Jay Cooke's Gamble: The Northern Pacific Railroad, the Sioux, and the Panic of 1873.

• Author: Kreyche, Gerald F.
• Position: Book review

JAY COOKE'S GAMBLE The Northern Pacific Railroad, the Sioux, and the Panic of 1873 BY M. JOHN LUBETKIN UNIVERSITY OF OKLAHOMA PRESS 2006, 380 PAGES, $29,95

There is something for everyone in this book. It is about railroad robber barons, the world of sleazy high finance, government shenanigans, downright "cooking of the books," Chiefs Sitting Bull and Gall, George Armstrong Custer, and about a man who thought he was ordained to carry on the myth of Manifest Destiny. As a political powerhouse, Jay Cooke was second only to Pres. Abraham Lincoln. He started out with a small banking house, but by dint of honesty and personality, became the "Subscription Agent for National Loan," a title bestowed by Congress. In short, he had sales control for all U.S. war bonds. The Civil War debt amounted to more than $6,000,000,000 and Cooke was to sell over 1,000,000,000 of those. He was so persuasive that the pacifist Quakers even purchased some, believing the money would be used for nonmilitary spending. In high finance, he was second to none, including J.P. Morgan. Cooke became a millionaire many times over but, as a deeply committed Christian, he gave the first 10% of his profits to charitable causes, including $50,000 to help build an Episcopal church.

With the success of the transcontinental railroad completed at Promontory, Utah, on May 10, 1869, and especially the generosity of the government in helping to fund it, some businessmen thought about building a northern railroad from Duluth, Minn., to Puget Sound, Wash. It would be called the Northern Pacific. Cooke was an obvious candidate to get it started. Sometimes a gambler, sometimes very circumspect, Cooke insisted on a thorough-going study as to its feasibility, given little obvious market for it, other than tourism to the Yellowstone area and to facilitate security for the Montana gold and silver fields. The backers hated the delay this caused, but ultimately acquiesced. They also had hoped for an injection of money into the project by the Federal government, but in this they were disappointed, as none was forthcoming. However, the government did grant 50,000,000 acres to the railroad.

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