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

Jay Cooke, renowned for his bond sales during the Civil War that enabled the Union to outlast the Confederacy, was inspired by the explorations of Lewis and Clark and by his belief that God had chosen him to spread civilization, to build a transcontinental railroad across the northern plains. This task defied conventional wisdom because the region lacked population centers enabling immediate profits. In Jay Cooke's Gamble, Lubetkin, a retired cable television executive now devoting his energies to the study of history, relates Cooke's efforts to finance railroad building and gain government support, and the difficulties he faced due to inept and corrupt officials who undermined his work. Increasing demands on his banking firm as more and more funds were committed to the Northern Pacific eventually led to the insolvency of Jay Cooke & Associates, ushering in the Panic of 1873.

The efforts from 1871 to 1873 by Northern Pacific surveyors to locate the best route for the railroad between the Missouri River in North Dakota and the Yellowstone River in Montana are central to Lubetkin's narrative. The Sioux, determined to prevent the railroad's penetration of their lands, repeatedly attacked the surveying parties, and increasingly large military escorts were needed. In his discussion of these events, Lubetkin carefully examines the decisions and actions by commanders assigned to escort duty, such as Eugene M. Baker, David S. Stanley, and George A. Custer. Those responsible for decisionmaking frequently quarreled, and all too often their actions were impaired by too much drinking. Despite these difficulties, the army successfully protected the surveyors as they located the shortest route for the railroad. Still, according to Lubetkin, the negative publicity generated by Indian fights (the most damaging reports being authored by Custer) caused investors to stop purchasing Cooke's railroad bonds, and construction beyond Bismarck was halted.

Lubetkin's narrative is compelling and his careful assessment of the army's activities during the Yellowstone surveys between 1871 and 1873 is thorough and objective. Skillfully linking these military actions to nineteenth-century railroad building and the financial shenanigans of the "robber barons" makes the story even more fascinating. Although some historians might conclude that other events amid the myriad of problems besetting Cooke were more important for explaining the collapse of his financial empire than the negative publicity generated by Indian fights, there is no denying the latter played an important role. Lubetkin's intriguing and informative narrative will be of interest to general readers and scholars alike.