_ In the meantime Cowperwood, from what he could see and hear, was
becoming more and more certain that the politicians would try to
make a scapegoat of him, and that shortly. For one thing, Stires
had called only a few days after he closed his doors and imparted
a significant bit of information. Albert was still connected with
the city treasury, as was Stener, and engaged with Sengstack and
another personal appointee of Mollenhauer's in going over the
treasurer's books and explaining their financial significance.
Stires had come to Cowperwood primarily to get additional advice
in regard to the sixty-thousand-dollar check and his personal
connection with it. Stener, it seemed, was now threatening to
have his chief clerk prosecuted, saying that he was responsible
for the loss of the money and that his bondsmen could be held
responsible. Cowperwood had merely laughed and assured Stires
that there was nothing to this.
"Albert," he had said, smilingly, "I tell you positively, there's
nothing in it. You're not responsible for delivering that check
to me. I'll tell you what you do, now. Go and consult my lawyer--
Steger. It won't cost you a cent, and he'll tell you exactly what
to do. Now go on back and don't worry any more about it. I am
sorry this move of mine has caused you so much trouble, but it's
a hundred to one you couldn't have kept your place with a new city
treasurer, anyhow, and if I see any place where you can possibly
fit in later, I'll let you know."
Another thing that made Cowperwood pause and consider at this time
was a letter from Aileen, detailing a conversation which had taken
place at the Butler dinner table one evening when Butler, the elder,
was not at home. She related how her brother Owen in effect had
stated that they--the politicians--her father, Mollenhauer, and
Simpson, were going to "get him yet" (meaning Cowperwood), for some
criminal financial manipulation of something--she could not explain
what--a check or something. Aileen was frantic with worry. Could
they mean the penitentiary, she asked in her letter? Her dear lover!
Her beloved Frank! Could anything like this really happen to him?
His brow clouded, and he set his teeth with rage when he read her
letter. He would have to do something about this--see Mollenhauer
or Simpson, or both, and make some offer to the city. He could
not promise them money for the present--only notes--but they might
take them. Surely they could not be intending to make a scapegoat
of him over such a trivial and uncertain matter as this check
transaction! When there was the five hundred thousand advanced by
Stener, to say nothing of all the past shady transactions of former
city treasurers! How rotten! How political, but how real and
dangerous.
But Simpson was out of the city for a period of ten days, and
Mollenhauer, having in mind the suggestion made by Butler in regard
to utilizing Cowperwood's misdeed for the benefit of the party,
had already moved as they had planned. The letters were ready and
waiting. Indeed, since the conference, the smaller politicians,
taking their cue from the overlords, had been industriously
spreading the story of the sixty-thousand-dollar check, and insisting
that the burden of guilt for the treasury defalcation, if any, lay
on the banker. The moment Mollenhauer laid eyes on Cowperwood he
realized, however, that he had a powerful personality to deal with.
Cowperwood gave no evidence of fright. He merely stated, in his
bland way, that he had been in the habit of borrowing money from
the city treasury at a low rate of interest, and that this panic
had involved him so that he could not possibly return it at present.
"I have heard rumors, Mr. Mollenhauer," he said, "to the effect that
some charge is to be brought against me as a partner with Mr. Stener
in this matter; but I am hoping that the city will not do that, and
I thought I might enlist your influence to prevent it. My affairs
are not in a bad way at all, if I had a little time to arrange
matters. I am making all of my creditors an offer of fifty cents
on the dollar now, and giving notes at one, two, and three years;
but in this matter of the city treasury loans, if I could come to
terms, I would be glad to make it a hundred cents--only I would
want a little more time. Stocks are bound to recover, as you know,
and, barring my losses at this time, I will be all right. I
realize that the matter has gone pretty far already. The newspapers
are likely to start talking at any time, unless they are stopped
by those who can control them." (He looked at Mollenhauer in a
complimentary way.) "But if I could be kept out of the general
proceedings as much as possible, my standing would not be injured,
and I would have a better chance of getting on my feet. It would
be better for the city, for then I could certainly pay it what I
owe it." He smiled his most winsome and engaging smile. And
Mollenhauer seeing him for the first time, was not unimpressed.
Indeed he looked at this young financial David with an interested
eye. If he could have seen a way to accept this proposition of
Cowperwood's, so that the money offered would have been eventually
payable to him, and if Cowperwood had had any reasonable prospect
of getting on his feet soon, he would have considered carefully
what he had to say. For then Cowperwood could have assigned his
recovered property to him. As it was, there was small likelihood
of this situation ever being straightened out. The Citizens'
Municipal Reform Association, from all he could hear, was already
on the move--investigating, or about to, and once they had set
their hands to this, would unquestionably follow it closely to the
end.
"The trouble with this situation, Mr. Cowperwood," he said, affably,
"is that it has gone so far that it is practically out of my hands.
I really have very little to do with it. I don't suppose, though,
really, it is this matter of the five-hundred-thousand-dollar loan
that is worrying you so much, as it is this other matter of the
sixty-thousand-dollar check you received the other day. Mr. Stener
insists that you secured that illegally, and he is very much wrought
up about it. The mayor and the other city officials know of it
now, and they may force some action. I don't know."
Mollenhauer was obviously not frank in his attitude--a little bit
evasive in his sly reference to his official tool, the mayor; and
Cowperwood saw it. It irritated him greatly, but he was tactful
enough to be quite suave and respectful.
"I did get a check for sixty thousand dollars, that's true," he
replied, with apparent frankness, "the day before I assigned. It
was for certificates I had purchased, however, on Mr. Stener's
order, and was due me. I needed the money, and asked for it. I
don't see that there is anything illegal in that."
"Not if the transaction was completed in all its details," replied
Mollenhauer, blandly. "As I understand it, the certificates were
bought for the sinking-fund, and they are not there. How do you
explain that?"
"An oversight, merely," replied Cowperwood, innocently, and quite
as blandly as Mollenhauer. "They would have been there if I had
not been compelled to assign so unexpectedly. It was not possible
for me to attend to everything in person. It has not been our
custom to deposit them at once. Mr. Stener will tell you that,
if you ask him."
"You don't say," replied Mollenhauer. "He did not give me that
impression. However, they are not there, and I believe that that
makes some difference legally. I have no interest in the matter
one way or the other, more than that of any other good Republican.
I don't see exactly what I can do for you. What did you think I
could do?"
"I don't believe you can do anything for me, Mr. Mollenhauer,"
replied Cowperwood, a little tartly, "unless you are willing to
deal quite frankly with me. I am not a beginner in politics in
Philadelphia. I know something about the powers in command. I
thought that you could stop any plan to prosecute me in this matter,
and give me time to get on my feet again. I am not any more
criminally responsible for that sixty thousand dollars than I am
for the five hundred thousand dollars that I had as loan before
it--not as much so. I did not create this panic. I did not set
Chicago on fire. Mr. Stener and his friends have been reaping some
profit out of dealing with me. I certainly was entitled to make
some effort to save myself after all these years of service, and
I can't understand why I should not receive some courtesy at the
hands of the present city administration, after I have been so
useful to it. I certainly have kept city loan at par; and as for
Mr. Stener's money, he has never wanted for his interest on that,
and more than his interest."
"Quite so," replied Mollenhauer, looking Cowperwood in the eye
steadily and estimating the force and accuracy of the man at their
real value. "I understand exactly how it has all come about, Mr.
Cowperwood. No doubt Mr. Stener owes you a debt of gratitude, as
does the remainder of the city administration. I'm not saying
what the city administration ought or ought not do. All I know is
that you find yourself wittingly or unwittingly in a dangerous
situation, and that public sentiment in some quarters is already
very strong against you. I personally have no feeling one way or
the other, and if it were not for the situation itself, which looks
to be out of hand, would not be opposed to assisting you in any
reasonable way. But how? The Republican party is in a very bad
position, so far as this election is concerned. In a way, however
innocently, you have helped to put it there, Mr, Cowperwood. Mr.
Butler, for some reason to which I am not a party, seems deeply
and personally incensed. And Mr. Butler is a great power here--"
(Cowperwood began to wonder whether by any chance Butler had
indicated the nature of his social offense against himself, but
he could not bring himself to believe that. It was not probable.)
"I sympathize with you greatly, Mr. Cowperwood, but what I suggest
is that you first See Mr. Butler and Mr. Simpson. If they agree
to any program of aid, I will not be opposed to joining. But apart
from that I do not know exactly what I can do. I am only one of
those who have a slight say in the affairs of Philadelphia."
At this point, Mollenhauer rather expected Cowperwood to make an
offer of his own holdings, but he did not. Instead he said, "I'm
very much obliged to you, Mr. Mollenhauer, for the courtesy of
this interview. I believe you would help me if you could. I shall
just have to fight it out the best way I can. Good day."
And he bowed himself out. He saw clearly how hopeless was his
quest.
In the meanwhile, finding that the rumors were growing in volume
and that no one appeared to be willing to take steps to straighten
the matter out, Mr. Skelton C. Wheat, President of the Citizens'
Municipal Reform Association, was, at last and that by no means
against his will, compelled to call together the committee of ten
estimable Philadelphians of which he was chairman, in a local
committee-hall on Market Street, and lay the matter of the Cowperwood
failure before it.
"It strikes me, gentlemen," he announced, "that this is an occasion
when this organization can render a signal service to the city and
the people of Philadelphia, and prove the significance and the
merit of the title originally selected for it, by making such a
thoroughgoing investigation as will bring to light all the facts
in this case, and then by standing vigorously behind them insist
that such nefarious practices as we are informed were indulged in
in this case shall cease. I know it may prove to be a difficult
task. The Republican party and its local and State interests are
certain to be against us. Its leaders are unquestionably most
anxious to avoid comment and to have their ticket go through
undisturbed, and they will not contemplate with any equanimity our
opening activity in this matter; but if we persevere, great good
will surely come of it. There is too much dishonesty in public
life as it is. There is a standard of right in these matters which
cannot permanently be ignored, and which must eventually be fulfilled.
I leave this matter to your courteous consideration."
Mr. Wheat sat down, and the body before him immediately took the
matter which he proposed under advisement. It was decided to
appoint a subcommittee "to investigate" (to quote the statement
eventually given to the public) "the peculiar rumors now affecting
one of the most important and distinguished offices of our municipal
government," and to report at the next meeting, which was set for
the following evening at nine o'clock. The meeting adjourned, and
the following night at nine reassembled, four individuals of very
shrewd financial judgment having meantime been about the task
assigned them. They drew up a very elaborate statement, not wholly
in accordance with the facts, but as nearly so as could be
ascertained in so short a space of time.
"It appears [read the report, after a preamble which explained
why the committee had been appointed] that it has been the custom
of city treasurers for years, when loans have been authorized
by councils, to place them in the hands of some favorite broker
for sale, the broker accounting to the treasurer for the moneys
received by such sales at short periods, generally the first of
each month. In the present case Frank A. Cowperwood has been
acting as such broker for the city treasurer. But even this
vicious and unbusiness-like system appears not to have been
adhered to in the case of Mr. Cowperwood. The accident of the
Chicago fire, the consequent depression of stock values, and the
subsequent failure of Mr. Frank A. Cowperwood have so involved
matters temporarily that the committee has not been able to
ascertain with accuracy that regular accounts have been rendered;
but from the manner in which Mr. Cowperwood has had possession
of bonds (city loan) for hypothecation, etc., it would appear
that he has been held to no responsibility in these matters, and
that there have always been under his control several hundred
thousand dollars of cash or securities belonging to the city,
which he has manipulated for various purposes; but the details
of the results of these transactions are not easily available.
"Some of the operations consisted of hypothecation of large
amounts of these loans before the certificates were issued, the
lender seeing that the order for the hypothecated securities
was duly made to him on the books of the treasurer. Such
methods appear to have been occurring for a long time, and it
being incredible that the city treasurer could be unaware of
the nature of the business, there is indication of a complicity
between him and Mr. Cowperwood to benefit by the use of the city
credit, in violation of the law.
"Furthermore, at the very time these hypothecations were being
made, and the city paying interest upon such loans, the money
representing them was in the hands of the treasurer's broker
and bearing no interest to the city. The payment of municipal
warrants was postponed, and they were being purchased at a
discount in large amounts by Mr. Cowperwood with the very money
that should have been in the city treasury. The bona fide
holders of the orders for certificates of loans are now unable
to obtain them, and thus the city's credit is injured to a
greater extent than the present defalcation, which amounts to
over five hundred thousand dollars. An accountant is now at
work on the treasurer's books, and a few days should make clear
the whole modus operandi. It is hoped that the publicity thus
obtained will break up such vicious practices."
There was appended to this report a quotation from the law governing
the abuse of a public trust; and the committee went on to say that,
unless some taxpayer chose to initiate proceedings for the
prosecution of those concerned, the committee itself would be called
upon to do so, although such action hardly came within the object
for which it was formed.
This report was immediately given to the papers. Though some sort
of a public announcement had been anticipated by Cowperwood and
the politicians, this was, nevertheless, a severe blow. Stener
was beside himself with fear. He broke into a cold sweat when he
saw the announcement which was conservatively headed, "Meeting of
the Municipal Reform Association." All of the papers were so closely
identified with the political and financial powers of the city that
they did not dare to come out openly and say what they thought.
The chief facts had already been in the hands of the various
editors and publishers for a week and more, but word had gone
around from Mollenhauer, Simpson, and Butler to use the soft pedal
for the present. It was not good for Philadelphia, for local
commerce, etc., to make a row. The fair name of the city would
be smirched. It was the old story.
At once the question was raised as to who was really guilty, the
city treasurer or the broker, or both. How much money had actually
been lost? Where had it gone? Who was Frank Algernon Cowperwood,
anyway? Why was he not arrested? How did he come to be identified
so closely with the financial administration of the city? And
though the day of what later was termed "yellow journalism" had
not arrived, and the local papers were not given to such vital
personal comment as followed later, it was not possible, even bound
as they were, hand and foot, by the local political and social
magnates, to avoid comment of some sort. Editorials had to be
written. Some solemn, conservative references to the shame and
disgrace which one single individual could bring to a great city
and a noble political party had to be ventured upon.
That desperate scheme to cast the blame on Cowperwood temporarily,
which had been concocted by Mollenhauer, Butler, and Simpson, to
get the odium of the crime outside the party lines for the time
being, was now lugged forth and put in operation. It was interesting
and strange to note how quickly the newspapers, and even the
Citizens' Municipal Reform Association, adopted the argument that
Cowperwood was largely, if not solely, to blame. Stener had loaned
him the money, it is true--had put bond issues in his hands for
sale, it is true, but somehow every one seemed to gain the impression
that Cowperwood had desperately misused the treasurer. The fact
that he had taken a sixty-thousand-dollar check for certificates
which were not in the sinking-fund was hinted at, though until
they could actually confirm this for themselves both the newspapers
and the committee were too fearful of the State libel laws to say
so.
In due time there were brought forth several noble municipal
letters, purporting to be a stern call on the part of the mayor,
Mr. Jacob Borchardt, on Mr. George W. Stener for an immediate
explanation of his conduct, and the latter's reply, which were at
once given to the newspapers and the Citizens' Municipal Reform
Association. These letters were enough to show, so the politicians
figured, that the Republican party was anxious to purge itself of
any miscreant within its ranks, and they also helped to pass the
time until after election.
OFFICE OF THE MAYOR OF THE CITY OF PHILADELPHIA
GEORGE W. STENER, ESQ., October 18, 1871.
City Treasurer.
DEAR SIR,--Information has been given me that certificates of
city loan to a large amount, issued by you for sale on account of
the city, and, I presume, after the usual requisition from the
mayor of the city, have passed out of your custody, and that the
proceeds of the sale of said certificates have not been paid
into the city treasury.
I have also been informed that a large amount of the city's
money has been permitted to pass into the hands of some one or
more brokers or bankers doing business on Third Street, and that
said brokers or bankers have since met with financial difficulties,
whereby, and by reason of the above generally, the interests of
the city are likely to be very seriously affected.
I have therefore to request that you will promptly advise me of
the truth or falsity of these statements, so that such duties as
devolve upon me as the chief magistrate of the city, in view of
such facts, if they exist, may be intelligently discharged.
Yours respectfully,
JACOB BORCHARDT,
Mayor of Philadelphia.
OFFICE OF THE TREASURER OF THE CITY OF PHILADELPHIA
HON. JACOB BORCHARDT. October 19, 1871.
DEAR SIR,--I have to acknowledge the receipt of your
communication of the 21st instant, and to express my regret that I
cannot at this time give you the information you ask. There is
undoubtedly an embarrassment in the city treasury, owing to the
delinquency of the broker who for several years past has negotiated
the city loans, and I have been, since the discovery of this fact,
and still am occupied in endeavoring to avert or lessen the loss
with which the city is threatened.
I am, very respectfully,
GEORGE W. STENER.
OFFICE OF THE MAYOR OF THE CITY OF PHILADELPHIA
GEORGE W. STENER, ESQ., October 21, 1871.
City Treasurer.
DEAR SIR--Under the existing circumstances you will consider
this as a notice of withdrawal and revocation of any requisition
or authority by me for the sale of loan, so far as the same
has not been fulfilled. Applications for loans may for the
present be made at this office.
Very respectfully,
JACOB BORCHARDT,
Mayor of Philadelphia.
And did Mr. Jacob Borchardt write the letters to which his name
was attached? He did not. Mr. Abner Sengstack wrote them in Mr.
Mollenhauer's office, and Mr. Mollenhauer's comment when he saw
them was that he thought they would do--that they were very good,
in fact. And did Mr. George W. Stener, city treasurer of Philadelphia,
write that very politic reply? He did not. Mr. Stener was in a
state of complete collapse, even crying at one time at home in his
bathtub. Mr. Abner Sengstack wrote that also, and had Mr. Stener
sign it. And Mr. Mollenhauer's comment on that, before it was sent,
was that he thought it was "all right." It was a time when all the
little rats and mice were scurrying to cover because of the presence
of a great, fiery-eyed public cat somewhere in the dark, and only
the older and wiser rats were able to act.
Indeed, at this very time and for some days past now, Messrs.
Mollenhauer, Butler, and Simpson were, and had been, considering
with Mr. Pettie, the district attorney, just what could be done
about Cowperwood, if anything, and in order to further emphasize
the blame in that direction, and just what defense, if any, could
be made for Stener. Butler, of course, was strong for Cowperwood's
prosecution. Pettie did not see that any defense could be made
for Stener, since various records of street-car stocks purchased
for him were spread upon Cowperwood's books; but for Cowperwood--
"Let me see," he said. They were speculating, first of all, as
to whether it might not be good policy to arrest Cowperwood, and
if necessary try him, since his mere arrest would seem to the
general public, at least, positive proof of his greater guilt, to
say nothing of the virtuous indignation of the administration, and
in consequence might tend to divert attention from the evil nature
of the party until after election.
So finally, on the afternoon of October 26, 1871, Edward Strobik,
president of the common council of Philadelphia, appeared before
the mayor, as finally ordered by Mollenhauer, and charged by
affidavit that Frank A. Cowperwood, as broker, employed by the
treasurer to sell the bonds of the city, had committed embezzlement
and larceny as bailee. It did not matter that he charged George
W. Stener with embezzlement at the same time. Cowperwood was the
scapegoat they were after. _