The Worthington advance. [volume] (Worthington, Minn.) 1874-1908, 1875-04-30
why tho Pelnbina Branch Railroad
is not Completed.


The following was telegraphed to the
Chicago Tribune from Washington on
Saturday the 18th inst:
1.-The fact that some of the Dutch bond
holders are about to bring suit for 10000
tons of iron rails, pledged by Moorhead
to Jay, Cooke & Co., and now held by the
Secretary of the Navy, causes certain
newspapers to revive the old story that
the Secretary Of the Navy has turned his
Department into pawn.broker's shop,
and loaned United States funds to Jay
Cooke & Co., taking old iron as security.
Officers of the Navy Department indorse
the following statement as true account
of the connection Of that Department
with the matter.
When the panic came, Jay Cooke &
Company, needing money urgently to
bridge them over tho impending crash,
obtained loan from the London house
Of Jay Cooke, McCulloch & Company,
giving rs security the warehouse receipts
for the iron rails belonging to the Pe1nbi-
ma Branch Of the St. Paul & Pacific rail-
way. The day after their failure, Nc
Culloch. of the London house, arrived in
this country. He was unaware of the
disaster that had befallen his partner S
firm until he landed. Jay Cooke, McCul-
loch & Co.. Of London, were the financial
agents Of the government. The navy de-
partment had deposited with them 81, $780,.
600 in gold for the use Of their feet in
European waters. The failure of Jay
Cooke & Co., and the rumors that pre-.
vailed in regard to the shaky condition of
Jay Cooke, McCulloch &C.,, of London,
alarmed the navy department., and they
determined to withdraw their deposit.
Hearing Of Mr.. McCulloch's arrival,
Secretary Robeson hastcned to consult
him in the matter, in order to learn what
the chances might be. MIR. McCulloch
said that the firm Was in no danger from
any ordinary run upon it, but, should
such a large withdrawal be attempted at
that time, it would be forced into bank
ruptcy, and, in that event, as the DEPART
ment would not be placed in the position
of preferred creditor, the entire deposit
would probably be lost. On the other
hand, Mr.. McCulloch offered to place in
Secretary Robeson's hands such security
for the entire amount Is would be amply
satisfactory. The Secretary was COMPEL.
ed to adopt the only course that a wise
judgment left open to him, and he con.
sented to let the deposit remain on the
terms named.
Mr.. McCulloch placed in his. hands an
amount OF securities more than covering
the deposit, among others the warehouse
receipts for all the iron rails belonging to
the st.. Paul 4 Pacific railway company,
except those in New York. A short time
subsequently Secretary Robson had oc-
casion to send 100000 to the Naval Pay
master in London, and he accompanied
the remittance with note leaving to the
discretion of that officer whether he
should deposit it with Jay Cooke. McCul'
loch & Co., who continued to be the fiscal
agents of the government, or elsewhere.
The Paymaster made inquiries and cams
to the conclusion that no loss would re.
suit from depositing the remittance with
Jay Cooke, Mccullough 4 Co., but, to
make sure, he demanded from them and
received full security in the remainder oi
the warehouse receipts for the iron rails
that were in store in this city. :. ~ :
Later Mr.. McCulloch took = new part
ner, and organized new firm, and the old
firm of Jay Cooke, McCulloch Il Co
----A ;-+o liquidation. They now pait
of everything except the Navy Depart
ment claim, ,=nd that has been partly reim
bursed. Secretary Robeson still holdl
the securities, warehouse recsipts and I'll
which, 4 sold to-day, would nor, thai
! lealile ~ Slsaaaadl, i. = ,5.:=: