The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-09-19
BUY
NORTHERN PACIFIC 7-30 BONDS.


:. In view OF the circumstances this sign was IN
ming down tits unfortunate road.
DIDN'T they get speakers and writer's to prate
about the beauties OF the roady" said one. 'You
couldn't 60 anywhere without seeing something
about the darned road. This firm here used to ad-
vertise that 1t was better paying investment
than government bonds, and just as safe. Nothing
would do but that they should advise people or
spare means to invest In IT and what is the conse
quences You can hardly ind clergyman or a
teacher or farmer In the country who doesn't
have some interest in Northern Pacific, and yet
what did 1t all mean9 The railroad Is unable to
sEy-high." 'N '''' ~ ~ - '''' ''A'' ~'''>' ~
Everybody's tongue was wagging, just as bad as
1t could, against Northern Pacific, and some peo-
pie did not hesitate to say that Jay Cooke had not
done the square" thing IN all this matter. For
long time the reporter found that the firm would
about their difficulty, but finally he was invited
is a member OF the New YORK firm, and took things
with an ease which only fnancers can acquire
from long habit One would have thought that
nothing in the world had happened to disturb the
serenity OF Mr.. French. Being both seated the fol-
lowing interview took place.
REPORTER-I want to ask you nothing but what
you are willing to make public.
Mr. FRENcH-Well, you see 1t is difficult just at
failed.
reasons which Immediately brought about the fail
ureY
Mr.. FRENcH-The house was perfectly solvent in
ITSELF but the failure Is due to large loan which
was made to the Northern Pacific Railroad about a
year ago. and which has never been paid. This
large sum OF money not being paid In, we found, on
examination or our accOunts-that 1t was useless
any longer to continue, that stoppage was much
the wiser plan-and so we suspended. The step
was taken on mature consideration, and we were
not absolutely precipitated into the necessity OF
adopting it.
REpoRrEB-It is not true, then, that your refusal
to pay some drafts OF the Northern Pacific Railroad
this morning caused your suspensions
Mr. FRESCH-Certany not. Some drafts for
trivial sums may have been presented, but this
must have been after the failure, and, Of course
we refused to cash them, as we would have done
with any others, and did with great many.
REPORTER-Can ysu give me no statement OF
your liabilities and monetary standingy
Mr. FRENcH-Monetary standing We, OF course
have none now; and as to the liabilities, why, We
have not been able to make our accounts up sufj-
GENTLY at the present early hour. To morrow we
II you come in late IN the afternoon we shall prob
ably have more TO give the HERALD
STATEMENT OF THE BANKING HOUSE.
The reporter then left the Office, but returned,
as invited, later in the day. He was introduced to
a room on the second floor OF the bank, where
were two members Of the firm-Mr. II. @. Fahne-
stock the head OF the house In New YORK, and Mr..
j. A. Garland. The remaining member OF the
New York nrm besides Mr. French, Is Mr.. Pitt
and knows nothing OF the condition OF his house.
Mr. Fahnestock handed the following written
statement to the reporter:-
JAY COOKE a co.'s STATEMENT.
Jay Cooke Co. make the following state.
Jay Cooke Il Co. were the large drawings upon them
by their Philadelphia house aud their own depOsl-
tors during the last fortnight. Both houses have
suffered a large drain upon their deposits In con-
sequence OF the uneasy feeling which has recently
prevailed, and winch has affected more or less ali
houses closely identified with new railroad enter
prises The Philadelphia house had previously
been weakened by large cash advances to the
Northern Pacific Railroad Company, OF winch they
are financial agents. The business OF Jay Cooke,
McCullocn Co., London, Is entirely distinct, and
that house Is perfectly solvent so that 1t Will meet
all its outstanding drafts and letters OF credit
without inconvenience to travellers, and have a
large cash surplus TO apply TO the American house.
me firm OF Jay Cooke Co. anu its members nave
large amounts or real and personal properly upon
which however, they cannot immediately realize.
They are confident depositors will be paid In full
REPoaTER-From TINS statement 1T appears,
then Mr. Fahnestock, that the failure or the Pnla-
dephia house Is the cause Of your downfallY
Mr. les ns op ., nndn rs for
large sums, and all this money went from the
Philadelphia house TO the Golfers OF tne Nortnern
Pacific Railroad. We went on lending money IN
this manner until we could stand 1t no longer. 30
we had to suspend.
REPoRrER-ls 1t true that you have been taxing
the money placed in your bank by depositors TO
lend 1t to the Philadelphia house, which IN turn
loaned It to the Northern paclhcY - ,,s
Mr. FAHNEsToCK-This Is true, quite true. Where
else could we get the money!
REroRrER-can you tell Ene the sum which you
have taken OF the money deposited In your bank
during the past two weeks TO lend IL 70 the
Northern Pacinc2
HEAVY LOANS TO THE NORTHERN PACIFIC.
Ar. F!nNEsTocK-No; cannot tell exactly the
sum- but II Is very large.
REroRrER-How long did you anticipate this sus-
| pensionr
Mr. FAHNEsrocK-we did not anticipate IL at
| a-that Is, we thought we could get over IL, but
since last Monday matters have grown worse. The
failures which have taken place lately precipltated
our danger, until we found that we could stand 1t
no longer.
REpoRTER-Have you any idea OF your liabtiesp
Mr. FAuNBsTOCK-No; not as yet. We shall pre-
pare tatement as soon as possible and give II 10
Inc pubic. 1t may, perhaps, be ready tomorrow
I wish TO state here, however, that the London
house ia perfectly secure. Mr.. jay Cooke, the head
OF the house. Is In Philadelphia. The other partners
in the Philadelphia house are w. q. Moorhead, IL.
a. FahnestOck II. d. Cooke, q. O. Thomas, J. A.
Garland, Pitt Cooke, Jay Cooke, Jr, and f. o.
French. - -
THE QUESTION OF RESUMPTION
RypoRTER-Do you hope to resumeS
Mir FAuNEyroCK-We may; but cannot tell. OF
course IL viii depend on after.deveopmepts Our