Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1873-09-25
LETTER FROM PHILADELPHIA.

SATURDAY EVENING, Sept 20, 1873.
To the Editor Of the Journal:
The excitement that has taken possession of
our city this week has equalled the wild ex-
element of war times almost. Our money
centre, Third street, was thrown into a per-
feet uproar about II o'clock on Thursday
morning by the closing of the ponderous iron
doors of the banking house of Jay Cooke &
Co., and the announcement that it had sus-
pended. The news spread with great rapidity
and merchants and business men hurried to
the street to ascertain particulars. The fol-
lowing was found posted on the door.
"We regret to be obliged to announce tina,
owing to unexpected demands on us, our fru
has been obliged to suspend payment. In a few
days We will be able to present a statement Il
our creditors, until which time we must asi
for their patient consideration. We believ
our assets to be largely in excess Of our liabil
ities." signed,
Jay Cooke 6 Co.
Mr.. Cooke authorized the statement that tn
suspension was only temporary and tina
every creditor of the firm should be fully sat
isfed, to promote which, the private fortunes
of the members of the firm should be sacri.
feed if necessary. This assurance gave con-
fdence to many of the depositors gathered on
the street, and expressions of satisfaction as
to the safety of their money behind those iron
doors were freely given. The private fortunes
of each of the members of this firm are known
to be immense.
The New York house was the first to close
it's doors, and made the following statement
''The immediate cause of the suspension of
Jay Cooke & Co., were the large drawings
upon them by their Philadelphia house, and
their own depositors during the last fortnight.
Both houses have suffered large drain upon
their deposits in consequence of the uneasy
feeling which has recently prevailed. and
which has affected, more or less, all houses
closely identified with new railroad enterpris-
e.. The Philadelphia house had previously
been weakened by large cash advances to the
Northern Pacific Railroad Company Of which
they are financial agents. The business of
Jay Cooke, McCulloch & Co., London, is en-
tirely distinct and that house is perfectly SOL
vent, so that it will meet all its outstanding
drafts and letters Of credit without inconver-
fence to travellers, and have large cash sur
plus TO apply to the American house. The
firm OF Jay Cooke & Co., and its members
have large amounts of real and personal prop :
erty upon which however they cannot immedi-
ately realize. They are confident depositors
will be paid in full"
From this statement it is plainly seen that
the Northern Pacific Railroad Company, of
which Hon. X. d. Rice OF your city is Vice
President, on the Pacific coast, is the cause
of the downfall of this great house and of the
others that fell with it. Jay Cooke & Co.
have had this road like an elephant on theil
hands for some time, and their great financia
power and prestige has alone sustained tn,
road thus far. 1t is intended to extend from
Lake Superior to Puget Sound, eighteen hun
dred miles, with branch two hundred miles
ID Portland, Oregon. At the end of the pres
ent year there should have been in operation
about five hundred and sixty miles of road
The land grant was about forty seven millior
acres of alternate sections of land for forty
miles on each side of the line of road. Col
umns of your paper might be taken up in Civ
ing interesting accounts of this gigantic enter
prese, of its lands and bonds, and stocks, &c.
They had recently received from Cooke &
Co., fifteen million dollars advanced to them
on bonds which were sent to Europe and could
not be disposed of, this being the immediate
cause of the suspension.
Immediately after the closing OF the doors
OF Cooke Co., here in Philadelphia, Il. w.
Clarke Co. closed. This house is the third
banking house Of our city. The house of
Drexel Co., being second if not equal to
Cooke Co., in the confidence Of the people
Inns nao the effect Of precipitating a panic
upon every one at once. The statement of
this house, as well as Of most of the numer.
Gus other houses that were obliged to suspend.
was to assure the public that twas only tenn.
porsry and entirely owing to the sudden de.
mand made upon them from fright and panic
which prevailed, and to meet which they were
unprepared. Opposite 4. w. Clarke & Co.,
on Third street, above Chestnut street, stands
the immense stone banking house of D-exel
Co., who have recently purchased the most
valuable lot of ground in New York City and
erected thereon the most magnificent banking
house in the world. This firm has unlimited
confidence from the public and no apprehen.