Jay Cooke
| Jay Cooke | |
|---|---|
 |
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| Born |
August 10, 1821 Sandusky, Ohio |
| Died | February 16, 1905 (aged 83) Ogontz, Pennsylvania |
| Occupation | Financier |
Jay Cooke (August 12, 1821 – February 16, 1905) was an American financier who helped finance the Union war effort during the American Civil War and the postwar development of railroads in the northwestern United States. He is generally acknowledged as the first major investment banker in the United States and creator of the first wire house firm.
Cooke was born at Sandusky, Ohio, the son of Eleutheros Cooke and Martha Carswell Cooke. Eleutheros Cooke was a pioneer Ohio lawyer and Whig, a member of the Ohio General Assembly and member of Congress from Ohio in 1831-1833.
In 1838, Cooke went to Philadelphia, where he entered the banking house of E. W. Clark & Co. as a clerk, and became a partner in 1842. He left this firm in 1858. On January 1, 1861, just months before the start of the American Civil War, Cooke opened the private banking house of Jay Cooke & Company in Philadelphia. Soon after the war began, the state of Pennsylvania borrowed $3,000,000 to fund its war efforts.
In the early months of the war, Cooke worked with Treasury Secretary Salmon P. Chase to secure loans from the leading bankers in the Northern cities. (Cooke and his brother, a newspaper editor, had helped Chase get his job by lobbying for him, even though all were former Democrats.)
Cooke's own firm was so successful in distributing Treasury notes that Chase engaged him as special agent to sell the $500 million in "five-twenty" bonds — callable in five years and matured in 20 years — authorized by Congress on February 25, 1862. The Treasury had previously tried and failed to sell these bonds. Promised a sales commission of 0.5 percent of the revenue from the first $10 million, and 0.375 percent of subsequent bonds, Cooke financed a nationwide sales campaign, appointing about 2,500 sub-agents who traveled through every northern and western state and territory, as well as the Southern states as they came under control of the Union Army. Meanwhile, Cooke secured the support of most Northern newspapers, purchasing ads through advertising agencies, and often working directly with editors on lengthy articles about the virtues of buying government bonds. These efforts heralded a particular type of patriotism based on classical liberalist notions of self-interest. His editorials, articles, handbills, circulars, and signs most often appealed to Americans' desire to turn a profit, while simultaneously aiding the war effort. Cooke quickly sold the $500 million in bonds, and $11 million more. Congress immediately sanctioned the excess.
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