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Full Online Book HomeLong StoriesThe Financier - Chapter 14
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The Financier - Chapter 14 Post by :kostas Category :Long Stories Author :Theodore Dreiser Date :February 2011 Read :605

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The Financier - Chapter 14

The development of Cowperwood as Cowperwood & Co. following his
arresting bond venture, finally brought him into relationship with
one man who was to play an important part in his life, morally,
financially, and in other ways. This was George W. Stener, the
new city treasurer-elect, who, to begin with, was a puppet in the
hands of other men, but who, also in spite of this fact, became a
personage of considerable importance, for the simple reason that
he was weak. Stener had been engaged in the real estate and
insurance business in a small way before he was made city treasurer.
He was one of those men, of whom there are so many thousands in
every large community, with no breadth of vision, no real subtlety,
no craft, no great skill in anything. You would never hear a new
idea emanating from Stener. He never had one in his life. On the
other hand, he was not a bad fellow. He had a stodgy, dusty,
commonplace look to him which was more a matter of mind than of
body. His eye was of vague gray-blue; his hair a dusty light-brown
and thin. His mouth--there was nothing impressive there. He was
quite tall, nearly six feet, with moderately broad shoulders, but
his figure was anything but shapely. He seemed to stoop a little,
his stomach was the least bit protuberant, and he talked commonplaces
--the small change of newspaper and street and business gossip.
People liked him in his own neighborhood. He was thought to be
honest and kindly; and he was, as far as he knew. His wife and
four children were as average and insignificant as the wives and
children of such men usually are.

Just the same, and in spite of, or perhaps, politically speaking,
because of all this, George W. Stener was brought into temporary
public notice by certain political methods which had existed in
Philadelphia practically unmodified for the previous half hundred
years. First, because he was of the same political faith as the
dominant local political party, he had become known to the local
councilman and ward-leader of his ward as a faithful soul--one
useful in the matter of drumming up votes. And next--although
absolutely without value as a speaker, for he had no ideas--you
could send him from door to door, asking the grocer and the
blacksmith and the butcher how he felt about things and he would
make friends, and in the long run predict fairly accurately the
probable vote. Furthermore, you could dole him out a few platitudes
and he would repeat them. The Republican party, which was the
new-born party then, but dominant in Philadelphia, needed your
vote; it was necessary to keep the rascally Democrats out--he could
scarcely have said why. They had been for slavery. They were for
free trade. It never once occurred to him that these things had
nothing to do with the local executive and financial administration
of Philadelphia. Supposing they didn't? What of it?

In Philadelphia at this time a certain United States Senator, one
Mark Simpson, together with Edward Malia Butler and Henry A.
Mollenhauer, a rich coal dealer and investor, were supposed to,
and did, control jointly the political destiny of the city. They
had representatives, benchmen, spies, tools--a great company. Among
them was this same Stener--a minute cog in the silent machinery of
their affairs.

In scarcely any other city save this, where the inhabitants were
of a deadly average in so far as being commonplace was concerned,
could such a man as Stener have been elected city treasurer. The
rank and file did not, except in rare instances, make up their
political program. An inside ring had this matter in charge.
Certain positions were allotted to such and such men or to such
and such factions of the party for such and such services rendered
--but who does not know politics?

In due course of time, therefore, George W. Stener had become
persona grata to Edward Strobik, a quondam councilman who afterward
became ward leader and still later president of council, and who,
in private life was a stone-dealer and owner of a brickyard.
Strobik was a benchman of Henry A. Mollenhauer, the hardest and
coldest of all three of the political leaders. The latter had
things to get from council, and Strobik was his tool. He had Stener
elected; and because he was faithful in voting as he was told the
latter was later made an assistant superintendent of the highways
department.

Here he came under the eyes of Edward Malia Butler, and was slightly
useful to him. Then the central political committee, with Butler
in charge, decided that some nice, docile man who would at the
same time be absolutely faithful was needed for city treasurer, and
Stener was put on the ticket. He knew little of finance, but was
an excellent bookkeeper; and, anyhow, was not corporation counsel
Regan, another political tool of this great triumvirate, there to
advise him at all times? He was. It was a very simple matter.
Being put on the ticket was equivalent to being elected, and so,
after a few weeks of exceedingly trying platform experiences, in
which he had stammered through platitudinous declarations that the
city needed to be honestly administered, he was inducted into
office; and there you were.

Now it wouldn't have made so much difference what George W.
Stener's executive and financial qualifications for the position
were, but at this time the city of Philadelphia was still hobbling
along under perhaps as evil a financial system, or lack of it, as
any city ever endured--the assessor and the treasurer being
allowed to collect and hold moneys belonging to the city, outside
of the city's private vaults, and that without any demand on the
part of anybody that the same be invested by them at interest for
the city's benefit. Rather, all they were expected to do,
apparently, was to restore the principal and that which was with
them when they entered or left office. It was not understood or
publicly demanded that the moneys so collected, or drawn from any
source, be maintained intact in the vaults of the city treasury.
They could be loaned out, deposited in banks or used to further
private interests of any one, so long as the principal was returned,
and no one was the wiser. Of course, this theory of finance was
not publicly sanctioned, but it was known politically and
journalistically, and in high finance. How were you to stop it?

Cowperwood, in approaching Edward Malia Butler, had been
unconsciously let in on this atmosphere of erratic and unsatisfactory
speculation without really knowing it. When he had left the
office of Tighe & Co., seven years before, it was with the idea
that henceforth and forever he would have nothing to do with the
stock-brokerage proposition; but now behold him back in it again,
with more vim than he had ever displayed, for now he was working
for himself, the firm of Cowperwood & Co., and he was eager to
satisfy the world of new and powerful individuals who by degrees
were drifting to him. All had a little money. All had tips, and
they wanted him to carry certain lines of stock on margin for them,
because he was known to other political men, and because he was
safe. And this was true. He was not, or at least up to this time
had not been, a speculator or a gambler on his own account. In
fact he often soothed himself with the thought that in all these
years he had never gambled for himself, but had always acted
strictly for others instead. But now here was George W. Stener
with a proposition which was not quite the same thing as
stock-gambling, and yet it was.

During a long period of years preceding the Civil War, and through
it, let it here be explained and remembered, the city of Philadelphia
had been in the habit, as a corporation, when there were no available
funds in the treasury, of issuing what were known as city warrants,
which were nothing more than notes or I.O.U.'s bearing six per cent.
interest, and payable sometimes in thirty days, sometimes in three,
sometimes in six months--all depending on the amount and how soon
the city treasurer thought there would be sufficient money in the
treasury to take them up and cancel them. Small tradesmen and
large contractors were frequently paid in this way; the small
tradesman who sold supplies to the city institutions, for instance,
being compelled to discount his notes at the bank, if he needed
ready money, usually for ninety cents on the dollar, while the
large contractor could afford to hold his and wait. It can readily
be seen that this might well work to the disadvantage of the small
dealer and merchant, and yet prove quite a fine thing for a large
contractor or note-broker, for the city was sure to pay the warrants
at some time, and six per cent. interest was a fat rate, considering
the absolute security. A banker or broker who gathered up these
things from small tradesmen at ninety cents on the dollar made a
fine thing of it all around if he could wait.

Originally, in all probability, there was no intention on the part
of the city treasurer to do any one an injustice, and it is likely
that there really were no funds to pay with at the time. However
that may have been, there was later no excuse for issuing the
warrants, seeing that the city might easily have been managed much
more economically. But these warrants, as can readily be imagined,
had come to be a fine source of profit for note-brokers, bankers,
political financiers, and inside political manipulators generally
and so they remained a part of the city's fiscal policy.

There was just one drawback to all this. In order to get the full
advantage of this condition the large banker holding them must be
an "inside banker," one close to the political forces of the city,
for if he was not and needed money and he carried his warrants to
the city treasurer, he would find that he could not get cash for
them. But if he transferred them to some banker or note-broker
who was close to the political force of the city, it was quite
another matter. The treasury would find means to pay. Or, if so
desired by the note-broker or banker--the right one--notes which
were intended to be met in three months, and should have been
settled at that time, were extended to run on years and years,
drawing interest at six per cent. even when the city had ample
funds to meet them. Yet this meant, of course, an illegal
interest drain on the city, but that was all right also. "No
funds" could cover that. The general public did not know. It
could not find out. The newspapers were not at all vigilant,
being pro-political. There were no persistent, enthusiastic
reformers who obtained any political credence. During the war,
warrants outstanding in this manner arose in amount to much over
two million dollars, all drawing six per cent. interest, but
then, of course, it began to get a little scandalous. Besides,
at least some of the investors began to want their money back.

In order, therefore, to clear up this outstanding indebtedness
and make everything shipshape again, it was decided that the city
must issue a loan, say for two million dollars--no need to be
exact about the amount. And this loan must take the shape of
interest-bearing certificates of a par value of one hundred dollars,
redeemable in six, twelve, or eighteen months, as the case may be.
These certificates of loan were then ostensibly to be sold in the
open market, a sinking-fund set aside for their redemption, and the
money so obtained used to take up the long-outstanding warrants
which were now such a subject of public comment.

It is obvious that this was merely a case of robbing Peter to pay
Paul. There was no real clearing up of the outstanding debt. It
was the intention of the schemers to make it possible for the
financial politicians on the inside to reap the same old harvest
by allowing the certificates to be sold to the right parties for
ninety or less, setting up the claim that there was no market for
them, the credit of the city being bad. To a certain extent this
was true. The war was just over. Money was high. Investors
could get more than six per cent. elsewhere unless the loan was
sold at ninety. But there were a few watchful politicians not in
the administration, and some newspapers and non-political financiers
who, because of the high strain of patriotism existing at the time,
insisted that the loan should be sold at par. Therefore a clause
to that effect had to be inserted in the enabling ordinance.

This, as one might readily see, destroyed the politicians' little
scheme to get this loan at ninety. Nevertheless since they
desired that the money tied up in the old warrants and now not
redeemable because of lack of funds should be paid them, the only
way this could be done would be to have some broker who knew the
subtleties of the stock market handle this new city loan on 'change
in such a way that it would be made to seem worth one hundred and
to be sold to outsiders at that figure. Afterward, if, as it was
certain to do, it fell below that, the politicians could buy as
much of it as they pleased, and eventually have the city redeem it
at par.

George W. Stener, entering as city treasurer at this time, and
bringing no special financial intelligence to the proposition,
was really troubled. Henry A. Mollenhauer, one of the men who
had gathered up a large amount of the old city warrants, and who
now wanted his money, in order to invest it in bonanza offers in
the West, called on Stener, and also on the mayor. He with
Simpson and Butler made up the Big Three.

"I think something ought to be done about these warrants that
are outstanding," he explained. "I am carrying a large amount
of them, and there are others. We have helped the city a long
time by saying nothing; but now I think that something ought to
be done. Mr. Butler and Mr. Simpson feel the same way. Couldn't
these new loan certificates be listed on the stock exchange and
the money raised that way? Some clever broker could bring them
to par."

Stener was greatly flattered by the visit from Mollenhauer.
Rarely did he trouble to put in a personal appearance, and then
only for the weight and effect his presence would have. He called
on the mayor and the president of council, much as he called on
Stener, with a lofty, distant, inscrutable air. They were as
office-boys to him.

In order to understand exactly the motive for Mollenhauer's
interest in Stener, and the significance of this visit and Stener's
subsequent action in regard to it, it will be necessary to scan
the political horizon for some little distance back. Although
George W. Stener was in a way a political henchman and appointee
of Mollenhauer's, the latter was only vaguely acquainted with him.
He had seen him before; knew of him; had agreed that his name
should be put on the local slate largely because he had been
assured by those who were closest to him and who did his bidding
that Stener was "all right," that he would do as he was told, that
he would cause no one any trouble, etc. In fact, during several
previous administrations, Mollenhauer had maintained a subsurface
connection with the treasury, but never so close a one as could
easily be traced. He was too conspicuous a man politically and
financially for that. But he was not above a plan, in which Simpson
if not Butler shared, of using political and commercial stool-pigeons
to bleed the city treasury as much as possible without creating a
scandal. In fact, for some years previous to this, various agents
had already been employed--Edward Strobik, president of council,
Asa Conklin, the then incumbent of the mayor's chair, Thomas
Wycroft, alderman, Jacob Harmon, alderman, and others--to organize
dummy companies under various names, whose business it was to deal
in those things which the city needed--lumber, stone, steel, iron,
cement--a long list--and of course, always at a fat profit to
those ultimately behind the dummy companies, so organized. It saved
the city the trouble of looking far and wide for honest and
reasonable dealers.

Since the action of at least three of these dummies will have
something to do with the development of Cowperwood's story, they
may be briefly described. Edward Strobik, the chief of them, and
the one most useful to Mollenhauer, in a minor way, was a very
spry person of about thirty-five at this time--lean and somewhat
forceful, with black hair, black eyes, and an inordinately large
black mustache. He was dapper, inclined to noticeable clothing--
a pair of striped trousers, a white vest, a black cutaway coat
and a high silk hat. His markedly ornamental shoes were always
polished to perfection, and his immaculate appearance gave him the
nickname of "The Dude" among some. Nevertheless he was quite able
on a small scale, and was well liked by many.

His two closest associates, Messrs. Thomas Wycroft and Jacob Harmon,
were rather less attractive and less brilliant. Jacob Harmon was
a thick wit socially, but no fool financially. He was big and
rather doleful to look upon, with sandy brown hair and brown
eyes, but fairly intelligent, and absolutely willing to approve
anything which was not too broad in its crookedness and which
would afford him sufficient protection to keep him out of the
clutches of the law. He was really not so cunning as dull and
anxious to get along.

Thomas Wycroft, the last of this useful but minor triumvirate,
was a tall, lean man, candle-waxy, hollow-eyed, gaunt of face,
pathetic to look at physically, but shrewd. He was an iron-molder
by trade and had gotten into politics much as Stener had--because
he was useful; and he had managed to make some money--via this
triumvirate of which Strobik was the ringleader, and which was
engaged in various peculiar businesses which will now be indicated.

The companies which these several henchmen had organized under
previous administrations, and for Mollenhauer, dealt in meat,
building material, lamp-posts, highway supplies, anything you
will, which the city departments or its institutions needed. A
city contract once awarded was irrevocable, but certain councilmen
had to be fixed in advance and it took money to do that. The
company so organized need not actually slaughter any cattle or
mold lamp-posts. All it had to do was to organize to do that,
obtain a charter, secure a contract for supplying such material
to the city from the city council (which Strobik, Harmon, and
Wycroft would attend to), and then sublet this to some actual
beef-slaughterer or iron-founder, who would supply the material
and allow them to pocket their profit which in turn was divided
or paid for to Mollenhauer and Simpson in the form of political
donations to clubs or organizations. It was so easy and in a way
so legitimate. The particular beef-slaughterer or iron-founder
thus favored could not hope of his own ability thus to obtain a
contract. Stener, or whoever was in charge of the city treasury
at the time, for his services in loaning money at a low rate of
interest to be used as surety for the proper performance of
contract, and to aid in some instances the beef-killer or
iron-founder to carry out his end, was to be allowed not only the
one or two per cent. which he might pocket (other treasurers had),
but a fair proportion of the profits. A complacent, confidential
chief clerk who was all right would be recommended to him. It did
not concern Stener that Strobik, Harmon, and Wycroft, acting for
Mollenhauer, were incidentally planning to use a little of the
money loaned for purposes quite outside those indicated. It was
his business to loan it.

However, to be going on. Some time before he was even nominated,
Stener had learned from Strobik, who, by the way, was one of his
sureties as treasurer (which suretyship was against the law, as
were those of Councilmen Wycroft and Harmon, the law of
Pennsylvania stipulating that one political servant might not
become surety for another), that those who had brought about this
nomination and election would by no means ask him to do anything
which was not perfectly legal, but that he must be complacent and
not stand in the way of big municipal perquisites nor bite the
hands that fed him. It was also made perfectly plain to him, that
once he was well in office a little money for himself was to be
made. As has been indicated, he had always been a poor man. He
had seen all those who had dabbled in politics to any extent about
him heretofore do very well financially indeed, while he pegged
along as an insurance and real-estate agent. He had worked hard
as a small political henchman. Other politicians were building
themselves nice homes in newer portions of the city. They were
going off to New York or Harrisburg or Washington on jaunting
parties. They were seen in happy converse at road-houses or
country hotels in season with their wives or their women favorites,
and he was not, as yet, of this happy throng. Naturally now that
he was promised something, he was interested and compliant. What
might he not get?

When it came to this visit from Mollenhauer, with its suggestion
in regard to bringing city loan to par, although it bore no obvious
relation to Mollenhauer's subsurface connection with Stener, through
Strobik and the others, Stener did definitely recognize his own
political subservience--his master's stentorian voice--and
immediately thereafter hurried to Strobik for information.

"Just what would you do about this?" he asked of Strobik, who
knew of Mollenhauer's visit before Stener told him, and was waiting
for Stener to speak to him. "Mr. Mollenhauer talks about having
this new loan listed on 'change and brought to par so that it
will sell for one hundred."

Neither Strobik, Harmon, nor Wycroft knew how the certificates of
city loan, which were worth only ninety on the open market, were
to be made to sell for one hundred on 'change, but Mollenhauer's
secretary, one Abner Sengstack, had suggested to Strobik that,
since Butler was dealing with young Cowperwood and Mollenhauer did
not care particularly for his private broker in this instance, it
might be as well to try Cowperwood.


So it was that Cowperwood was called to Stener's office. And once
there, and not as yet recognizing either the hand of Mollenhauer
or Simpson in this, merely looked at the peculiarly shambling,
heavy-cheeked, middle-class man before him without either interest
or sympathy, realizing at once that he had a financial baby to deal
with. If he could act as adviser to this man--be his sole counsel
for four years!

"How do you do, Mr. Stener?" he said in his soft, ingratiating voice,
as the latter held out his hand. "I am glad to meet you. I have
heard of you before, of course."

Stener was long in explaining to Cowperwood just what his difficulty
was. He went at it in a clumsy fashion, stumbling through the
difficulties of the situation he was suffered to meet.

"The main thing, as I see it, is to make these certificates sell
at par. I can issue them in any sized lots you like, and as often
as you like. I want to get enough now to clear away two hundred
thousand dollars' worth of the outstanding warrants, and as much
more as I can get later."

Cowperwood felt like a physician feeling a patient's pulse--a
patient who is really not sick at all but the reassurance of
whom means a fat fee. The abstrusities of the stock exchange
were as his A B C's to him. He knew if he could have this loan
put in his hands--all of it, if he could have the fact kept dark
that he was acting for the city, and that if Stener would allow
him to buy as a "bull" for the sinking-fund while selling
judiciously for a rise, he could do wonders even with a big issue.
He had to have all of it, though, in order that he might have
agents under him. Looming up in his mind was a scheme whereby
he could make a lot of the unwary speculators about 'change go
short of this stock or loan under the impression, of course, that
it was scattered freely in various persons' hands, and that they
could buy as much of it as they wanted. Then they would wake to
find that they could not get it; that he had it all. Only he would
not risk his secret that far. Not he, oh, no. But he would drive
the city loan to par and then sell. And what a fat thing for
himself among others in so doing. Wisely enough he sensed that
there was politics in all this--shrewder and bigger men above and
behind Stener. But what of that? And how slyly and shrewdly they
were sending Stener to him. It might be that his name was becoming
very potent in their political world here. And what might that
not mean!

"I tell you what I'd like to do, Mr. Stener," he said, after he had
listened to his explanation and asked how much of the city loan he
would like to sell during the coming year. "I'll be glad to
undertake it. But I'd like to have a day or two in which to think
it over."

"Why, certainly, certainly, Mr. Cowperwood," replied Stener,
genially. "That's all right. Take your time. If you know how
it can be done, just show me when you're ready. By the way, what
do you charge?"

"Well, the stock exchange has a regular scale of charges which
we brokers are compelled to observe. It's one-fourth of one per
cent. on the par value of bonds and loans. Of course, I may hav
to add a lot of fictitious selling--I'll explain that to you later--
but I won't charge you anything for that so long as it is a secret
between us. I'll give you the best service I can, Mr. Stener.
You can depend on that. Let me have a day or two to think it over,
though."

He shook hands with Stener, and they parted. Cowperwood was
satisfied that he was on the verge of a significant combination,
and Stener that he had found someone on whom he could lean.

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