Main currents in American thought An interpretation of American literature from the beginnings to 1920
to the front. He came of fighting Revolutionary stock, but love of the
battlefield had died out of the family. His father had been drafted
for the War of 1812, but hired a substitute who was unfortunate enough
to be killed, and none of the three sons got nearer the front than the
Treasury Department at Washington. It was there that the battles of the
Cooke brothers were fought. Henry Cooke went to Washington to attend
the inauguration of the new administration, and twenty-one days later
Jay Cooke modestly proposed a plan for mobilizing the resources of the
firm in defense of the country. On March 25, he wrote to his brother:
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
[Express]. 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.[510]
When the magnitude of the task in which the country was engaged became
clear to him he was no longer content with a single banking-house at
Philadelphia. A branch at Washington under the shadow of the Treasury
was highly desirable, and Henry Cooke was the man for the business.
A born lobbyist, a close friend of John Sherman--who was looking out
for a profitable opening in some war business for a brother--and of
Secretary of the Treasury Chase, he let no grass grow under his feet.
The war loans had not been taken freely and in July, Jay Cooke wrote
to Chase suggesting a close alliance between the Treasury and two
Philadelphia firms, Jay Cooke and Company and Drexel and Company.
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.... We could not be expected to leave our
comfortable homes and positions here without some great inducement
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 ... 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, ... we are ready to
throw ourselves into the matter heartily....[511]
It was quite an amazing proposal and one that Secretary Chase dared
not accept. Bankers and brokers in New York and Boston would scarcely
approve a monopoly of loan-commissions granted to two Philadelphia
houses. But Jay Cooke would not acknowledge defeat. He cultivated the
acquaintance of the Secretary, lent him money, entertained his family,
presented him with gifts, and gave him sound advice. He took the
harassed servant of the people to his warm and generous heart and was
vigilant in keeping him out of the clutches of Copperhead profiteers.
His opportunity came in October, 1861, when in competition with other
brokers he undertook the sale of a new bond-series. His success was
so great that he won the complete confidence of Secretary Chase,
and it was only a matter of time when he should secure his coveted
monopoly. In February, 1862, he opened the branch house at Washington,
immediately opposite the Treasury building, and Henry Cooke soon made
its offices an indispensable club for Congressmen and government
employees. He was charmingly cordial and during the next ten years he
knew everybody and every political move at the Capital. With the same
bland and deacon-like appearance as his brother, he was master of the
art of ingratiating himself into the confidence of influential men,
and successive Secretaries of the Treasury--Chase and Fessenden and
McCulloch--were easily induced to look with partial eye upon the firm
of Jay Cooke and Company. When Grant returned to Washington after the
war he was soon like a brother to Henry Cooke, and when the General
had tasted the quality of cigars kept for his use at Jay Cooke’s
Philadelphia home, his heart warmed to the kindly banker.
Meanwhile the firm was discovering innumerable ways to help win the
war; amongst others Henry Cooke put through a congressional franchise
for a street railway at Washington, and the new cars were soon carrying
citizens and soldiers to and fro, to their great content and the
company’s great profit. He was hourly in and out of the Treasury and
he knew as much about the government business as the Secretary. The
interests of the firm extended with amazing rapidity; other banks
came under their control and their agents were everywhere. Their
later successes in selling bonds were a revelation to older-fashioned
brokers. On the day that Richmond fell the “financier of the Civil
War” marked out the lines of a pretentious country house that was to
cost a million dollars and to become a show place of America, where
Secretaries of the Treasury, Presidents, and great men from every walk
of life were to find a welcome release from their cares. “As rich as
Jay Cooke” had become a common saying from the Atlantic to the Pacific.
The gigantic war had been no ill wind to the money-teller of 1861.
In certain aspects Jay Cooke may be reckoned the first modern American.
He was the first to understand the psychology of mass salesmanship.
It was his fertile brain that created the syndicate and conceived and
executed the modern American “drive.” Under his bland deacon-like
exterior was the mind of a realist. He assumed that every man has his
price, but he knew that few men like to acknowledge the fact even
to themselves; so he was at immense pains to cover our poor human
nakedness with generous professions. If he were to lure dollars from
old stockings in remote chimney-corners he must “sell” patriotism to
his fellow Americans; and to do that successfully he must manufacture
a militant public opinion. The soldier at the front, he announced
in a flood of advertisements, must be supported at the rear. It
was every loyal American’s war, and patriotism demanded that idle
dollars--in greenbacks--should be lent to the boys in blue, and a
grateful government would return them, both principal and interest, in
gold. To induce slacker dollars to become fighting dollars he placed
his agents in every neighborhood, in newspaper offices, in banks, in
pulpits--patriotic forerunners of the “one-minute men” of later drives.
They also served their country, he pointed out, who sold government
bonds on commission. He subsidized the press with a lavish hand, not
only the metropolitan dailies but the obscurest country weeklies. He
employed an army of hack-writers to prepare syndicated matter and he
scattered paying copy broadcast. His “hired friends” were everywhere.
In a hundred delicate ways he showed his appreciation of patriotic
coöperation in the bond-sales--gifts of trout caught with his own
hand, baskets of fruit from his own garden. He bought the pressings
of whole vineyards and cases of wine flowed in an endless stream to
strategic publicity-points. Rival brokers hinted that he was debauching
the press, but the army of greenbacks marching to the front was his
reply. It all cost a pretty penny, but the government was liberal with
commissions and when all expenses were deducted perhaps two millions
of profits remained in the vaults of the firm, to be added to the many
other millions which the prestige of the government agency with its
free advertising brought in its train.
With such prestige and with the greatest fluid resources as yet
accumulated by any American, it was inevitable that the Rothschild of
the North should play a bold part in the speculations of the Gilded
Age. Jay Cooke vastly enjoyed the game and it was idle to expect him
to sit back quietly when others were playing for high stakes. In those
halcyon days promoters were as thick as flies about a dead carcass;
wild-cat railroads had succeeded wild-cat banks as short-cuts to
wealth; and in an unlucky moment Jay Cooke was tempted. He had expected
to be made Secretary of the Treasury by President Grant, but failing
of appointment in spite of countless boxes of twenty-five-cent cigars
provided for the General’s pleasure, he determined to back the Northern
Pacific Railway enterprise. The company had been chartered in July,
1864, receiving a congressional grant of 12,800 acres of public land
for every mile of track laid in the states, and double that amount in
the territories. As the proposed line would run almost entirely through
territories the grand total was reckoned at 47,360,000 acres.[512]
Early land-sales were at the rate of $6 an acre. At such valuation the
prospective value of the grant through the territories was $153,600 for
every mile of track, yet in portions of an earlier line absorbed by the
company the road had been built for $8,225 a mile, and a stretch of 112
miles at the rate of $9,500.[513] To be sure there were great stretches
of unsalable land, but in compensation the company was free to run
its surveys so as to embrace choice mineral deposits, virgin timber,
water-power, and town sites.
As Jay Cooke contemplated the possibilities his buoyant temperament
took fire, and he dreamed of empire-building. He quickly rationalized
the project into a great patriotic undertaking that would carry the
blessings of civilization to the farthest Northwest. He would lay open
to the poor man the rich wheat lands of the Dakotas, the mineral wealth
of the Rockies, the vast timber resources of the Puget Sound territory.
He would annex western Canada by benevolent absorption. It was a dream
worthy of the Gilded Age and Jay Cooke was chief amongst the Beriah
Sellerses of the day. He threw himself into the project with boundless
optimism, and proved again his right to be called a great financier.
He proposed to sell the Northern Pacific as he had sold government
bonds. He had learned that to catch the little fish he must first
catch the big fish, for the shilling is timid till the pound shows the
way. He must create confidence, cost what it would, and to that end
he opened a huge pool and created a special syndicate. Stocks, jobs,
cash, influence, were distributed judiciously where they would do good.
In the language of stock-jobbing much “sweetening” was used.[514] And
there was need of much “sweetening,” for the times were inauspicious.
Jay Cooke drove the publicity work with his old vigor, but sales were
slow, and as the great patriotic venture showed signs of lagging he
turned for help to a sympathetic government.
His engineer had made a careful estimate of the prospective cost of
the road, which including rolling-stock, terminals, a branch line
to Portland, and interest on bonds during the construction, came to
$42,638 a mile for the entire line.[515] But the financier was not
satisfied “with the magnificent property the government has given us,”
and made ready to buy from Congress a revision of the terms of the
charter, which amongst other things would widen the land-grant belt
through the territories to 120 miles, convey a second right-of-way
zone from the Rocky Mountains to the Pacific, and permit the company
to hypothecate the whole before the terms of the contract were
fulfilled. It was an audacious proposal even to a generation used to
audacious proposals. There was bitter opposition, for the rumblings
of the _Crédit Mobilier_ scandal were already disturbing the halls of
Congress; but his lobbyists used “the company’s money freely” to bring
in the common breed of Congressmen, and the Cooke brothers employed
their well-practiced skill to take care of such important persons as
Speaker Blaine of the House, Vice-President Colfax of the Senate, and