The Financier

by Theodore Dreiser

Chapter LVIII

This matter of the pardon of Cowperwood, the exact time of it, was kept a secret from him, though the fact that he was to be pardoned soon, or that he had a very excellent chance of being, had not been denied—rather had been made much of from time to time. Wingate had kept him accurately informed as to the progress being made, as had Steger; but when it was actually ascertained, from the Governor’s private secretary, that a certain day would see the pardon handed over to them, Steger, Wingate, and Walter Leigh had agreed between themselves that they would say nothing, taking Cowperwood by surprise. They even went so far—that is, Steger and Wingate did—as to indicate to Cowperwood that there was some hitch to the proceedings and that he might not now get out so soon. Cowperwood was somewhat depressed, but properly stoical; he assured himself that he could wait, and that he would be all right sometime. He was rather surprised therefore, one Friday afternoon, to see Wingate, Steger, and Leigh appear at his cell door, accompanied by Warden Desmas.

The warden was quite pleased to think that Cowperwood should finally be going out—he admired him so much—and decided to come along to the cell, to see how he would take his liberation. On the way Desmas commented on the fact that he had always been a model prisoner. “He kept a little garden out there in that yard of his,” he confided to Walter Leigh. “He had violets and pansies and geraniums out there, and they did very well, too.”

Leigh smiled. It was like Cowperwood to be industrious and tasteful, even in prison. Such a man could not be conquered. “A very remarkable man, that,” he remarked to Desmas.

“Very,” replied the warden. “You can tell that by looking at him.”

The four looked in through the barred door where he was working, without being observed, having come up quite silently.

“Hard at it, Frank?” asked Steger.

Cowperwood glanced over his shoulder and got up. He had been thinking, as always these days, of what he would do when he did get out.

“What is this,” he asked—“a political delegation?” He suspected something on the instant. All four smiled cheeringly, and Bonhag unlocked the door for the warden.

“Nothing very much, Frank,” replied Stager, gleefully, “only you’re a free man. You can gather up your traps and come right along, if you wish.”

Cowperwood surveyed his friends with a level gaze. He had not expected this so soon after what had been told him. He was not one to be very much interested in the practical joke or the surprise, but this pleased him—the sudden realization that he was free. Still, he had anticipated it so long that the charm of it had been discounted to a certain extent. He had been unhappy here, and he had not. The shame and humiliation of it, to begin with, had been much. Latterly, as he had become inured to it all, the sense of narrowness and humiliation had worn off. Only the consciousness of incarceration and delay irked him. Barring his intense desire for certain things—success and vindication, principally—he found that he could live in his narrow cell and be fairly comfortable. He had long since become used to the limy smell (used to defeat a more sickening one), and to the numerous rats which he quite regularly trapped. He had learned to take an interest in chair-caning, having become so proficient that he could seat twenty in a day if he chose, and in working in the little garden in spring, summer, and fall. Every evening he had studied the sky from his narrow yard, which resulted curiously in the gift in later years of a great reflecting telescope to a famous university. He had not looked upon himself as an ordinary prisoner, by any means—had not felt himself to be sufficiently punished if a real crime had been involved. From Bonhag he had learned the history of many criminals here incarcerated, from murderers up and down, and many had been pointed out to him from time to time. He had been escorted into the general yard by Bonhag, had seen the general food of the place being prepared, had heard of Stener’s modified life here, and so forth. It had finally struck him that it was not so bad, only that the delay to an individual like himself was wasteful. He could do so much now if he were out and did not have to fight court proceedings. Courts and jails! He shook his head when he thought of the waste involved in them.

“That’s all right,” he said, looking around him in an uncertain way. “I’m ready.”

He stepped out into the hall, with scarcely a farewell glance, and to Bonhag, who was grieving greatly over the loss of so profitable a customer, he said: “I wish you would see that some of these things are sent over to my house, Walter. You’re welcome to the chair, that clock, this mirror, those pictures—all of these things in fact, except my linen, razors, and so forth.”

The last little act of beneficence soothed Bonhag’s lacerated soul a little. They went out into the receiving overseer’s office, where Cowperwood laid aside his prison suit and the soft shirt with a considerable sense of relief. The clog shoes had long since been replaced by a better pair of his own. He put on the derby hat and gray overcoat he had worn the year before, on entering, and expressed himself as ready. At the entrance of the prison he turned and looked back—one last glance—at the iron door leading into the garden.

“You don’t regret leaving that, do you, Frank?” asked Steger, curiously.

“I do not,” replied Cowperwood. “It wasn’t that I was thinking of. It was just the appearance of it, that’s all.”

In another minute they were at the outer gate, where Cowperwood shook the warden finally by the hand. Then entering a carriage outside the large, impressive, Gothic entrance, the gates were locked behind them and they were driven away.

“Well, there’s an end of that, Frank,” observed Steger, gayly; “that will never bother you any more.”

“Yes,” replied Cowperwood. “It’s worse to see it coming than going.”

“It seems to me we ought to celebrate this occasion in some way,” observed Walter Leigh. “It won’t do just to take Frank home. Why don’t we all go down to Green’s? That’s a good idea.”

“I’d rather not, if you don’t mind,” replied Cowperwood, feelingly. “I’ll get together with you all, later. Just now I’d like to go home and change these clothes.”

He was thinking of Aileen and his children and his mother and father and of his whole future. Life was going to broaden out for him considerably from now on, he was sure of it. He had learned so much about taking care of himself in those thirteen months. He was going to see Aileen, and find how she felt about things in general, and then he was going to resume some such duties as he had had in his own concern, with Wingate & Co. He was going to secure a seat on ‘change again, through his friends; and, to escape the effect of the prejudice of those who might not care to do business with an ex-convict, he was going to act as general outside man, and floor man on ‘charge, for Wingate & Co. His practical control of that could not be publicly proved. Now for some important development in the market—some slump or something. He would show the world whether he was a failure or not.

They let him down in front of his wife’s little cottage, and he entered briskly in the gathering gloom.

On September 18, 1873, at twelve-fifteen of a brilliant autumn day, in the city of Philadelphia, one of the most startling financial tragedies that the world has ever seen had its commencement. The banking house of Jay Cooke & Co., the foremost financial organization of America, doing business at Number 114 South Third Street in Philadelphia, and with branches in New York, Washington, and London, closed its doors. Those who know anything about the financial crises of the United States know well the significance of the panic which followed. It is spoken of in all histories as the panic of 1873, and the widespread ruin and disaster which followed was practically unprecedented in American history.

At this time Cowperwood, once more a broker—ostensibly a broker’s agent—was doing business in South Third Street, and representing Wingate & Co. on ‘change. During the six months which had elapsed since he had emerged from the Eastern Penitentiary he had been quietly resuming financial, if not social, relations with those who had known him before.

Furthermore, Wingate & Co. were prospering, and had been for some time, a fact which redounded to his credit with those who knew. Ostensibly he lived with his wife in a small house on North Twenty-first Street. In reality he occupied a bachelor apartment on North Fifteenth Street, to which Aileen occasionally repaired. The difference between himself and his wife had now become a matter of common knowledge in the family, and, although there were some faint efforts made to smooth the matter over, no good resulted. The difficulties of the past two years had so inured his parents to expect the untoward and exceptional that, astonishing as this was, it did not shock them so much as it would have years before. They were too much frightened by life to quarrel with its weird developments. They could only hope and pray for the best.

The Butler family, on the other hand, what there was of it, had become indifferent to Aileen’s conduct. She was ignored by her brothers and Norah, who now knew all; and her mother was so taken up with religious devotions and brooding contemplation of her loss that she was not as active in her observation of Aileen’s life as she might have been. Besides, Cowperwood and his mistress were more circumspect in their conduct than they had ever been before. Their movements were more carefully guarded, though the result was the same. Cowperwood was thinking of the West—of reaching some slight local standing here in Philadelphia, and then, with perhaps one hundred thousand dollars in capital, removing to the boundless prairies of which he had heard so much—Chicago, Fargo, Duluth, Sioux City, places then heralded in Philadelphia and the East as coming centers of great life—and taking Aileen with him. Although the problem of marriage with her was insoluble unless Mrs. Cowperwood should formally agree to give him up—a possibility which was not manifest at this time, neither he nor Aileen were deterred by that thought. They were going to build a future together—or so they thought, marriage or no marriage. The only thing which Cowperwood could see to do was to take Aileen away with him, and to trust to time and absence to modify his wife’s point of view.

This particular panic, which was destined to mark a notable change in Cowperwood’s career, was one of those peculiar things which spring naturally out of the optimism of the American people and the irrepressible progress of the country. It was the result, to be accurate, of the prestige and ambition of Jay Cooke, whose early training and subsequent success had all been acquired in Philadelphia, and who had since become the foremost financial figure of his day. It would be useless to attempt to trace here the rise of this man to distinction; it need only be said that by suggestions which he made and methods which he devised the Union government, in its darkest hours, was able to raise the money wherewith to continue the struggle against the South. After the Civil War this man, who had built up a tremendous banking business in Philadelphia, with great branches in New York and Washington, was at a loss for some time for some significant thing to do, some constructive work which would be worthy of his genius. The war was over; the only thing which remained was the finances of peace, and the greatest things in American financial enterprise were those related to the construction of transcontinental railway lines. The Union Pacific, authorized in 1860, was already building; the Northern Pacific and the Southern Pacific were already dreams in various pioneer minds. The great thing was to connect the Atlantic and the Pacific by steel, to bind up the territorially perfected and newly solidified Union, or to enter upon some vast project of mining, of which gold and silver were the most important. Actually railway-building was the most significant of all, and railroad stocks were far and away the most valuable and important on every exchange in America. Here in Philadelphia, New York Central, Rock Island, Wabash, Central Pacific, St. Paul, Hannibal & St. Joseph, Union Pacific, and Ohio & Mississippi were freely traded in. There were men who were getting rich and famous out of handling these things; and such towering figures as Cornelius Vanderbilt, Jay Gould, Daniel Drew, James Fish, and others in the East, and Fair, Crocker, W. R. Hearst, and Collis P. Huntington, in the West, were already raising their heads like vast mountains in connection with these enterprises. Among those who dreamed most ardently on this score was Jay Cooke, who without the wolfish cunning of a Gould or the practical knowledge of a Vanderbilt, was ambitious to thread the northern reaches of America with a band of steel which should be a permanent memorial to his name.

The project which fascinated him most was one that related to the development of the territory then lying almost unexplored between the extreme western shore of Lake Superior, where Duluth now stands, and that portion of the Pacific Ocean into which the Columbia River empties—the extreme northern one-third of the United States. Here, if a railroad were built, would spring up great cities and prosperous towns. There were, it was suspected, mines of various metals in the region of the Rockies which this railroad would traverse, and untold wealth to be reaped from the fertile corn and wheat lands. Products brought only so far east as Duluth could then be shipped to the Atlantic, via the Great Lakes and the Erie Canal, at a greatly reduced cost. It was a vision of empire, not unlike the Panama Canal project of the same period, and one that bade fair apparently to be as useful to humanity. It had aroused the interest and enthusiasm of Cooke. Because of the fact that the government had made a grant of vast areas of land on either side of the proposed track to the corporation that should seriously undertake it and complete it within a reasonable number of years, and because of the opportunity it gave him of remaining a distinguished public figure, he had eventually shouldered the project. It was open to many objections and criticisms; but the genius which had been sufficient to finance the Civil War was considered sufficient to finance the Northern Pacific Railroad. Cooke undertook it with the idea of being able to put the merits of the proposition before the people direct—not through the agency of any great financial corporation—and of selling to the butcher, the baker, and the candlestick-maker the stock or shares that he wished to dispose of.

It was a brilliant chance. His genius had worked out the sale of great government loans during the Civil War to the people direct in this fashion. Why not Northern Pacific certificates? For several years he conducted a pyrotechnic campaign, surveying the territory in question, organizing great railway-construction corps, building hundreds of miles of track under most trying conditions, and selling great blocks of his stock, on which interest of a certain percentage was guaranteed. If it had not been that he knew little of railroad-building, personally, and that the project was so vast that it could not well be encompassed by one man, even so great a man it might have proved successful, as under subsequent management it did. However, hard times, the war between France and Germany, which tied up European capital for the time being and made it indifferent to American projects, envy, calumny, a certain percentage of mismanagement, all conspired to wreck it. On September 18, 1873, at twelve-fifteen noon, Jay Cooke & Co. failed for approximately eight million dollars and the Northern Pacific for all that had been invested in it—some fifty million dollars more.

One can imagine what the result was—the most important financier and the most distinguished railway enterprise collapsing at one and the same time. “A financial thunderclap in a clear sky,” said the Philadelphia Press. “No one could have been more surprised,” said the Philadelphia Inquirer, “if snow had fallen amid the sunshine of a summer noon.” The public, which by Cooke’s previous tremendous success had been lulled into believing him invincible, could not understand it. It was beyond belief. Jay Cooke fail? Impossible, or anything connected with him. Nevertheless, he had failed; and the New York Stock Exchange, after witnessing a number of crashes immediately afterward, closed for eight days. The Lake Shore Railroad failed to pay a call-loan of one million seven hundred and fifty thousand dollars; and the Union Trust Company, allied to the Vanderbilt interests, closed its doors after withstanding a prolonged run. The National Trust Company of New York had eight hundred thousand dollars of government securities in its vaults, but not a dollar could be borrowed upon them; and it suspended. Suspicion was universal, rumor affected every one.

In Philadelphia, when the news reached the stock exchange, it came first in the form of a brief despatch addressed to the stock board from the New York Stock Exchange—“Rumor on street of failure of Jay Cooke & Co. Answer.” It was not believed, and so not replied to. Nothing was thought of it. The world of brokers paid scarcely any attention to it. Cowperwood, who had followed the fortunes of Jay Cooke & Co. with considerable suspicion of its president’s brilliant theory of vending his wares direct to the people—was perhaps the only one who had suspicions. He had once written a brilliant criticism to some inquirer, in which he had said that no enterprise of such magnitude as the Northern Pacific had ever before been entirely dependent upon one house, or rather upon one man, and that he did not like it. “I am not sure that the lands through which the road runs are so unparalleled in climate, soil, timber, minerals, etc., as Mr. Cooke and his friends would have us believe. Neither do I think that the road can at present, or for many years to come, earn the interest which its great issues of stock call for. There is great danger and risk there.” So when the notice was posted, he looked at it, wondering what the effect would be if by any chance Jay Cooke & Co. should fail.

He was not long in wonder. A second despatch posted on ‘change read: “New York, September 18th. Jay Cooke & Co. have suspended.”

Cowperwood could not believe it. He was beside himself with the thought of a great opportunity. In company with every other broker, he hurried into Third Street and up to Number 114, where the famous old banking house was located, in order to be sure. Despite his natural dignity and reserve, he did not hesitate to run. If this were true, a great hour had struck. There would be wide-spread panic and disaster. There would be a terrific slump in prices of all stocks. He must be in the thick of it. Wingate must be on hand, and his two brothers. He must tell them how to sell and when and what to buy. His great hour had come!