, 1873-09-19
money AND COM MERGE.
MONETARY,
1'runapAr EVENING, Sept.

MONETARY. =.
ruunspAr EVENING, Sept. 10.
ne oorrac Tho general TOPIC of oonvoraation
In financial circles today waB tho failure Of Jay
Choke 4 Co, What will be tho result Whom
will 1t affect woro tho general inquiries. or
eoureo these queries cover too mitch ground to
be nuswcrcd ut once. This fRtluro In an impor-
tant financial evont OF which 1t In impossible to
forcBeo MI tho rcs.1lts got. It viii take tl1Io to
doyolop ttoin. There GRO, however,, some gen.
oral facts that will ennblo evory business man to
form his own opinions AZ to tho probable re-
suits.
: First, as fear aa our local interesta are con-
horned. The,o iB not National hank In this
sty that keeps on account with Jay Cooke & 90. |
The only bank OF any kind that docs, Ia the pri-
gato banking house Of Preston, Koan & Co.,
who arc tho agonts Of Jay Cooke Il Co. for tho |
sale OF Northern Pacific bonds, and II Ia not |
probable that the balances OF Nlossrs. Preston,
Kean / Co. with Jay Cooke i Co. nre
large enough to mako aerious troubles !
There arc great many country bank.
throughout tho West, both private and Nation-
il, that aro agents for tho sale Of
Northern Pacific Bonds, nnd for that
reason koop accounts with Jay Cooke
l. Co. But IN tho case of National Banks,
bven in tue country, their balances with that
firm arc likely to be worry sn,all beoatHe tho
National Currency oct requires that the National
Banks shall kocp their rodocmfng agencies (aul
consequently their principal Eastern balnncos)
Eth National Banks. Wo do not imagine,
therefore, that tho amount Of money duo from
lay Cooke l. Co. to Western bankers will 10
noaly as large as ulnny supposo.
Tho groatest dtroot loss that would fall on tho
Wast by the failure Of Jay Cooke i Co. {in case
Mi. shoud nroya to be a total fai1nra instend
only . temporary suspon1ion( would
90 tho depreciation IN tie valuc
of tho SA,ooo,ooo or 45,ooo,ooo OF
Northern Pacific bonds which the farmers of tho
West havo boon M vheed'ea into investing their
earningSln' These bonds have boon bought hs-
most exclusively by pcoplo who aro NOT in COM
me.cial business Of any kind. Tho Northern
Pacific bonds hnyo not, therefore, boon made q
hal. ~ aoo,tt,, far rusno.s o,tar,,.;soa ~ for
oasls .. security 1or business enterprises OF tot
loans Of any ksad. In most casos thcy represent
circulation and ho.rdod away. Tie loss at tho
pt1us.tAt ~ sao nonaa "ouN W ioi1 .oas .uun
The default OF interest, Which will undoubtedly
bo the result OF the failure OF Jay Cooke l. Go.
There are, however, aomo facts of a more gem
eral character In regard to the Northern Pacific
Railroad, and tho connection of Jay Cooke Il
CO, thorcwith, that will assist In estimating tue
Jay Cooke l. Co.
There ia reason to beova that whom Jay
ooko l. Co. undertook the enterprise Of build
Ing tho Northern pacilc, they intended ncyor to
hazardous .au enterprise, They expected
to sell bonds enough to carry on
tho construction Of tho Northern Pacific
and at tho same timo pay the interest Oh the
bonds atroady outstanding Until the road was
completed. It Was OF course understood that
The road was being built into n complete widor-
neaa where thero vas literally no husnosa to
transact except the construction Of tho track.
The road could not, therefore, be expected to
pny its own operating expenses, md portion
Of these would therefore have to be paid by tho
sale Of moro bonda.
In the last four yearae tho Northorn
Pacific Company havo built aud purchased
something pear 1000 miles OF rail-
road, aud in tho same tilno have
issued is belioved near $50 900, coo Of Northern
Pacific bonds. OF nearly 1,oO0 miles Of 1oad
owned by the Company, tho 253 milea Of the
main line from Duluth to Red Riyor will at 1oaHt
pay operating expcnsos; tho zig miles Of the
ridge, aud tho 1856 miles from St. Paul to
Brainori would probably pny considerable moro
than operating expenses. Tint part west Of tho
Reu River could not be expected to pay any con,
siderable part Of its operating e1penaea until
tho road should be completed to the Pacific, mud
until that tilno tho operating expenses OF that
portion as we'll as tho interost on tho
outstanding bonds must be paid from tho pro-
Of bonds stop, the construction Of tho road must
also stops, and tho several hundred milas Of road
having 3 terminus in the Wilderness become
practically worthless. Taking tho 1000 miloB OF
ny, it would probably not more than pay tho cx-
ponae Of operating It, and would not pay
dollar toward the S2, ,o0o, ooo or more OF annual
interest on the r. oustandlng IT. bonds nd
Of Jay Cooke t. Co.. it is matter OF much inter-
est how many OF the f3o, DUO. oo0 OF outstanding