Cooke, Jay

Cooke, Jay (1821-1905), American financier, was born at Sandusky, Ohio, on the 10th of August 1821, the son of Eleutheros Cooke (1787-1864), a pioneer Ohio lawyer, and Whig member of Congress from that state in 1831-1833. Being destined for a commercial career, Jay Cooke received a preliminary training in a trading house in St Louis, and in the booking office of a transportation company in Philadelphia, and at the age of eighteen entered the Philadelphia house of E.W. Clark & Company, one of the largest private banking firms in the country. He showed such aptitude for business that three years later he was admitted to membership in the firm, and before he was thirty he was also a partner in the New York and St Louis branches of the Clarks. In 1858 he retired from the firm, and for the next three years he devoted himself to reorganizing some of the abandoned Pennsylvania railways and canals and placing them again in operation. On the 1st of January 1861 he opened in Philadelphia the private banking house of Jay Cooke & Company, and soon achieved signal success in floating at par a war loan of $3,000,000 for the state of Pennsylvania, whose credit had become notoriously bad. In the early months of the Civil War Cooke co-operated with the secretary of the treasury, Salmon P. Chase, in securing loans from the leading bankers in the Northern cities, and his own firm was so successful in distributing treasury notes that Chase engaged him as special agent for the sale of the $500,000,000 of so-called “five-twenty” bonds authorized by the act of the 25th of February 1862. To dispose of these bonds the treasury department had already tried every regular means at its command and had failed. Cooke secured the influence of the American press, appointed 2500 sub-agents, and before the machinery he set in motion could be stopped he had sold $11,000,000 more of bonds than had been authorized, an excess which Congress immediately sanctioned. At the same time he used all his influence in favour of the establishment of national banks, and organized a national bank at Washington and another at Philadelphia almost as soon as such institutions were authorized by Congress. In the early months of 1865, when the needs of the government were pressing, and the sale of the new “seven-thirty” notes by the national banks had been very disappointing, Cooke’s services were again secured. He sent agents into the remotest villages and hamlets, and even into the isolated mining camps of the West, and caused the rural newspapers to praise the loan. As a result, between February and July 1865 he had disposed of three series of the notes, reaching a total of $830,000,000. Through these efforts the Union soldiers were well supplied and well paid while dealing the final blows of the war; and, later, with money in their pockets, they were disbanded without difficulty.

After the war Cooke became interested in the development of the North-west, and in 1870 his firm undertook to finance the construction of the Northern Pacific railway. In advancing the money for the work, the firm over-estimated the possibilities of its capital, and at the approach of the financial crisis of 1873 it was forced to suspend. By 1880 Cooke had discharged all his obligations, and through an investment in a silver mine in Utah had again become wealthy. He died at Ogontz, Pennsylvania, on the 18th of February 1905. Cooke was noted for his piety, and gave regularly a tenth of his income for religious and charitable purposes. His handsome estate at Ogontz, which he had been compelled to give up during his bankruptcy, he later repurchased and converted into a school for girls.