of "a clean 
20 year 6 % gold-bearing bond," not to be offered for sale to 
the public, but to be kept for banks desiring to take them as the 
basis of banking at a premium of say 5 %. I showed him the 
ruinous effect of such a loan by convincing him that all the na- 
tional banks which now hold 5-20S would rush in to make the 
exchange for the 20-year bonds by first selling the 5-20S and 
then buying the 20 years. This would knock down the price of 
securities now on the market, etc. He admitted that the idea 
was not feasible. Another proposal urged by contractors and 
banks carrying vouchers is for him to resume the issue of certifi- 
cates of indebtedness. I showed him how this would knock down 
the price of certificates and thus spoil the market for 7-30S; so 
he abandons that. H. C. Carey is here prophesying disaster and 
urging him to issue heavily of legal tenders. I told him Carey 
was an educated and polished humbug, a mere library theorist 
who had no practical knowledge whatever of what he was talk- 
ing about ; so he has dropped Mr. Carey. His next idea is a loan 
of 50 or 100 millions to be quietly made (and nothing said about 


it till it is accomplished) for gold abroad. I told him this might 
be done; but that it was due to you and your agency that the 
negotiation should be made through our house so as to avoid 
clashing of plans and because we could make the negotiations 
better than anybody else, having had the thing in view for over 
a year past. I told him that, as he was aware, I spent some time 
last summer in Germany and London preparing the way for such 
a negotiation; that we had already received several propositions 
from eminent houses, that Mr. Moor head and Mr. Clark were 
already there on the ground, that we could do better in Europe 
than any other American house because we were better known in 
connection with American loans. I did this to head off his hint- 
ing anything of the kind to outside parties. He asked me to 
write you for your views fully on this subject of a foreign loan, 
and how and on what terms we would undertake it, keeping it 
quiet so as not to interfere with our 7-30 sales. 

Two days later, on March 29th, Henry Cooke wrote 
his brother : 

Secretary McCulloch is decidedly in favor of our trying our 
hand at a fifty million long loan in Europe, if you think best and 
can do it so as not to interfere with sales of 7-30S at home and 
the value of gold loans here. 

On April 12, 1865, Henry Cooke reported again: 

The Secretary is much exercised about the foreign market, 
thinks we should take advantage of the furore in Europe to work 
off a round lot of 50 or 100 millions of such securities, as you 
think best, 7-30S, 10-40S or a new special six per cent, foreign 
issue. He has again asked me to write you on the subject. I 
believe it would pay for you to run down and talk the whole mat- 
ter over with him. It is now in shape to require only your finish- 
ing touch. He thinks a good supply of gold abroad would enable 
him to control absolutely the markets at home. Think of this. 

The next day he wrote : 

While I was waiting for your letter from the Secretary of the 
Treasury (now being prepared) in regard to your commission 


on sales of 7-30S I write this. I had a long interview with the 
Secretary this morning, in the course of which he declared his 
fixed purpose to make a foreign loan. He says it is indispensable. 
He is dunned on all hands and says he is satisfied that he must 
have "two strings to his bow." He says he would sell a loan of 
200 millions abroad if he could get it so as to net him about 
par here. I have not suggested these ideas to him, but I find 
him so fixed in them that it is useless to oppose them. More- 
over, I frankly admit that they accord with my own. The time 
to borrow abroad is in the flush of our success and when our 
credit is at the highest point, and Mr. McC. reasons well, I think, 
when he says he wants to avail himself of this state of things 
and not to wait until there should be a lull or a reaction. Right 
or wrong, however, he is fixed upon a foreign loan and if we 
are wise we will control, as we can, its negotiation. He asked 
me what I supposed it would cost. I told him he would have 
to pay the usual European commission of 2J/2 per cent, and that 
if we undertook it we would get our compensation out of the 
European parties. This was upon the basis of our proposition 
some time ago to Mr. Fessenden. He said he was anxious to 
hear from you on the subject. I told him I had written you. 
He wanted me to write again to-day, and I have done so. My 
conclusion is that the time has arrived when you should have a 
full understanding with the Secretary on this matter and to that 
end that you should not lose a day in coming down to talk it 
over with him. I have said all I have felt authorized to say on 
the subject and you must do the rest. 

Mr. Cooke had for a long time striven to make the 
Department see the advantages of directly paying gov- 
ernment creditors in notes and bonds. It was a feature 
of the Jay Cooke bill which in the form of the "J^X 
Cooke Amendment" was voted down by Congress in 
February, 1863. The plan was urged upon Mr. Chase 
and Mr. Fessenden and some government paper had 
been distributed at different times in this way. Now 


Mr. Cooke exerted a larger influence than ever before, 
the law of March 3, 1865, specifically provided for the 
transfers and he persuaded Mr. McCuUoch to authorize 
him to exchange vouchers for 7-30 notes and fund this 
part of the floating debt. On February 14th the Sub- 
scription Agent had sent a circular to the depository na- 
tional banks telling them that they could apply the five 
per cent, legal tender notes to purchases of the seven- 
thirties. At another time he informed the national banks 
that he would receive their own notes, having "frequent 
opportunities to send them to remote points for army 
payments, etc." ^ Constantly alert to the need of facili- 
tating the operation entrusted to his care he saw that if 
the vouchers issued for war material, provisions and 
services to the government could be directly exchanged 
for "bonds" the Treasury would be cleared of sus- 
pended requisitions while it would be saved the trouble 
and expense of the cash transfer. This matter was 
taking form in March, 1865. Secretary Stanton 
then precipitated upon the Treasury Department 
another lot of old requisitions and on March 30th 
the suspended debt was stated by Secretary Mc- 
CuUoch still to be about $100,000,000. Mr. Cooke's 
programme was submitted to the new Secretary 
at their first conference and on March 15th he presented 
his proposals in writing in the following letter to Mr. 
McCulloch : 

Dear Sir — I propose to act for you and the holders of vouch- 
ers in carrying out the provisions of the six hundred millions 
loan bill as applicable at your discretion to the payment of this 
class of creditors in the seven-thirty loans of the government as 

^ Circular of Feb. la 


follows : The War Department to make special requisitions upon 
the Treasury for such sum as may be combined by certain large 
holders of vouchers to the extent of ten, twenty or thirty millions 
to be disbursed (according to memorandum by me) in New 
York, Philadelphia, Washington and Cincinnati by the quarter- 
masters of those cities, who will hand over to the holders of 
vouchers and in exchange therefor checks for equal amounts on 
the national depository banks, to be designated hereafter, and 
not exceeding one in each city. These checks the same day pass 
into my hands on subscription to the seven-thirty loan and are 
deposited by me in the banks upon which they are drawn to 
credit of the Treasurer of the United States on account of my 

The result is that the debits and credits are alike on the books 
of these banks and the Treasury has paid off this large amount 
of debt, and obtained subscriptions to this large amount of seven- 
thirty loan. I agree to so arrange with these takers of loan by 
requiring them to retire for four months the whole amount of 
loan taken so as not to cause any interference with my regular 
sales for cash, and also bond these takers to dispose of the seven- 
thirties only in such manner and in such amounts as I may deem 
best for the interests of the loan. 

If this arrangement is made it will greatly swell my subscrip- 
tions and help on the furore of the loan, if managed judiciously 
by me, and it will also enable you to pay the balance of this 
class of claims much sooner, and in all imaginable ways benefit 
the Treasury. Most truly yours. 

Jay Cooke. 

The arrangement was subject to some practical ob- 
jections which were indicated in a letter to Mr. Cooke 
from an officer of the First National Bank of Baltimore : 

Referring to the effect of a somewhat similar proceeding last 
year when the troops and fleet in the James River were paid in 
small 7-30 notes, I can see in such a course nothing but the most 
disastrous consequences to the success of this loan. On the occa- 
sion referred to the notes were immediately passed from hand 


to hand, or sold at the best obtainable prices and the subscrip- 
tions for several weeks entirely ceased at this bank. When gov- 
ernment contractors and other creditors are now selling or 
hypothecating their vouchers on any terms they can obtain for 
ready money no one can doubt that they would put the 7-30S 
on the market at the best figures and the subscriptions would be 
utterly suspended for the time being. 

Mr. Cooke, anticipating the objectors, had arranged to 
obviate the possible dangers of the policy which he advo- 
cated. He proposed to negotiate only with holders who 
would agree to keep their notes for at least four months, 
and who were to all appearances able to wait so long be- 
fore realizing upon them. On March i8th Henry Cooke 
wrote that Secretary McCuUoch had assented to the 
voucher proposition, but it was several weeks before the 
scheme was given practical effect. On March 29th Sec- 
retary Stanton threw an obstacle in the way of the 
transfers. Henry Cooke wrote to Jay Cooke under that 
date as follows : 

Papers were all completed and placed before him for signature 
last night when he raised a new legal point under Sec. 2 of the 
600 million loan bill. He said the provision of the bill had not 
been complied with, inasmuch as the creditors of the government 
had not furnished the requisite notice (of their willingness to sub- 
scribe for the 7-30S in payment of their vouchers) "through the 
Department or office making the requisition." In vain did Har- 
rington plead that it was a mere matter of routine, that such 
technical objections embarrassed the Treasury in its efforts to 
clear off the debts of the War Department, etc. He refused to 
sign the order unless the vouchers were regularly put through 
the disbursing officer's accounts. At length he yielded so far 
to the argument that the Departments were advised of such de- 
sire of the creditors through the Treasury Department acting 
upon the information of its accredited agent, as to consent that 
the business should be done in the manner proposed, provided it 


were sanctioned by the written opinion of the Attorney General. 
So the whole matter was referred this morning to that function- 
ary. After a long sitting and full explanation of the whole 
modus operandi and object of the arrangement he has decided 
in favor of our way of doing the business and at this hour (4 
p. m.) is putting his opinion in writing for the Secretary of War, 
He says, however, to make the record complete and to fully jus- 
tify the War Department directing settlement in the manner 
proposed, duplicates of the letters from the holders of the vouch- 
ers should be filed with your letter. Harrington is as mad as a 
" March hare " and I " ain't much shorter," but, thanks to the 
Attorney General, it's all right now. 

Mr Cooke managed these negotiations very shrewdly 
and in April the trade assumed large dimensions — ^how 
large is indicated by a letter from Henry D. Cooke writ- 
ten in the Treasury Department on April 26th : 

Dear Brother: — While waiting in the Loan Bureau (Marsh's 
room) for about 5J^ millions of drafts to cover voucher sub- 
scriptions I save time by beginning this to you here. We sent 
yesterday over $8,000,000 of voucher 7-30S and this lot to-day 
cleans up all our voucher subscriptions to Monday. We have 
in transitu only about 2,000,000 and from this time forth will 
remit on the third day after receipt of the schedules. Harring- 
ton detailed two of his smartest clerks yesterday to bring up the 
back work in the Quartermaster General's office and they promise 
now to keep up. I have seen Mr. McCulloch about continuing 
subscriptions up to $50,000,000 and he leaves it entirely to our 
judgment. I don't see how we can stop short of this amount 
when we take in all with whom we have partially arranged and 
all the strong railroad parties who are coming in. The Secretary 
asked me this morning if some plan could not be devised by 
which the government indebtedness could be reduced more rap- 
idly. As I could see no way of increasing the amount of popular 
subscriptions it occurred to me that as payment of maturing cer- 
tificates of indebtedness was the great absorbent of money re- 
ceived from subscriptions it might be well to get some of them 


out of the way just as we were getting the vouchers out of the 
way. As these certificates are mostly held by banks we could 
doubtless make a dicker with them to swap the certificates for 
7-30S and save all our ^ commission thereon. I proposed to 
the Secretary that he should authorize us to receive at par and 
accrued interest to date in payment for subscriptions to 7-30's 
any certificates maturing during the months of May, June and 
July. He assented to it. (Is it not a good move?) But he said 
we must exact of the banks making the trade the same conditions 
that we do of the voucher subscribers. This will at least help 
swell our subscriptions to 100 millions a month. We don't pro- 
pose doing anything in this matter till we hear from you, but I 
thought you could pick up in this way in New York, Philadelphia 
and Boston from 30 to 50 millions. 

There was of course ground for charges of bad faith 
and Mr. Cooke in these negotiations procured himself 
much trouble in enforcing the rules he had established 
for the transfer. 

The kind of an agreement which was exacted of hold- 
ers is indicated in the circular issued on April 22nd by 
C. H. Hoyt, Chief Quartermaster of the Northern De- 
partment, whose office was at Cincinnati. It was as fol- 

You are respectfully informed that the existing indebtedness 
of the Quartermaster's Department will be paid in 7-30 Treasury 
notes to such government creditors as will agree to receive the 
same in payment and hold them for four months. 

Consult with the principal creditors and forward the names 
of such as agree to come into the arrangement as follows : " We 
the undersigned agree to accept payment in seven-thirty United 
States bonds at par in payment of indebtedness due us respec- 
tively by the United States for the amount placed opposite our 
respective names; the bonds issued to each subscriber hereto in 
pursuance to this agreement to be held by him four months be- 
fore being placed in the market." 


The holder of $3,000,000 in vouchers at New Albany, 
Tnd., who was asked to convert them into seven-thirty 
notes and early agreed so to dispose of $1,000,000 ex- 
pressed a fear that the agreement would not be observed 
by the necessitous. He wrote : 

If the door is to be thrown wide open and notes given to all 
voucher holders exacting a promise to hold four months then 
I want no more. But if you give the notes only to such dis- 
creet parties as are known to have the ability, integrity and 
disposition to hold them four months as agreed then I want more. 
I grant you this seems at first glance a selfish plea, but is it ? If 
the notes are given to all voucher holders what will be the result ? 
The needy, greedy, hard-pushed and unscrupulous will soon flood 
the market, force sales at ruinous prices to the discredit of the 
government and the serious loss of honest holders. 

W. J. Lowrey and Company of Evansville, Ind., com- 
plained on April 28th that the quartermaster in that 
place was receiving proposals from holders of vouchers 
in amounts as small as $400 which was contrary to Mr. 
Cooke's expectations and desires. 

The taker of the notes must not only agree to hold 
them but it should also be ascertained whether or not 
he was able to hold them. With this object in view it 
was specified that transfers should not be made for 
small amounts or to irresponsible persons, and in the 
exercise of discrimination there were adopted processes 
troublesome to the voucher holder and the agent, the re- 
ward frequently being many very unpleasant accusa- 
tions. An indication of what Mr. Cooke experienced is 
found in a letter to him from C. W. Moulton, the Quar- 
termaster at Cincinnati, who wrote on May lOth : 

Your note of the 8th is received. No one has the rig^ht to 
say that I have given any opinion that in the distribution of th« 


7 3-10 bonds there was any favoritism, and whoever says I have 
said so states that which is false. No one appreciates more than 
I do the aid vou have rendered in this matter, and no one is or 
can be more thankful to get out of debt than I am. I have had 
no object but to protect the credit of the Department here and 
by the kindness I have received from yourself and the Quarter- 
master-General and others connected with it a great deal of good 
has been done — for which the public ought to be thankful, but 
I suppose that when we are done with doing them good they 
will accuse us of selfishness. I, too, in this matter have been 
charged with favoritism, but I am grown indifferent to what is 
said of my official acts. I know that there will be about so much 
fault found under any circumstances. I do not believe the peo- 
ple will ever be made to understand the amount of labor and 
management it has taken to keep the sale of the loan steadily 
progressing as you have done, nor can they appreciate the trouble 
that would have occurred if it had not been done. 

For a long time a small transaction involving the sale 
of four millions of "old" five-twenty bonds had been 
pending. In March, 1863, funds were sent to Europe 
for a foreign operation. Ten millions of dollars in five- 
twenty bonds were placed in the hands of the Barings 
in London so that bills could be drawn against the sum 
but the negotiation failed. Six millions were returned 
to the Treasury and four remained for sale in Europe 
on a favorable market.* Again and again for two years 
this balance was the subject of letters and conversations 
between Mr. Cooke's representatives and the Secretary 
of the Treasury, first Oiase, then Fessenden and finally 
McCulloch. In February, 1865, Mr. Cooke oflFered to 
buy this lot of bonds at nine per cent, premiunx or to 

1 Report of the Secretary of the Treasury for December, 1864. For the 
correspondence between Giase and his foreign agent, see Chase Papers in 
Pa. Hist Soc. Library. 


sell them on commission as the Secretary might prefer. 
His offer was as follows : 


Washington, D. C, February 17, 1865. 
Hon, Wm. Pitt Fessenden, Secretary of the Treasury: 

Sir: — We will purchase of you one million of the United 
States five-twenty bonds now in the hands of Messrs. Baring 
Bros, and Company, London, at nine per cent premium deliv- 
erable at London, with the privilege of taking the remaining 
three millions or any part thereof in instalments of not less than 
1,000,000 each at the same price within thirty days from day 
of acceptance of this proposition. 

If the necessities of your department should require before ex- 
piration of tlie thirty days the whole 4,000,000 we will advance 
the amount in case of the acceptance of this proposition for the 
term of the option, to be repaid to us with interest in case we do 
not avail ourselves of the above privilege. 

When it is considered that we will have to pay a commission 
of at least 5^ per cent, sterling (equivalent to say 1% per cent 
in our currency), upon sales of the bonds if sold in England, 
and if sold in this country an equal or greater expense for freight 
and insurance, besides loss of interest, to say nothing of the risks 
of fluctuations in the exchange market and price of bonds, we 
think the above proposition a liberal one. The price offered is 
about the average during the past two weeks, and even at the 
present quotations affords a very small margin to cover risks and 

Or if you deem it more advantageous to the government we 
will sell the bonds at best rates, our charges for commissions 
upon net sales being one-fourth of one per cent. 

Yours very truly, 

Jay Cooke and Company. 

This offer was not very favorably received by the Sec- 
retary. On February 23rd in consequence of a decline 
in the price of bonds Jay Cooke withdrew it. "This will 


make the Secretary realize/' wrote Henry Cooke, ''that 
there is such a thing as risk in these big purchases." 
These bonds were finally sold by Secretary McCulloch 
through Jay Cooke at a price averaging a little more 
than io6, Mr. Cooke being paid one-eighth of one per 
cent, for managing the operation which raised the total 
issue of the original five-twenties to about $515,000,000. 

By this time Richmond had fallen. Soon Lee sur- 
rendered to Grant and the war was practically at an end. 
There would be no more bloodshed, though tasks of a 
different kind, and of even greater magnitude confronted 
the country in the disbandment of the army, the payment 
of suspended debt, the formulation of a plan for the re- 
sumption of specie payments, the conciliation of the 
South and the return to the Union of the disaffected 
states. On April 3rd Fahnestock wrote: "I had only 
fairly begun my talk with the Secretary when the Rich- 
mond news upset the financial topic entirely. I was with 
McCulloch when Ben Wade came in with the announce- 
ment that Weitzel had occupied Richmond. Ben was 
crazy with excitement and before I had fired off the tele- 
gram to you the whole Department was in an uproar, 
and presently the clerks were all let loose for a jollifica- 
tion, followed by the clerks in the various other govern- 
ment offices. Seward*s speech I heard and it was ir- 
resistibly funny. You will see it in the papers. Stan- 
ton they say was beside himself — ^his skin would hardly 
hold him." 

"All Washington was drunk yesterday," continued 
Fahnestock in his letter of April 4th explaining the dis- 
organization of the Departments and the impossibility of 
conducting business in the regular way. The city was 


illuminated and the lords of misrule were in conipleie 
command of the streets. The banking house of Jay 
Cooke and Company bore striking inscriptions. Over 
the north door the figures "5-20" were boldly displayed 
and over the south door "7-30." Between these two 
transparencies was hung a larger one containing these 
words : 

The Bravery of our Army, 

The Valor of our Navy 

Sustained by our Treasury 

upon the Faith and 

Substance of 
A Patriotic People. 

The capture of Richmond was rapidly followed by the 
surrender of Lee's army when joy again was imconfined. 
All serious work in the government departments and in 
private business houses was interfered with because of 
the carousals of the clerks, and nothing could be done, 
Henry D. Cooke wrote on April 7th, "till the poor fel- 
lows get through celebrating Union victories/* 

"How our poor friend Richard Cobden would have 
joyed to see this day/* wrote Frank H. Evans from Lon- 
don in response to Mr. Cooke's telegrams announcing 
Lee's surrender. "Alas he did but pass away the day 
of the evacuation of Petersburg." 

Throughout this excitement Jay Cooke's chief task 
was to watch and manipulate the New York stock mar- 
ket. It no sooner showed signs of settlement than some 
fresh piece of news came in to disturb it. The panic in 
March when the collapse of the Rebellion was anticipated 
broke out afresh when the actual news of Grant's suc- 
cesses reached Wall Street. On March 29th * McCul- 

1 H. D. C's letter of that date. 

i! . 

! .-,,.Bt,.n;,.^ 

H. B 


loch sent three millions to Stewart for use in the market 
and on April 2nd three milHons more/ but he was fear- 
ful of overloading himself with the cheap and unpopular 
10-408. Fahnestock wrote Jay Cooke on April 3rd: 
"I shall urge him [the Secretary] to a resolute fighting 
of the bears and have telegraphed you to write him to- 
day a strong letter to keep his courage up." 

Much was done in this line by Jay Cooke and his 
agents without touching public funds or involving the 
Department in responsibilities. 

"We are all anxious to save the government from 
buying/' Crawford wrote to Jay Cooke on April ist, 
"and shall do all we can to prevent it. We sell bonds 
right out at cost where they go out of the market." The 
efforts of Mr. Cooke, who was so well aided by Craw- 
ford, Fisk and Hatch and Vermilye, were again wholly 
successful. On April 8th Henry Cooke wrote his brother 


The fact that governments went up yesterday, while gold de- 
clined, the Secretary regards as the most healthy feature recently 
developed in the market. He fully appreciates the success of 
your management in New York, and admits that all you prom- 
ised has been realized. Henceforth you have carte blanche to 
manage the market in your own way and your agents can buy 
governments whenever it is necessary to keep the price stiff. 
He is particularly anxious that there should not be another de- 
cline in governments and is troubled no more about gold. We 
talked at some length about the letters he is getting from N. Y. 
(samples of which I sent you), and he now understands them. 
They will not induce him to swerve from the course he has 
marked out, but on the contrary will make him more firm, for he 
now knows who are the true friends of the government. 

1 Fahncstock's letter of April 3d. 


The excitement over Lee's surrender had scarcely 
calmed when the country was compelled to undergo the 
experiences arising out of President Lincoln's assassina- 
tion. From almost uncontrollable joy there was swift 
passage to horror, sorrow and a desire for vengeance. 
On April 15th Henry Cooke wrote: 

A night of horrors and a day of impenetrable gloom ! I was 
aroused from my sleep last night about half past one o'clock by 
the fearful tidings of murder and assassination. Huntington 
came over to tell me the President was dying and that Seward 
and his son Frederick, the assistant secretary, were not expected 
to live till morning. I slept but little after he had gone. I can- 
not dwell upon the details of this stupendous tragedy. The 
newspapers will tell you all about them. Governor Seward's 
wounds were not mortal, but he was in a very critical condition 
before, and it is doubtful if he recovers. Attempts were made 
to get at Vice President Johnston, but they were foiled. Secre- 
tary Stanton was to have been another victim, but the skulking 
assassin was frightened away from his door. Facts enough are 
already developed to show that there was an organized con- 
spiracy to assassinate the President and his whole cabinet, to- 
gether with the Vice President. The murderer of the President 
was Booth beyond all doubt. He is in custody, although the 
fact is kept from the public for fear of violence. Johnston was 
sworn in this morning by Chief Justice Chase in the presence of 
McCulloch, Dennison and Speed. The cabinet met at noon to- 
day at Mr. McCulloch's room in the Treasury. They are still, 
at 3^4 o'clock, in session, and General Grant is with them. All 
business is suspended throughout the city. Have just heard from 
Fred Seward. He is some better and there are now slight hopes 
of his recovery. 

Mr. McCulloch instantly decided what course to pursue when 
I read him your telegram. He leaves it all to you and Mr. Stew- 
art. The members of the cabinet have" all tendered their resigna- 
tions pro forma, which will not — at least at present — be ac- 
cepted. I infer from some things Mr. McC. said to me this 

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morning that he expects to be permanently retained. The good 
of the country requires that in this emergency there should be 
no change in his Department, and I therefore have not thought 
it wrong to take instant steps to forestall any movements that 
might be made to displace him. Colfax, Defrees and others in 
the confidence of the new President will look after this. It is 
not probable that much business will be done till after the funeral 
of Mr. Lincoln, which will not take place before Wednesday 
next. Would it not be well for you to go to New York Monday 
to direct operations to sustain the market? Stewart has full 
authority from the Secretary to anticipate the May interest to 
keep down gold. 

Mr. Cooke did not need Mr. McCuUoch's authority to 
re-enter the market. The news of the assassination was 
received by him on Saturday morning while proceeding 
from his country home to the railway station, to take a 
train for Philadelphia. He was accompanied by his son 
Jay and he at once wrote despatches to his agents in 
New York, commanding them to purchase bonds in im- 
limited amounts. The market must be sustained at all 
hazards. He also telegraphed to Washington. Then, 
instead of going to his office, as he had intended, he 
boarded the first train for New York, writing hurriedly 
on the way to his brother Henry: "It is all important 
that government securities should stand like a rock. 
. . . Poor Lincoln — a noble soul has gone." 
In his Memoirs Mr. Cooke says of this incident : 
"I telegraphed to my agents in New York to pur- 
chase all United States bonds thrown on the market, 
saying that I would meet them at the Sub-Treasury 
before three o'clock and take them oflF their hands. At 
the same time I sent to my house in Washington an ur- 
gent despatch, assuring the Secretary that I would thus 


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fully maintain the credit of the nation in this crisis and 
that the money would all come back to the Treasury by 
a re-sale of the bonds." 

On Saturday, however, the boards did not open for 
trade, dealers in governments kept their doors closed and 
there were no quotations. "Everybody is too much hor- 
rified to think of business ; we must wait for Monday," 
Crawford told Jay Cooke. 

On that day, April 17th, Henry Cooke wrote his 
brother as follows: 

You can have no idea of the confusion prevailing at the De- 
partments, and of the difficulty of doing business, but we keep at 
work. The Secretary is entirely satisfied with your management 
and told me to telegraph you to act upon your own judgment 
co-operating with Stewart. In regard to anticipating the May 
interest he don't want it done unless it is necessary to prevent a 
great rise in gold, which it won't be from present indications. 
He thinks this should be resorted to only in case of extremity, 
as the government would appear to be weak and he wants it to 
appear strong. If gold can be kept down without it the moral 
effect would be better. Stewart had about 3J^ millions gold 
which he bought lately and he says that should be first used, and 
he thinks that is all that is necessary. Your and Crawford's 
telegrams have greatly reassured him. 

On April i8th Henry Cooke added: 

I have only time before the late mail goes to say in brief that 
you have carte blanche to manage the market as you may deem 
best. Mr. McC. leaves it all to you and Stewart. 

On the 19th while still in New York with a firm hand 
upon the situation. Jay Cooke wrote : 

I find a very precious feeling here in regard to Mr. Lincoln's 
memory and the effect of his death is to bond all the people in 
a firmer Union. All parties unite in saying that God's hand is 


in it all, and that we are stronger in every way than we were 
last Friday p. m. Is it not a splendid spectacle ? ^ 

Concerning this operation Jay Cooke continues in his 
Memoirs: "The first day my agents brought me some 
three millions and it required the purchase of less than 
twenty millions in the space of seven or eight days to 
end the panic. The bonds were resold and the money 
was replaced in the Treasury at a profit to the govern- 
ment, as I had directed an advance each day of one- 
eighth on all the old issues of bonds, so that the spectacle 
was presented to the world of a nation with its credit 
unimpaired and its securities advancing in price while 
suflFering from a terrible calamity. The London Times 
and other influential European journals commented with 
surprise upon this wonderful exhibition of confidence 
on the part of the American people. I have always re- 
garded this as among my greatest successes in finance. 
The world was not informed as to the particulars of this 
movement until long afterward. I preferred that the 
national credit should enjoy all the advantages of this 
action on my part and it was eight years before any 
public reference was made to the subject." 

Although all business was suspended in Washington 
imtil after the President's funeral the politicians gave 
themselves no rest. On April 17th Henry Cooke wrote: 

A violent effort is being made by an immensely strong com- 
bination, embracing all the radicals, to oust the present cabinet 
root and branch. We — that is, Colfax, Defrees, Wilkeson. 
Huntington, Thurlow Weed, myself and others — have (judi- 
ciously) blocked the game, at least for the present; and in any 
event I think there is no doubt of McC.'s being retained. It is 
a fight between the two factions — the radicals and the con- 

1 To H. D. C. 


servatives — and fortunately for McC. he has not been politician 
enough to be obnoxious to either party — while as a practical 
financial man his retention is indispensable. A change would 
shake confidence, etc. We have used these arguments success- 
fully. Great confidence is shown in the new President, who has 
displayed admirable qualities in his new position already. We 
haven't been idle, but I have kept in the background. In any 
event, our agency will not be disturbed. 

The next day Henry Cooke continued his report : 

I have nothing new to advise you to-day beyond what has been 
done in reference to McCulloch's retention in the cabinet. We 
have had hard work, but now have every assurance that it is all 
right. Wilkeson has been a host and my old friends have been 
powerful and zealous — Colfax, Covode, Julian, Wilson and oth- 
ers. The plan was " nipped i' the bud." 



The severity of the panics induced by the collapse