Full Text Archive

Full Text Archive
https://www.fulltextarchive.com
"I tell you what I'd like to do, Mr. Stener," he said, after he had listened to his explanation and
asked how much of the city loan he would like to sell during the coming year. "I'll be glad to
undertake it. But I'd like to have a day or two in which to think it over."
"Why, certainly, certainly, Mr. Cowperwood," replied Stener, genially. "That's all right. Take your
time. If you know how it can be done, just show me when you're ready. By the way, what do you
charge?"
"Well, the stock exchange has a regular scale of charges which we brokers are compelled to
observe. It's one-fourth of one per cent. on the par value of bonds and loans. Of course, I may
hav to add a lot of fictitious selling--I'll explain that to you later-- but I won't charge you anything
for that so long as it is a secret between us. I'll give you the best service I can, Mr. Stener. You
can depend on that. Let me have a day or two to think it over, though."
He shook hands with Stener, and they parted. Cowperwood was satisfied that he was on the
verge of a significant combination, and Stener that he had found someone on whom he could
lean.
Chapter XV
The plan Cowperwood developed after a few days' meditation will be plain enough to any one
who knows anything of commercial and financial manipulation, but a dark secret to those who
do not. In the first place, the city treasurer was to use his (Cowperwood's) office as a bank of
deposit. He was to turn over to him, actually, or set over to his credit on the city's books, subject
to his order, certain amounts of city loans--two hundred thousand dollars at first, since that was
the amount it was desired to raise quickly-- and he would then go into the market and see what
could be done to have it brought to par. The city treasurer was to ask leave of the stock
exchange at once to have it listed as a security. Cowperwood would then use his influence to
have this application acted upon quickly. Stener was then to dispose of all city loan certificates
through him, and him only. He was to allow him to buy for the sinking-fund, supposedly, such
amounts as he might have to buy in order to keep the price up to par. To do this, once a
considerable number of the loan certificates had been unloaded on the public, it might be
necessary to buy back a great deal. However, these would be sold again. The law concerning
selling only at par would have to be abrogated to this extent-- i.e., that the wash sales and
preliminary sales would have to be considered no sales until par was reached.
There was a subtle advantage here, as Cowperwood pointed out to Stener. In the first place,
since the certificates were going ultimately to reach par anyway, there was no objection to
Stener or any one else buying low at the opening price and holding for a rise. Cowperwood
would be glad to carry him on his books for any amount, and he would settle at the end of each
month. He would not be asked to buy the certificates outright. He could be carried on the books
for a certain reasonable margin, say ten points. The money was as good as made for Stener
now. In the next place, in buying for the sinking-fund it would be possible to buy these
certificates very cheap, for, having the new and reserve issue entirely in his hands,
Cowperwood could throw such amounts as he wished into the market at such times as he
wished to buy, and consequently depress the market. Then he could buy, and, later, up would
go the price. Having the issues totally in his hands to boost or depress the market as he wished,
there was no reason why the city should not ultimately get par for all its issues, and at the same
time considerable money be made out of the manufactured fluctuations. He, Cowperwood,
64 / 312

---