Jay Cooke: Financier of the Civil War

Jay Cooke was an American banker who became prominent as the primary financier for causes of the Union military during the US Civil War. Born in Sandusky, Ohio on August 10, 1821, Cooke was named after the first US Supreme Court Chief Justice John Jay.

Cooke attended the local schools in Sandusky. When he was 14, he worked as a clerk in a local store. At 15, he moved to St. Louis, Missouri to work in a wholesale business. He moved to Bloomingville, Ohio when he lost his job due to the Panic of 1837.

After one year, he worked in a packet company in Philadelphia, Pennsylvania. But the packet company failed and Cooke worked for a local hotel as bookkeeper. After many tries as an employee, Cooke’s break came in 1839 when he was hired by the brokerage and banking company E.W. Clark & Company.

Cooke worked his way to the top of E.W. Clark & Company to become a partner just four years through his employment. During that time, E.W. Clark & Company was fortunate to make several significant investments. Among its successful endeavors included financing railroads and lending money to the federal government during the Mexican War. When the company collapsed at the height of the Panic of 1857, Cooke was a wealthy man.

Cooke used his money to start his own banking company on January 1, 1861. Initially, Jay Cooke & Company borrowed $3 million from the Pennsylvania government. The company was successful in its efforts to acquire money for the federal government. The money was used to finance the Northern efforts during the US Civil War. Cooke helped set up a sound fiscal policies to ensure that the government had enough resources to win the war. He was the negotiator for government loans and handled the selling of government bonds.

While the War was going on, Cooke also acted as Ohio’s financial advisor. He also contributed in the development of sound fiscal policies to help the wartime governors, especially those issuing state bonds.

When the Civil War ended, Cooke was able to secure over $3 billion worth of loans for the federal government. He earned the reputation as the “financier of the Civil War”. US was deep in debt after the War but the US currency was stable. US bonds were viewed as responsible investments.

The personal wealth Cooke acquired during the War was used to set up other businesses such iron and coal mining, railroads and life insurance. He was a major figure in the building of the North Pacific Company.