The suspension of the banking house of Frank A. Cowperwood & Co.
created a great stir on ’change and in Philadelphia generally. It was
so unexpected, and the amount involved was comparatively so large.
Actually he failed for one million two hundred and fifty thousand
dollars; and his assets, under the depressed condition of stock values,
barely totaled seven hundred and fifty thousand dollars. There had been
considerable work done on the matter of his balance-sheet before it was
finally given to the public; but when it was, stocks dropped an
additional three points generally, and the papers the next day devoted
notable headlines to it. Cowperwood had no idea of failing permanently;
he merely wished to suspend temporarily, and later, if possible, to
persuade his creditors to allow him to resume. There were only two
things which stood in the way of this: the matter of the five hundred
thousand dollars borrowed from the city treasury at a ridiculously low
rate of interest, which showed plainer than words what had been going
on, and the other, the matter of the sixty-thousand-dollar check. His
financial wit had told him there were ways to assign his holdings in
favor of his largest creditors, which would tend to help him later to
resume; and he had been swift to act. Indeed, Harper Steger had drawn
up documents which named Jay Cooke & Co., Edward Clark & Co., Drexel &
Co., and others as preferred. He knew that even though dissatisfied
holders of smaller shares in his company brought suit and compelled
readjustment or bankruptcy later, the intention shown to prefer some of
his most influential aids was important. They would like it, and might
help him later when all this was over. Besides, suits in plenty are an
excellent way of tiding over a crisis of this kind until stocks and
common sense are restored, and he was for many suits. Harper Steger
smiled once rather grimly, even in the whirl of the financial chaos
where smiles were few, as they were figuring it out.
“Frank,” he said, “you’re a wonder. You’ll have a network of suits
spread here shortly, which no one can break through. They’ll all be
suing each other.”
Cowperwood smiled.
“I only want a little time, that’s all,” he replied. Nevertheless, for
the first time in his life he was a little depressed; for now this
business, to which he had devoted years of active work and thought, was
ended.
The thing that was troubling him most in all of this was not the five
hundred thousand dollars which was owing the city treasury, and which
he knew would stir political and social life to the center once it was
generally known—that was a legal or semi-legal transaction, at
least—but rather the matter of the sixty thousand dollars’ worth of
unrestored city loan certificates which he had not been able to replace
in the sinking-fund and could not now even though the necessary money
should fall from heaven. The fact of their absence was a matter of
source. He pondered over the situation a good deal. The thing to do, he
thought, if he went to Mollenhauer or Simpson, or both (he had never
met either of them, but in view of Butler’s desertion they were his
only recourse), was to say that, although he could not at present
return the five hundred thousand dollars, if no action were taken
against him now, which would prevent his resuming his business on a
normal scale a little later, he would pledge his word that every dollar
of the involved five hundred thousand dollars would eventually be
returned to the treasury. If they refused, and injury was done him, he
proposed to let them wait until he was “good and ready,” which in all
probability would be never. But, really, it was not quite clear how
action against him was to be prevented—even by them. The money was down
on his books as owing the city treasury, and it was down on the city
treasury’s books as owing from him. Besides, there was a local
organization known as the Citizens’ Municipal Reform Association which
occasionally conducted investigations in connection with public
affairs. His defalcation would be sure to come to the ears of this body
and a public investigation might well follow. Various private
individuals knew of it already. His creditors, for instance, who were
now examining his books.
This matter of seeing Mollenhauer or Simpson, or both, was important,
anyhow, he thought; but before doing so he decided to talk it all over
with Harper Steger. So several days after he had closed his doors, he
sent for Steger and told him all about the transaction, except that he
did not make it clear that he had not intended to put the certificates
in the sinking-fund unless he survived quite comfortably.
Harper Steger was a tall, thin, graceful, rather elegant man, of gentle
voice and perfect manners, who walked always as though he were a cat,
and a dog were prowling somewhere in the offing. He had a longish, thin
face of a type that is rather attractive to women. His eyes were blue,
his hair brown, with a suggestion of sandy red in it. He had a steady,
inscrutable gaze which sometimes came to you over a thin, delicate
hand, which he laid meditatively over his mouth. He was cruel to the
limit of the word, not aggressively but indifferently; for he had no
faith in anything. He was not poor. He had not even been born poor. He
was just innately subtle, with the rather constructive thought, which
was about the only thing that compelled him to work, that he ought to
be richer than he was—more conspicuous. Cowperwood was an excellent
avenue toward legal prosperity. Besides, he was a fascinating customer.
Of all his clients, Steger admired Cowperwood most.
“Let them proceed against you,” he said on this occasion, his brilliant
legal mind taking in all the phases of the situation at once. “I don’t
see that there is anything more here than a technical charge. If it
ever came to anything like that, which I don’t think it will, the
charge would be embezzlement or perhaps larceny as bailee. In this
instance, you were the bailee. And the only way out of that would be to
swear that you had received the check with Stener’s knowledge and
consent. Then it would only be a technical charge of irresponsibility
on your part, as I see it, and I don’t believe any jury would convict
you on the evidence of how this relationship was conducted. Still, it
might; you never can tell what a jury is going to do. All this would
have to come out at a trial, however. The whole thing, it seems to me,
would depend on which of you two—yourself or Stener—the jury would be
inclined to believe, and on how anxious this city crowd is to find a
scapegoat for Stener. This coming election is the rub. If this panic
had come at any other time—”
Cowperwood waved for silence. He knew all about that. “It all depends
on what the politicians decide to do. I’m doubtful. The situation is
too complicated. It can’t be hushed up.” They were in his private
office at his house. “What will be will be,” he added.
“What would that mean, Harper, legally, if I were tried on a charge of
larceny as bailee, as you put it, and convicted? How many years in the
penitentiary at the outside?”
Steger thought a minute, rubbing his chin with his hand. “Let me see,”
he said, “that is a serious question, isn’t it? The law says one to
five years at the outside; but the sentences usually average from one
to three years in embezzlement cases. Of course, in this case—”
“I know all about that,” interrupted Cowperwood, irritably. “My case
isn’t any different from the others, and you know it. Embezzlement is
embezzlement if the politicians want to have it so.” He fell to
thinking, and Steger got up and strolled about leisurely. He was
thinking also.
“And would I have to go to jail at any time during the
proceedings—before a final adjustment of the case by the higher
courts?” Cowperwood added, directly, grimly, after a time.
“Yes, there is one point in all legal procedure of the kind,” replied
Steger, cautiously, now rubbing his ear and trying to put the matter as
delicately as possible. “You can avoid jail sentences all through the
earlier parts of a case like this; but if you are once tried and
convicted it’s pretty hard to do anything—as a matter of fact, it
becomes absolutely necessary then to go to jail for a few days, five or
so, pending the motion for a new trial and the obtaining of a
certificate of reasonable doubt. It usually takes that long.”
The young banker sat there staring out of the window, and Steger
observed, “It is a bit complicated, isn’t it?”
“Well, I should say so,” returned Frank, and he added to himself:
“Jail! Five days in prison!” That would be a terrific slap, all things
considered. Five days in jail pending the obtaining of a certificate of
reasonable doubt, if one could be obtained! He must avoid this! Jail!
The penitentiary! His commercial reputation would never survive that.