“Dot must be a right cleffer man, dot Cowperwood,” Mr. Gotloeb told several of his partners, rubbing his hands and smiling. “I shouldt like to meet him.”
And so Cowperwood was manoeuvered into the giant banking office, where Mr. Gotloeb extended a genial hand.
“I hear much of Chicawkgo,” he explained, in his semi-German, semi-Hebraic dialect, “but almozd more uff you. Are you goink to swallow up all de street-railwaiss unt elefated roats out dere?”
Cowperwood smiled his most ingenuous smile.
“Why? Would you like me to leave a few for you?”
“Not dot exzagly, but I might not mint sharink in some uff dem wit you.”
“You can join with me at any time, Mr. Gotloeb, as you must know. The door is always very, very wide open for you.”
“I musd look into dot some more. It loogs very promising to me. I am gladt to meet you.”
The great external element in Cowperwood’s financial success—and one which he himself had foreseen from the very beginning—was the fact that Chicago was developing constantly. What had been when he arrived a soggy, messy plain strewn with shanties, ragged sidewalks, a higgledy-piggledy business heart, was now truly an astounding metropolis which had passed the million mark in population and which stretched proud and strong over the greater part of Cook County. Where once had been a meager, makeshift financial section, with here and there only a splendid business building or hotel or a public office of some kind, there were now canon-like streets lined with fifteen and even eighteen story office buildings, from the upper stories of which, as from watch-towers, might be surveyed the vast expanding regions of simple home life below. Farther out were districts of mansions, parks, pleasure resorts, great worlds of train-yards and manufacturing areas. In the commercial heart of this world Frank Algernon Cowperwood had truly become a figure of giant significance. How wonderful it is that men grow until, like colossi, they bestride the world, or, like banyan-trees, they drop roots from every branch and are themselves a forest—a forest of intricate commercial life, of which a thousand material aspects are the evidence. His street-railway properties were like a net—the parasite Gold Thread—linked together as they were, and draining two of the three important “sides” of the city.
In 1886, when he had first secured a foothold, they had been capitalized at between six and seven millions (every device for issuing a dollar on real property having been exhausted). To-day, under his management, they were capitalized at between sixty and seventy millions. The majority of the stock issued and sold was subject to a financial device whereby twenty per cent. controlled eighty per cent., Cowperwood holding that twenty per cent. and borrowing money on it as hypothecated collateral. In the case of the West Side corporation, a corporate issue of over thirty millions had been made, and these stocks, owing to the tremendous carrying power of the roads and the swelling traffic night and morning of poor sheep who paid their hard-earned nickels, had a market value which gave the road an assured physical value of about three times the sum for which it could have been built. The North Chicago company, which in 1886 had a physical value of little more than a million, could not now be duplicated for less than seven millions, and was capitalized at nearly fifteen millions. The road was valued at over one hundred thousand dollars more per mile than the sum for which it could actually have been replaced. Pity the poor groveling hack at the bottom who has not the brain-power either to understand or to control that which his very presence and necessities create.
These tremendous holdings, paying from ten to twelve per cent. on every hundred-dollar share, were in the control, if not in the actual ownership, of Cowperwood. Millions in loans that did not appear on the books of the companies he had converted into actual cash, wherewith he had bought houses, lands, equipages, paintings, government bonds of the purest gold value, thereby assuring himself to that extent of a fortune vaulted and locked, absolutely secure. After much toiling and moiling on the part of his overworked legal department he had secured a consolidation, under the title of the Consolidated Traction Company of Illinois, of all outlying lines, each having separate franchises and capitalized separately, yet operated by an amazing hocus-pocus of contracts and agreements in single, harmonious union with all his other properties. The North and West Chicago companies he now proposed to unite into a third company to be called the Union Traction Company. By taking up the ten and twelve per cent. issues of the old North and West companies and giving two for one of the new six-per-cent one-hundred-dollar-share Union Traction stocks in their stead, he could satisfy the current stockholders, who were apparently made somewhat better off thereby, and still create and leave for himself a handsome margin of nearly eighty million dollars. With a renewal of his franchises for twenty, fifty, or one hundred years he would have fastened on the city of Chicago the burden of yielding interest on this somewhat fictitious value and would leave himself personally worth in the neighborhood of one hundred millions.
This matter of extending his franchises was a most difficult and intricate business, however. It involved overcoming or outwitting a recent and very treacherous increase of local sentiment against him. This had been occasioned by various details which related to his elevated roads. To the two lines already built he now added a third property, the Union Loop. This he prepared to connect not only with his own, but with other outside elevated properties, chief among which was Mr. Schryhart’s South Side “L.” He would then farm out to his enemies the privilege of running trains on this new line. However unwillingly, they would be forced to avail themselves of the proffered opportunity, because within the region covered by the new loop was the true congestion—here every one desired to come either once or twice during the day or night. By this means Cowperwood would secure to his property a paying interest from the start.
This scheme aroused a really unprecedented antagonism in the breasts of Cowperwood’s enemies. By the Arneel-Hand-Schryhart contingent it was looked upon as nothing short of diabolical. The newspapers, directed by such men as Haguenin, Hyssop, Ormonde Ricketts, and Truman Leslie MacDonald (whose father was now dead, and whose thoughts as editor of the Inquirer were almost solely directed toward driving Cowperwood out of Chicago), began to shout, as a last resort, in the interests of democracy. Seats for everybody (on Cowperwood’s lines), no more straps in the rush hours, three-cent fares for workingmen, morning and evening, free transfers from all of Cowperwood’s lines north to west and west to north, twenty per cent. of the gross income of his lines to be paid to the city. The masses should be made cognizant of their individual rights and privileges. Such a course, while decidedly inimical to Cowperwood’s interests at the present time, and as such strongly favored by the majority of his opponents, had nevertheless its disturbing elements to an ultra-conservative like Hosmer Hand.
“I don’t know about this, Norman,” he remarked to Schryhart, on one occasion. “I don’t know about this. It’s one thing to stir up the public, but it’s another to make them forget. This is a restless, socialistic country, and Chicago is the very hotbed and center of it. Still, if it will serve to trip him up I suppose it will do for the present. The newspapers can probably smooth it all over later. But I don’t know.”
Mr. Hand was of that order of mind that sees socialism as a horrible importation of monarchy-ridden Europe. Why couldn’t the people be satisfied to allow the strong, intelligent, God-fearing men of the community to arrange things for them? Wasn’t that what democracy meant? Certainly it was—he himself was one of the strong. He could not help distrusting all this radical palaver. Still, anything to hurt Cowperwood—anything.
Cowperwood was not slow to realize that public sentiment was now in danger of being thoroughly crystallized against him by newspaper agitation. Although his franchises would not expire—the large majority of them—before January 1, 1903, yet if things went on at this rate it would be doubtful soon whether ever again he would be able to win another election by methods legitimate or illegitimate. Hungry ald
ermen and councilmen might be venal and greedy enough to do anything he should ask, provided he was willing to pay enough, but even the thickest-hided, the most voracious and corrupt politician could scarcely withstand the searching glare of publicity and the infuriated rage of a possibly aroused public opinion. By degrees this last, owing to the untiring efforts of the newspapers, was being whipped into a wild foam. To come into council at this time and ask for a twenty-year extension of franchises not destined to expire for seven years was too much. It could not be done. Even suborned councilmen would be unwilling to undertake it just now. There are some things which even politically are impossible.
To make matters worse, the twenty-year-franchise limit was really not at all sufficient for his present needs. In order to bring about the consolidation of his North and West surface lines, which he was now proposing and on the strength of which he wished to issue at least two hundred million dollars’ worth of one-hundred-dollar-six-per-cent. shares in place of the seventy million dollars current of ten and twelve per cents., it was necessary for him to secure a much more respectable term of years than the brief one now permitted by the state legislature, even providing that this latter could be obtained.
“Peeble are not ferry much indrested in tees short-time frangizes,” observed Mr. Gotloeb once, when Cowperwood was talking the matter over with him. He wanted Haeckelheimer & Co. to underwrite the whole issue. “Dey are so insigure. Now if you couldt get, say, a frangize for fifty or one hunnert years or something like dot your stocks wouldt go off like hot cakes. I know where I couldt dispose of fifty million dollars off dem in Cermany alone.”
He was most unctuous and pleading.
Cowperwood understood this quite as well as Gotloeb, if not better. He was not at all satisfied with the thought of obtaining a beggarly twenty-year extension for his giant schemes when cities like Philadelphia, Boston, New York, and Pittsburg were apparently glad to grant their corporations franchises which would not expire for ninety-nine years at the earliest, and in most cases were given in perpetuity. This was the kind of franchise favored by the great moneyed houses of New York and Europe, and which Gotloeb, and even Addison, locally, were demanding.
“It is certainly important that we get these franchises renewed for fifty years,” Addison used to say to him, and it was seriously and disagreeably true.
The various lights of Cowperwood’s legal department, constantly on the search for new legislative devices, were not slow to grasp the import of the situation. It was not long before the resourceful Mr. Joel Avery appeared with a suggestion.
“Did you notice what the state legislature of New York is doing in connection with the various local transit problems down there?” asked this honorable gentleman of Cowperwood, one morning, ambling in when announced and seating himself in the great presence. A half-burned cigar was between his fingers, and a little round felt hat looked peculiarly rakish above his sinister, intellectual, constructive face and eyes.
“No, I didn’t,” replied Cowperwood, who had actually noted and pondered upon the item in question, but who did not care to say so. “I saw something about it, but I didn’t pay much attention to it. What of it?”
“Well, it plans to authorize a body of four or five men—one branch in New York, one in Buffalo, I presume—to grant all new franchises and extend old ones with the consent of the various local communities involved. They are to fix the rate of compensation to be paid to the state or the city, and the rates of fare. They can regulate transfers, stock issues, and all that sort of thing. I was thinking if at any time we find this business of renewing the franchises too uncertain here we might go into the state legislature and see what can be done about introducing a public-service commission of that kind into this state. We are not the only corporation that would welcome it. Of course, it would be better if there were a general or special demand for it outside of ourselves. It ought not to originate with us.”
He stared at Cowperwood heavily, the latter returning a reflective gaze.
“I’ll think it over,” he said. “There may be something in that.”
Henceforth the thought of instituting such a commission never left Cowperwood’s mind. It contained the germ of a solution—the possibility of extending his franchises for fifty or even a hundred years.
This plan, as Cowperwood was subsequently to discover, was a thing more or less expressly forbidden by the state constitution of Illinois. The latter provided that no special or exclusive privilege, immunity, or franchise whatsoever should be granted to any corporation, association, or individual. Yet, “What is a little matter like the constitution between friends, anyhow?” some one had already asked. There are fads in legislation as well as dusty pigeonholes in which phases of older law are tucked away and forgotten. Many earlier ideals of the constitution-makers had long since been conveniently obscured or nullified by decisions, appeals to the federal government, appeals to the state government, communal contracts, and the like—fine cobwebby figments, all, but sufficient, just the same, to render inoperative the original intention. Besides, Cowperwood had but small respect for either the intelligence or the self-protective capacity of such men as constituted the rural voting element of the state. From his lawyers and from others he had heard innumerable droll stories of life in the state legislature, and the state counties and towns—on the bench, at the rural huskings where the state elections were won, in country hotels, on country roads and farms. “One day as I was getting on the train at Petunkey,” old General Van Sickle, or Judge Dickensheets, or ex-Judge Avery would begin—and then would follow some amazing narration of rural immorality or dullness, or political or social misconception. Of the total population of the state at this time over half were in the city itself, and these he had managed to keep in control. For the remaining million, divided between twelve small cities and an agricultural population, he had small respect. What did this handful of yokels amount to, anyhow?—dull, frivoling, barn-dancing boors.
The great state of Illinois—a territory as large as England proper and as fertile as Egypt, bordered by a great lake and a vast river, and with a population of over two million free-born Americans—would scarcely seem a fit subject for corporate manipulation and control. Yet a more trade-ridden commonwealth might not have been found anywhere at this time within the entire length and breadth of the universe. Cowperwood personally, though contemptuous of the bucolic mass when regarded as individuals, had always been impressed by this great community of his election. Here had come Marquette and Joliet, La Salle and Hennepin, dreaming a way to the Pacific. Here Lincoln and Douglas, antagonist and protagonist of slavery argument, had contested; here had arisen “Joe” Smith, propagator of that strange American dogma of the Latter-Day Saints. What a state, Cowperwood sometimes thought; what a figment of the brain, and yet how wonderful! He had crossed it often on his way to St. Louis, to Memphis, to Denver, and had been touched by its very simplicity—the small, new wooden towns, so redolent of American tradition, prejudice, force, and illusion. The white-steepled church, the lawn-faced, tree-shaded village streets, the long stretches of flat, open country where corn grew in serried rows or where in winter the snow bedded lightly—it all reminded him a little of his own father and mother, who had been in many respects suited to such a world as this. Yet none the less did he hesitate to press on the measure which was to adjust his own future, to make profitable his issue of two hundred million dollars’ worth of Union Traction, to secure him a fixed place in the financial oligarchy of America and of the world.
The state legislature at this time was ruled over by a small group of wire-pulling, pettifogging, corporation-controlled individuals who came up from the respective towns, counties, and cities of the state, but who bore the same relation to the communities which they represented and to their superiors and equals in and out of the legislative halls at Springfield that men do to such allies anywhere in any given field. Why do we call them pettifogging and dismiss them? Perhaps they were pettifoggin
g, but certainly no more so than any other shrewd rat or animal that burrows its way onward—and shall we say upward? The deepest controlling principle which animated these individuals was the oldest and first, that of self-preservation. Picture, for example, a common occurrence—that of Senator John H. Southack, conversing with, perhaps, Senator George Mason Wade, of Gallatin County, behind a legislative door in one of the senate conference chambers toward the close of a session—Senator Southack, blinking, buttonholing his well-dressed colleague and drawing very near; Senator Wade, curious, confidential, expectant (a genial, solid, experienced, slightly paunchy but well-built Senator Wade—and handsome, too).
“You know, George, I told you there would be something eventually in the Quincy water-front improvement if it ever worked out. Well, here it is. Ed Truesdale was in town yesterday.” (This with a knowing eye, as much as to say, “Mum’s the word.”) “Here’s five hundred; count it.”
A quick flashing out of some green and yellow bills from a vest pocket, a light thumbing and counting on the part of Senator Wade. A flare of comprehension, approval, gratitude, admiration, as though to signify, “This is something like.” “Thanks, John. I had pretty near forgot all about it. Nice people, eh? If you see Ed again give him my regards. When that Bellville contest comes up let me know.”
Mr. Wade, being a good speaker, was frequently in request to stir up the populace to a sense of pro or con in connection with some legislative crisis impending, and it was to some such future opportunity that he now pleasantly referred. O life, O politics, O necessity, O hunger, O burning human appetite and desire on every hand!
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