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It was a brilliant chance. His genius had worked out the sale of great government loans during
the Civil War to the people direct in this fashion. Why not Northern Pacific certificates? For
several years he conducted a pyrotechnic campaign, surveying the territory in question,
organizing great railway-construction corps, building hundreds of miles of track under most
trying conditions, and selling great blocks of his stock, on which interest of a certain percentage
was guaranteed. If it had not been that he knew little of railroad-building, personally, and that
the project was so vast that it could not well be encompassed by one man, even so great a man
it might have proved successful, as under subsequent management it did. However, hard times,
the war between France and Germany, which tied up European capital for the time being and
made it indifferent to American projects, envy, calumny, a certain percentage of
mismanagement, all conspired to wreck it. On September 18, 1873, at twelve-fifteen noon, Jay
Cooke & Co. failed for approximately eight million dollars and the Northern Pacific for all that
had been invested in it--some fifty million dollars more.
One can imagine what the result was--the most important financier and the most distinguished
railway enterprise collapsing at one and the same time. "A financial thunderclap in a clear sky,"
said the Philadelphia Press. "No one could have been more surprised," said the Philadelphia
Inquirer, "if snow had fallen amid the sunshine of a summer noon." The public, which by
Cooke's previous tremendous success had been lulled into believing him invincible, could not
understand it. It was beyond belief. Jay Cooke fail? Impossible, or anything connected with him.
Nevertheless, he had failed; and the New York Stock Exchange, after witnessing a number of
crashes immediately afterward, closed for eight days. The Lake Shore Railroad failed to pay a
call-loan of one million seven hundred and fifty thousand dollars; and the Union Trust Company,
allied to the Vanderbilt interests, closed its doors after withstanding a prolonged run. The
National Trust Company of New York had eight hundred thousand dollars of government
securities in its vaults, but not a dollar could be borrowed upon them; and it suspended.
Suspicion was universal, rumor affected every one.
In Philadelphia, when the news reached the stock exchange, it came first in the form of a brief
despatch addressed to the stock board from the New York Stock Exchange--"Rumor on street
of failure of Jay Cooke & Co. Answer." It was not believed, and so not replied to. Nothing was
thought of it. The world of brokers paid scarcely any attention to it. Cowperwood, who had
followed the fortunes of Jay Cooke & Co. with considerable suspicion of its president's brilliant
theory of vending his wares direct to the people--was perhaps the only one who had suspicions.
He had once written a brilliant criticism to some inquirer, in which he had said that no enterprise
of such magnitude as the Northern Pacific had ever before been entirely dependent upon one
house, or rather upon one man, and that he did not like it. "I am not sure that the lands through
which the road runs are so unparalleled in climate, soil, timber, minerals, etc., as Mr. Cooke and
his friends would have us believe. Neither do I think that the road can at present, or for many
years to come, earn the interest which its great issues of stock call for. There is great danger
and risk there." So when the notice was posted, he looked at it, wondering what the effect would
be if by any chance Jay Cooke & Co. should fail.
He was not long in wonder. A second despatch posted on 'change read: "New York, September
18th. Jay Cooke & Co. have suspended."
Cowperwood could not believe it. He was beside himself with the thought of a great opportunity.
In company with every other broker, he hurried into Third Street and up to Number 114, where
the famous old banking house was located, in order to be sure. Despite his natural dignity and
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