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

by M. John Lubetkin

In 1869, Jay Cooke, the brilliant but idiosyncratic American banker, decided to finance the Northern Pacific, a transcontinental railroad planned from Duluth, Minnesota, to Seattle. M. John Lubetkin tells how Cooke’s gamble reignited war with the Sioux, rescued George Armstrong Custer from obscurity, created Yellowstone Park, pushed frontier settlement four hundred miles westward, and triggered the Panic of 1873.

Staking his reputation and wealth on the Northern Pacific, Cooke was soon whipsawed by the railroad’s mismanagement, questionable contracts, and construction problems. Financier J. P. Morgan undermined him, and the Crédit Mobilier scandal ended congressional support. When railroad surveyors and army escorts ignored Sioux chief Sitting Bull’s warning not to enter the Yellowstone Valley, Indian attacks—combined with alcoholic commanders—led to embarrassing setbacks on the field, in the nation’s press, and among investors.

Lubetkin’s suspenseful narrative describes events played out from Wall Street to the Yellowstone and vividly portrays the soldiers, engineers, businessmen, politicians, and Native Americans who tried to build or block the Northern Pacific.

Genres: History, American History, Nonfiction

400 pages, Paperback

First published May 8, 2006

Reviews

[Thomas Isern · Rating 4 out of 5]

At center of Lubetkin's intertwined narrative are the railroad surveys of 1871-73, whereby the Northern Pacific Railroad, the pet project of financier Jay Cooke, sought workable routes across the northern plains. The problem: native resistance, by Hunkpapas and their allies, which harassed survey operations, precipitated several pitched battles, and most significant to Lubetkin's story, dampened and finally quashed investment in the NP, bringing down Cooke. George A. Custer comes to the foreground late in the narrative, not only for his part in survey operations and attendant hostilities, but also because he wrote about them, which development proved good for him, bad for the PR operations of the NP. In general Lubetkin is masterly at dealing with the white agents such as Custer, and at tying together the financial machinations back east with the field operations out west. He is not as good at discussing or understanding what the Indians are up to--what they are trying to do, what their strategies are. These he states, but without evidence or analysis to back up what he says. I suspect there was a high level of awareness and agency among the native combatants, because this was not their first rodeo. I think Lubetkin gets high marks for bringing out the importance of these railroad survey operations to both business and western history. He also builds compelling narrative and sketches intriguing characters, many of them, such as the alcoholic Stanley, tragic.

[Daniel Kleven · Rating 4 out of 5]

A unique intersection of railroad history, national finances, military history--including the first battle in 1873 between Custer and Sitting Bull, three years before "Custer's last stand." Fascinating layers of history here, and I found several important rabbit trails to dig up. In the end I'm not sure I'm completely convinced of Lubetkin's animating thesis: that Custer's report of his battles with the Lakota on the Yellowstone "jolted Wall Street" and was a significant factor in sparking the 1873 panic. Maybe! But it also might be a stretch. When Lubetkin finally lays out this possible causal connection at the end of the book, he is properly modest in his suggestions. Nevertheless, all the material pulled together in support of this thesis is fascinating.

[Patrick · Rating 5 out of 5]

This book is amazing because you have never heard of the book, the author or the story and they are all great. It is the story of the building of the Northern Pacific Railroad. It's a great story in part because it's not the usual, 'we struggled mightily and then we triumphed' sort of story. In fact, this story ends badly for almost everyone. The author is a retired cable company executive but he is smart enough to see a good story and know how to tell it.

[bibliotekker Holman · Rating 4 out of 5]

An interesting book about local history that makes me want to read more. I couldn't help thinking about the symmetry between current and past economic forces pushing the building of railroads and pipelines, wondering what has really changed.

[Kristi Thielen · Rating 5 out of 5]

Wealthy banker Jay Cooke’s plan to finance the Northern Pacific Railroad from Duluth to Seattle was beset with every problem imaginable: construction delays, mismanagement by a rogue’s gallery of corrupt or incompetent underlings and the financial panic of 1873, largely caused by Cooke himself. He was bankrupted by the affair, lost his lavish home and lived the rest of his life under his daughter’s roof.

It wasn’t supposed to be like this for a man of Cooke’s stature; rich, well-connected and with powerful political acquaintances that included President Ulysses S. Grant. And didn’t the country need railroads? And wasn’t the land on which the Northern Pacific was to travel include perfect places for settlement?

The project’s surveyors on reaching the Yellowstone Valley, ran afoul of Sitting Bull, who warned them to go no farther. An army escort was called for and who should be selected to lead it but the dubious George Armstrong Custer. His efforts failed to help the project much, but he managed to massage his exploits for maximum public attention.

Cooke himself factors into little of the book’s action and that is not due to Lubetkin, who writes skillfully. Cooke was largely remote from the entire project, which made a bad situation even worse.

The book ends with a recounting of the subsequent lives of the major players. Sadly, many were either financially or emotionally broken by the entire endeavor and few lived well or happily thereafter.

[Curt Rude · Rating 5 out of 5]

Amazing story that never gives up on the search for the truth. This material was well researched. Book was fully illustrated with photo's and insightful postscript. The soldiers from both sides of the Civil War seemed to have had their share of problems with alcohol and led me to believe perhaps PTSD haunted these souls long before there was a name for it. The question of why Harris C. Fahnestock did it was not answered and never will be. It had to have something to do with ego and greed.

[Max Grogg · Rating 4 out of 5]

Incredible lay well researched

[Susan · Rating 5 out of 5]

See my review at Reading World.