Jay Cooke Family
Because the government financing venture was successful, Jay Cooke & Co. opened another banking house in Washington, D.C., in February 1862. It was organized separately from the Philadelphia firm and, in addition to Jay Cooke and William Moorhead, the firm added Jay's brother Henry, and Harris C. Fahnestock, an extremely adept financier, as partners. The Washington house facilitated business with the government. Henry Cooke proved himself an able lobbyist and public relations person for Jay Cooke & Co., and the firm continued its close association with the government throughout the war. By 1865 and the end of the war, business with the government slowed, and Cooke found himself and his employees in need of new work. He decided to develop a large general banking business, which in 1866 led to the establishment of another branch of the business in New York and later in 1870, with increased foreign investment and travel, a house in London. The London house was headed by Hugh McCulloch, former Secretary of the Treasury to both Lincoln and Andrew Johnson.
During 1870, Jay Cooke & Co. became
heavily involved in financing the Northern Pacific Railroad.
Jay Cooke also committed personal finances. Difficult economic
times, overextension of the firm, and the company's complex ties
to the Northern Pacific Railroad brought the downfall of Jay
Cooke & Co. in the autumn of 1873. Cooke's business failure
played a significant role in the Panic of 1873. Cooke made many
efforts to shore up his banking houses and try to settle with
Many of Cooke's partners retired from banking following the firm's failure. Jay Cooke's son-in-law, Charles D. Barney, and Jay Cooke, Jr. formed Chas. D. Barney & Co. in December 1873. Their new business concentrated on trading securities. Later in life, Jay Cooke was able to recover much of the estate that he had lost to creditors during the bankruptcy, and a substantial income. He managed this recovery through his connection with mineral mines in Utah and other successful investments.
Larson, Henrietta M. Jay Cooke: Private Banker. Cambridge: Harvard University Press, 1936.
Morgan et. al. The National Experience. New York: Harcourt Brace Jovanovich, 1989.