Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-11-12
GREAT WAR DEBTS.
How Jay Cooke Came to the Aid Of
Government in the Civil War Crisis

aOW Jay SooAo Sduo " LILO <AAu Va
Government in the Civil War Crisis
From Ellis Paxson Oberholtzers Jay Cooke and
the Financing OF the Civil War. In the No'em
II the time ever comes when the history
of wars shall be written on their financial
side, 1t will be more clearly understood how
much armies and navies, too often made
the fulcrum Of every calculation. must de-
pend upon the energy. determination and
strategy displayed in assembling the great
sums Of money needed in modern warfare
The world has grown larger in many ways.
but forty years does not make Jay Cookies
task seem the less gigantic. France sue
cumbed to Prussia In 1871. after having in
creased her debt about q Thousand million
dollars, exclusive of the great indemnity
Of one thousand millions moro which Bis
mark exacted Of her and which. the French
representatives declared at the peace nego-
tiations exceeded the total amount of
money in circulation In the entire world. To
the French. the whole cost of the war and
its subsequent events. with the indemnity,
was about eighteen hundred and fifty mill
lion dollars Of indebtedness.
Russia and Japan came to the end of their
recent war after Russia had added about
SOC, 600 600 to her debt. sum which, of
course, takes no account Of her vanished
navy or of many losses which later will be
carried into the general fund of debt. Ac-
cording to the figures supplied by the jap
anese embassy at Washington Japan spent
about 65O.OOO,0O0.
These sums seem great, but the Ameri-
can civil war added to the debt of the
Union nearly 81 500. 100000. exclusive of all
that could be obtained by heavy ordinary
and extraordinary taxes We raised in five
years. by long loans and virtually without
foreign aid, almost as great a sum as Great
Britain borrowed and put to her national
account between the years 1893 and 1916.
nprind nj w
Napoleon and her second war with the
United States.
Besides all this, there were the debts of
the loyal states and municipalities, as we'll
as a great mass of obligations which never
were and never will be paid. representing
the pecuniary sacrifice Of the people of the
south. Indeed, the most careful and expert
Of statisticians cannot compute the full
money cost OF the civil war.
The vast expenditures Of these years
could not be met by any methods known
to the government of the United States.
Robert Morris was accounted to have
Washington $4,000 for his operations
around Trenton, and borrowed $2O, 900 from
Rochambeau to set the ragged continental
army before Yorktown. Stephen Girard
the government during the war of 1872. and
Enoch w. Clark and Jay Cooke of the
same city, procured few millions to aid
the government in waging Its unrighteOuS
But this was as nothing in comparison
with the great five-twenty loan and the
seven-thirty loan which. in the civil war,
Jay Cooke placed for Secretaries Chase,
Fessenden and McCulloch. and the subsid-
larry operations which he undertook for the
government He sold bonds and treasury
notes when the department and the SUBJ
treasures could not sell them, just as he
could catch fish where others angled in
vain. He surpassed all other bankers and
brokers whom the secretaries tried and
they were always forced to return to him
as the one man who could draw from the
people the great sums daily needed to man.
age the war.
The unalterable foe Of the reputation of
any of the debt which he had been instru-
mental in distributing among the people,
Jay Cooke was both a wholesome and a
potent influence in political and financial
circles after the war had ended He ad-
vocated the early conversion of 6 per cent
bonds into issues bearing a lower rate of
interest, and certainly would have effected
his funding Of the debt il he had been per-
mitted to undertake 1t. What he did in this
line under Secretary Boutwell,. through the
famous Syndicate "a word which was
brought into the language to describe this
operation), was well done, after envlous
rivals had first been tried. and had failed to
perform the service for the treasury