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.