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

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.

Surveying work started with protection from the Army, for the route ran roughshod over Indian territory and even a number of their reservations. Sitting Bull issued a warning against the project. Confederate Civil War Cavalry general Tom Rosser was the chief engineer for one of the surveys. He and Custer were old friends from West Point, before Rosser resigned to fight for the South. The two met on the battlefield and now again in the North with the proposed railroad. Custer was called from his Reconstruction duties in the South to protect the civilians on the project and was happy to have the chance to fight again--this time against Indians.

It was difficult to find a good route for the railway, as lakes, bogs, mud, and river crossings made progress difficult. The weather in winter was another factor, both for the surveyors and the troops guarding them. Worry about Indian attacks hurt morale and the project struggled mightily.

Despite an obvious conflict of interest, the president of the Northern Pacific, Gregory Smith, also was president of an Eastern Railroad and somehow siphoned off sums from the former to the latter. The generals who headed the soldiers had some serious defects. For instance, Gen. Joseph Whistler was more interested in hunting antelope and playing poker than in making advances on the survey. Another, Gen. David Stanley, was such a heavy drinker that sometimes he was incapacitated, causing further delays. Given these and other obstacles, the railroad venture was doomed and met its coup de grace with the financial panic of 1873. Not even Cooke could stop that.

Interestingly enough, the author of this book is not a historian as such, but a retired cable television executive. However, he has written other books and has done his research carefully on this one. Historians of the West, such as Robert M. Utley, give high praise to this publication. It is well deserved.

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