The Financier by Theodore Dreiser

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.