Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1873-09-25
The Jay Cooke Failure.

Great excitement prevailed in all tho
commercial centers of the country nnnn
the announcement of the failure of f fo,,
Cooke & Co, bankers, of New York PHI
adelphia and Washington, Finana III
Agents of the Northern Pacific Railwat i've
issuers Of foreign letters of credit o,o
etc, etc. A tremendous panic ensued ~
Wall street, and stocks fell from ono -
ten per cent.
Prudent business men have predicted
for years thatJay Cooke & Co. would fail
Their enterprises were so daring, Their
scrupulousness so doubtful, their liabili
ties so large, their exterior 80 glitterinr
that among the really heavy men of the
country there has long been a belief that
sooner or later the firm would 90 to ever
lasting smash. Nevertheless, their actnal
suspension when announced was a sur-
prise. They had stood so long under the
Northern Pacific load that even those who
predicted their failure fancied that they
would somehow pull through When
their collapse was announced, there were
probably thousands of business men in All
parts Of the United States and Canada
who exclaimed, simultaneously, IL told
you So"
That the failure is a bad one is very evi
dent, and the question of the moment is
how far other establishments may be in
volved in the ruin, and how far it will
affect the general business of the country
This can only be answered by the expert
ence of the next few days. 1t is not prob
able that many of the National Banks had
balances with Cooke. The firm has been
looked upon with suspicion ever since it
o. hon RI cd no Do "a; 60
and hence did not secure a large line of
country balances.
In the absence of specific information
as to the cause of this failure, the country
viii naturally attribute it to the attempt
by this house to build the Northern Pacific
Railroad through a wilderness, and to Day
interest on rapidly undressing bonded
debt without any income from the road.
expectations of Jay Cooke con
corning the Northern Pacific, he
has failed to obtain any subsidy
the land grant, or any help from Europe,
except perhaps in the way of loans on the
hypothecation of bonds. The sales of
land have been the only source of revenue
with which to meet the interest, and it is
lioDdDit llldt llIC III III HAS DCSu dllcLlDl-
ing to carry the unsold bonds, and to keep
them at par in order to go on with the
building of the road.
The firm Of Jay Cooke & Co. originated
in Columbus, Ohio 1t received its con
sequence in the carly years Of the War as
agent Of the Government under Secretary
Chase for the sale Of public securities.
Under Secretaries McCulloch and Bout
IL !, = H,Jo
McCulloch, after his retirement from
office, became a member of the London
branch of the house under the name of
Jay Cooke, McCulloch & Co. Under the
present Administration, it has continued
to enjoy all the advantages of its con
nection with the Government To it was
committed the first, and subsequently, the
second, Syndicate, by which large profits
were given for exchanging six per cent
bonds into five per cents. That the firm
has enjoyed large credit, because of its
actual and supposed connection with the
Treasury Department, is unquestionable
1t is strongly suspected that this
credit was abused in the sale of $50
bonds" of the Northern Pacific Railway
We do not apprehend that this failure
will lead to anything like a financial
crisis, or cause any serious disturbance in
the business of the country. There will
be a CHATTER of small failures caused i'm
medlately by this one, and a smashing of
crOckery in Wall street produced by the
decline in stocks. But the volume of pri-
vate Indebtedness throughout the country
at the present time is not large The
strlngency OF last autumn and winter led
to vast curtailment of liabilities PEG
pie have since then set their houses in
order. There is nothing to make a gen
eral panic out of.-Chicago Tribune, Sep
tensber 80
A bright little Pottsville ten-year-old
persisted in running barefooted, and upon