Dirt Cheap Land
If a person can acquire enough dirt cheap land and hang on to it for a long enough period of time, it would be literally impossible to not make a substantial sum of money on the investment. In order to understand this concept better, it would be important to read the fascinating life story of Mr. Jay Cooke.
Jay Cooke was born in 1821 and eventually opened a banking house, Jay Cooke & Co., in Philadelphia. During the Civil War, he was the most prominent financial backer of the northern government and the Union army. He became known as the “Financier of the Civil War.” It was his railroad dealings after the Civil War, however, that made him more of an historical figure.
In the late 1860s, Cooke became involved with the Northern Pacific Railroad. The plan was to build a railroad from Duluth, Minnesota to the Pacific Northwest. Cooke agreed to take over the financing of this enterprise by selling enough bonds, backed by a 50-million-acre land grant provided by the federal government, to pay for the construction of the railroad. If any private individual in American history ever had control over so much dirt cheap land, it was Jay Cooke.
Cooke first personally acquired hundreds of lots in Duluth and then started marketing the railroad bonds all over the United States and Europe. Sadly, the timing was terrible, as the business climate turned cold. The economy was shaken by Jay Gould’s attempt to corner the gold market; a fire broke out in Chicago, leveling three-quarters of the city; another fire soon erupted in Boston, destroying its commercial center; and the Franco-Prussian War ignited in Europe. The financial Panic of 1873 followed, resulting in the collapse of the Jay Cooke & Co. banking empire. Soon thereafter, Jay Cooke went bankrupt.
However, a statement Jay Cooke made several years before proved exceedingly prophetic: “There is not the slightest probability of there being any cessation in the legitimate demand for land unless the world comes to an end.” Well, the world didn’t come to an end and the hundreds of lots Jay Cooke purchased in Duluth back in the late 1860s became very valuable, and he regained substantial wealth. Cooke proved that dirt cheap land will always produce a profit; it’s just a matter of timing!