Denver labor bulletin., 1917-08-04


government had no means of meeting
extraordinary expenditures except by
disposing of a few million dollars
worth of treasury notes that had been
previously authorized. The president
called upon the states for troops, but
there was little money available for
equipping them. The northern states
in general responded by enlisting men
and by furnishing financial assistance.
The action taken by one state merits
special notice; it not only set an ex-
ample for other states, but it enlisted
the aid of man who was destined to
perform heroic service in plotting the
federal government thru its many
financial difficulties. This man was
Jay Cooke, head of a bank in Phila-
delphia.
In May, 1861, the legislature of
Pennsylvania passed an act authoriz-
ing the sale of $3,00O,000 worth of
per cent war bonds, with a provision
that they must be disposed of at par
Various banks urged the governor to
insist upon the omission of this pro-
vision on the ground that the bonds
could not be sold at par value. These
bankers were thinking in terms of
ordinary financial transactions, but
gay COOht, WIFI Il SOuIlueT 1alIn IN Lne
patriotism of the people prevailed upon
the governor to approve the bill as
it stood. 81 DESIRE" said he, 'the
limit to be placed at par, because 1
believed that l could sell the loan on
patriotic principles more easily than
on a basis of profit and loss" To
Cooke was assigned the task of selling
the bond-a task which he promptly
accepted. Bankers at first shook their
heads and said that the bonds were too
high; Cooke met all their arguments
with the reply that "what we need now
it patriotism, not money making"
Cookies faith in the people was justi-
fled, for in very short time subscrip-
tions more than covered the amount
of the bonds.
When congress in response to Lin
coins summons convened on July a,
1861, the secretary of the treasury,
Chase, made his recommendations for
financial measures. Congress author
lied Chase to borrow not exceeding
$3.50, 100000 in the form of three-year
7.3 per cent treasury notes, or in
twenty-year z per cent bonds. He
chose the former alternative and at
once undertook to dispose of $780,
100000 in 7.3 per cent notes.
Chase was an able secretary of the
y
bankers, he relied for support on large
financial concerns, and they could not
readily absorb so large an emission of
government notes. After taking $780,
100000 worth they informed the sec
retary that "should it not prove
enough we wish to notify you that we
cannot depend upon further aid from
the associated banks" They could
do no more, they said, without endan-
gering the interests of their sub
scribers.
Fortunately, at this juncture, Henry
d. Moore, a mutual friend, called
Chase's attention to what Cooke had
done in selling the Pennsylvania bonds
and expressed the belief that he would
be as successful in disposing of gov
ernment notes. 81 felt" he told Cooke,
"if the same appeal was made to the
patriotism of the people of the coun-
try as had been made to the people of
the state, and the same energy mani
Tested as had been evinced by you in
the negotiation of our state loan, the
result would be the same"
Cooke was summoned to Washington
and on September a, 1861, was COM