Helena weekly herald. [volume] (Helena, Mont.) 1867-1900, 1874-01-29
Helena, Montana, Thursday, January 20, 1874.


\ Poor Prospect for Creditors.
The Northern Pacific Railroad the
Sole Origin Of the Fallure-Ihc Firm
Ralncd by Trying to Uphold the
Market for the Railroad IsOnd~-ln-
diviNual fortunes of thc Partners.
Tror, Special Correspondent OF the y. u Tribune.
PHILADELPHIA, December -. - Public
opinion in financial circles has settled upon
- cents OH the dollar as the figure which the
estate OF Jay Cooke l. Co. will probably
yield its creditors if closed within a year, un-
der the provisions Of the bankrupt law. If 4
longer time can be taken for its liquidation,
and if there should be II rebound from the
depression of the crisis, Il much larger per-
ccut.gc would be obtained About half of
the entire assets Of the firm are in the obi
cations Of tie Northern Pacific Railroad,
which, it thrown upon the market ut once
ana in Il body, would scarcely bring a nom
inal price. Some small transactions in North
crn Pacific bonds were reported few days
ago to have been made on the stock market
ut - and 2?3, but these are suspected not to
have been genuine sales. Many of the large
creditors are opposed to the immediate sale
of the bonds and other obligations Of the
road held by the firm, on the ground that
nearly the entire amount would be sacrificed.
1t is suggested by some that all the assets of
the firm, with the exception OF the Northern
Pacific securities, should be converted into
cash, and a dividend declared with the pro-
ceeds: and that the Northern Pacific secur-
tiles, put in the form of bonds (Which would
soon be due, inasmuch as the firm held bonds
as the collatcrals for the money lent to the
road), should then be distributed pro rata
among the creditors. In this way, creditors
who still have faith in the future of the rail-
road, and believe it will recover from its pre-
sent embarrassments, could hold their bonds,
and get better price for them than the re-
ceiver or trustees could if the whole amount
were thrown by them upon the market.
An examination of the assets of the bank
rup; firm makes it more than ever evident
that the Northern Pacific was the weight that
sunk them. Their contract with the COM
pany gave them - per cent. for placing the
loan. They got the bonds at 50, and sold
them at par Ii they lad succeeded in
dlsposing OF the whole loa before the panic
came. they would have made Il colossal for
tune from the transaction. AS it was, they
neoI rot have suffered from the want of con-
Guence felt by the public in tle success of the
enterprise. if they had confined their conncc.
ton with it to an agency business, ana nad
not supported it with their OVID money and
that of their depositors. But their enthusi-
astic faith in the undertaking led them to en-
bask more and more in it, and then, when
ruin threatened it, they put still more in it to
save what they had before invested and so it
went on until the final collapse. TO sell the
bonds it was necessary to push forward the
building of the road and arouse popular
ont huc q
bond sales did not yield funds enough to do
this, so Jay Cook s. 20. advanced their own
money first, and then the money Of other
people entrusted to their keeping, and took
the railroad bOnds as security. After while
the confidence of the public began to abate
instead of increase. Personal friends of the
firm who had been persuaded into purchasing
tie bonds, wanted to get rid of them, and the
firm. to demonstrate their continued faith in
the enterprise, had to buy them back. Other
people threatened to throw their bonds on
the market, which would assuredy have
stopped any further sale at par. Some of
these the firm bought, and to some of the
holders they lent money, taking the bonds as
collaterals TO what extent they purchased
bonds cannot be ascertained, but among their
assets appear over $500, 900 held as collater-
ais for loans. of which 5000 went to a
former Official of the House of Representa-
tives generally reputed to have given great
in lobbying the land grant for the
road through Congress. From the day when
the firm began to buy bonds and make loans
upon them their doom was certain. Their |
subsequent efforts to save themselves was
only rowing up stream while the current was
carrying them steadily and swiftly into the
whirlpool of bankruptcy.
1t is stated in financial circles that Jay
Cooke had no property invested in the name
Of members of his family on which he can
fall back. Dir. Moorhead is not so BADLY off.
The costly house in which he lives worth,
It is said, $500, 1000 is the property of his
wife, and he is reported to have given
: $4,000 each to his daughters, long before
he firm was threatened with bankruptcy. 1t
S believed that Henry D. Cooke, who is ac-
counted more prudent man than the head
IF the firm, made some provision for his
'amily in the days of his prosperity. Pitt
Cooke has small fortune in the name of his
wife. which was hers before marriage. OF
he resources of the other members Of the
irm there are no reports.
- {" <DA - l------
The Danger Of ~edsaiiyeS
The Papular Science Monthly gives this
warning on the important matter of using Sc