The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1864-04-18
Jaw Cooke & Co, aud the Five-Twenties.

Jay Cooke Il Co, aud the Five-Twenties.
Jay Cooke & Co., Philadelphia, were the
Government agents to negotiate the five
twenty bonds. 1t is not long since the oppo-
sition started report that this firm were ma
king vast wealth out of the Government, and
we think we have seen the statement that
their commissions amounted to three or four
-one paper had it as high as eight-per cent.
for doing the business of the Government.
Complaints have also been made that Govern
ment was charged, over and above commits
sious, large sums fsr advertising and divers
other expenses. So rife became these and
similar allegations, that the House of Repre-
sentatives passed resolution, calling upon
the Secretary of the Treasury to know "what
" have been the services OF Jay Cooke e Co.
"to the Government in the sale of u. S.
" 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 Treas
Jury Department ITSELF also, what sums of
f" money, if any, have been paid out of the
" Treasury for advertisements ordered by
"Jay Cooke & Coz
To this call Mr.. Secretary Chase made a
full and specific reply. II is too long to be
conveniently transferred to our columns, but
the important points we will give. 1t seems
the first services of these Bankers for the
Government was in negotiating the three years
Treasury notes, popularity known as the
seven thirties. For their services in this
transaction they were allowed one-filth of one
per cent. on the first one hundred thousand
dollars obtained by them, and one-eighth on
all sums in excess, and allowed for advertising
one hundred aud fifty dollars.
When the fve-twenty bonds were author
lied, the Secretary of the Treasury endeav-
ored to ascertain she best terms on which the
bonds could be negotiated by sales. Careful
inquiry was made through the assistant treas
urer at New York, and other experienced
persons, and it was ascertained that negotia-
tons could not be effected at higher rates
than from 81 to 90 cents for a dollar, which
would involve loss on each hundred millions
of the loan Of from two to three millions Of
dollars.
Mr.. Chase prudently declined TO submit TO
such shave, and hit upon the plan OF APP
pointing. general agent, with authority to
appoint sub-agents, for whom the principal
agent should be personally responsible and
through such system TO organize direct
appeal to the people. For general agent he
selected Jay Cooke, whose integrity in pre-
vious transactions was strong testimony in
his favor. We now quote from Mr.. Chase's
response to the House of Representatives
1t was agreed that his commissions, for SER
vices and to cover disbursements, should be
one-haf OF one per cent: on the first ten mil
lions, and three eighths on subscriptions be-
yond that amount. OF these three-eghths
Mr.. Cooke was bound to pay one-eighth to
subscription sub-agents, and another eighth
10 travelling agents and for advertising, and
other expenses OF making the loan as widely
and favorably known possible. He was
allowed TO retain the other eighth as compen-
sation for his own labor aud risk and for ex-
penses ehargeable to his own proportion.
His responsibility covered all acts of his
sub-agents until Iayment into the Treasury
OF all moneys subs cribed and delivery TO sub
scribers of all bonds subscribed for No La
bility 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 salts
faction 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 sew
eral of the designated depositaries were also
directed to use their best endeayors TO obtain
subscrip tons, and were authorized To allow
one eighth, and, in some cases, one-fourth of
one per cent. to purchasers for resale.
Mr.. Chase gives an interesting account Of
the system organized by Mr.. Cooke, says lie
appointed about $500 sub-agents, that their
work extended into almost every county and
town OF the loyal States, that the fruit of the
system were subscriptions for fye-twenty
bonds amounting, in the aggregate, to the
sum of s56l ,952 $50; and that without these
subscriptions neither the army nor the navy
nor the general creditors of the Government
could have been paid. Says Mr.. Chase:
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 assistant treasurers and the designa-
ted depositaries. These subscriptions
III buC a@Bttpdtc 70 vi 10 oZD,
of which S92, l7S,300 were subscribed by pur-
chasers for resale and Sj6,6I5, 200 for direct
investment.
The whole compensation to the general
agent and sub-agents for services and for all
expenses incurred in obtaining and paying
over subscriptions, amounting to $3Gl .952. $50
was 81 ,3J0,0l3 10, of which $685. 81 was
paid TO the general agent as compensation for
responsibility, for services, and for expenses
chsrgeable upon the one-eighih allowed to
him.
To the cost OF the agencies, in order to as
certain the total expenses of the loan, must
be added the commissions allowed to pur-
chasers for resale, by the assistant treasurers
and other officers Of the Government: these
commissions amounted to Sl22, 100 80, making
the entire cost Of the whole loan 81 Az, 20;I-
"a. This cost is little less than three tenths
OF one per cent. Tor 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 nego-
tiated.
Had the bonds been sold at o. IL per cent.
the largest offer made for them by capital
lists and bankers-the negotiation of $780,
100000 would have been nearly equal to the
entire expense of negotiating the whole $780,
100000, and the sale Of the whole amount of
bonds at the same rate would have cost the
Government loss in discount of Sl2, 100000,
against 81 Az. 203 54-the actual cost of ne