Wednesday, October 17, 2012

Hustling Northerners to Save the Union by Bernhard Thuersam

Hustling Northerners to Save the Union


Antebellum and wartime financier Jay Cooke allowed Lincoln to sustain his war upon the American South.  Cooke's war-bond sales methods lend credence to Dr. Johnson's 1775 quip that "patriotism is the last refuge of a scoundrel."  While Americans seeking independence fought and died, he made millions.

Bernhard Thuersam, Chairman

North Carolina War Between the States Sesquicentennial Commission

"The Official Website of the North Carolina WBTS Sesquicentennial"

Hustling Northerners to Save the Union:

The Credit Mobilier scandal…brought on, or at least hastened, the panic of 1873 and turned the greatest American financier of the era into a bankrupt. This was Jay Cooke. At the time of the crash he was engaged in financing the second transcontinental railroad, the Northern Pacific.

[In the past] He showed fine judgment in his promotion of canals, then of railroads. He did well with loans to the government during the Mexican War. Then the Civil War gave him his big chance and he took it famously.  In 1861, the State of Pennsylvania wanted to sell a large bond issue to finance its war effort. No banker but Jay Cooke would touch it. He sold the issue quickly, with a rousing appeal to patriotism.  It was the first bond issue ever sold in that manner in the United States.

Noting his success, the federal government asked Cooke for his help. Moving his office to Washington…..Cooke organized a spectacular country-wide campaign to sell federal war bonds to the public.  He engaged brass bands. He hired spread-eagle speakers.  He caused hundreds of thousands of flags to be displayed at bond rallies.

His salesmen worked on commission and were not turned loose until they had been thoroughly indoctrinated with the equivalent of pep talks and had learned at least ten ways of making non-buyers look and feel like traitors.  Jay Cooke, in short, set the American, or rather the Union, eagle to screaming for money.  He disposed of the bond issue of 1861, and of many more that followed. They amounted in four years to nearly three billion dollars.

What Cooke had done was to invent and bring to the management of national finance a wholly new technique – the drive.  With little modification it has been used ever since.  The boys in blue must be supported by fighting dollars.

From his immense commissions on bond sales and his many other activities, Cooke emerged at war's end as the greatest banker in the country. "On the day Richmond fell, Cooke marked out the lines of a pretentious country house that was to cost one million dollars [with] an Italian garden facing a wall built to resemble "the ruined castle of some ancient nobleman."  This was the fifty-two room palace named Ogontz. Here he entertained, among others, President Grant, on whom he showered fine cigars and a plentitude of whiskey and wine.

Cooke dazzled Grant as he dazzled most contemporary Americans. He exemplified, said a critic, all of the substantial upper middle-class virtues of a people "newly given to the worship of a sterile money economy."

One might call him also a vulgarian of money; placed in his own era, being a rich vulgarian merely made him a genuine great man.  More than once, editorial writers and speakers coupled Cooke's name with Lincoln and Grant."

(The Age of the Moguls, Stewart H. Holbrook, Doubleday & Company, 1953, pp. 51-52)