THE FINANCIER

By Theodore Dreiser

Imagine an Ayn Rand novel written by a socialist, and you have some idea of the intellectual and moral universe of Theodore Dreiser’s trilogy of novels, The Financier, The Titan and The Stoic.

The novels tell the life story of Frank Algernon Cowperwood. Born to a respectable middle-class family in Philadelphia, in the same generation as John D. Rockefeller and Andrew Carnegie, Cowperwood early discovers a genius for finance. He strikes his first coup at age 14: He buys a lot of soap at a bankruptcy auction for $32 borrowed hastily from his father, and then sells them for $62. He never looks back.

Cowperwood lives above moral considerations, following only the credo: “I satisfy myself.” He wants money, power, and the love of women. He bribes, cheats, and lies. And yet at the same time, he builds something real. He grasps early that city streetcar lines have to be merged into a united urban transit system. He is visionary and brave, cool in a crisis, and he builds real and enduring businesses. His bad actions are balanced by good. He is generous when he can afford it, he admires learning, he develops true enthusiasm for and understanding of fine art.

Like Rand, Dreiser agrees: society needs men like Cowperwood. Like Rand too, Dreiser has little respect for conventional morality, and especially for conventional sexual morality. But unlike Rand, Dreiser perceives and depicts the terrible costs of the attempt to live above and beyond society’s rules — and it is those costs that give The Financier and The Titan their terrible tragic power.

Dreiser’s friend and admirer, H.L. Mencken, described the novelist (I’m quoting from memory here, so I hope I have this right) as a great artist, but not a great writer. If I’ve remembered the quotation rightly, it is not quite fair.

Yes, Dreiser can write very badly indeed. (Sadly, his worst passages are clearly those that he labored over longest and most lovingly. He would have benefited from taking to heart a piece of advice handed to me by one of my first editors: “Read over your compositions, and whenever you see anything that seems to you especially fine — strike it out.”) He uses too much ink, explicitly ramming home what he ought to have trusted his readers to intuit from a carefully chosen sentence or line.

Yet his characters live, and his best scenes convey with microscopic detail the world in which they lived. If you wonder: what did the furniture look and smell like in a 19th century brothel — or what kind of wardrobe precisely signaled the moment at which a local politician achieved prosperity — or what the seats and floors looked and felt like in a horse-drawn trolley car — Dreiser tells you all.

The socialist Dreiser was much more interested in — and knowledgeable about — finance and business than ever was Ayn Rand. Dreiser does for stock market crashes what Tolstoy did for battles. We never see Hank Rearden negotiate a deal or meet a margin call or face down importunate creditors. Frank Cowperwood does all three. He does rough things. He pays bribes. He blackmails. When Cowperwood needs a city property to extend a streetcar line and its owner refuses to sell, Cowperwood sends work crews to demolish the building and challenges the owner to sue him, then tangles his victim in the delays of law.

The first volume takes Cowperwood to his late 30s. After serving an apprenticeship in Philadelphia financial firms, Cowperwood thrusts his independent way forward in post-Civil War Philadelphia.

That career encounters a great limiting fact: The extreme scarcity of investment capital in the 19th century world. Modern economies take for granted an abundance of cheap, ready, and inexpensive credit. Not so in the world of 150 years ago! Cowperwood had to build his fortune in a world in which interest rates of 10% and 15% were very commonplace things, and not just because people were poor and money was scarce. Capital was expensive because business was so non-transparent. Companies disclosed only what they wished to disclose, and investors demanded compensation for the huge risk that nasty surprises might be concealed in company books.

Cowperwood’s solution? He discovers and puts to his own use the corrupt practices of the city government of Philadelphia, described by Lincoln Steffens as perhaps the worst governed big city in late 19th century America. Cowperwood strikes a deal with the city treasurer: the treasurer will lend him money from the city treasury at nominal rates — and with this money, Cowperwood will build fortunes for them both. Unfortunately for Cowperwood, he finds himself maximally exposed on the day that the Chicago Fire of 1871 collapses financial markets across the country. Cowperwood tries one last desperate gambit to stave off ruin. It does not work.

Cowperwood’s odds of survival are worsened by a reckless act of sexual bravado. Cowperwood has been helped in his early career by an important local business, an up-from-nothing Irishman who made a fortune out of city contracts. Bored with the wife he married at an early age, Cowperwood seduces and takes as a mistress his benefactor’s beautiful daughter. The relationship is discovered, and the enraged father uses all his political clout against Cowperwood. He pushes the city to prosecute Cowperwood for the misuse of Treasury funds and indeed has him convicted and sentenced to the penitentiary.

Cowperwood emerges after a little more than a year — just in time for another crash, the famous Jay Cooke crash of 1873. This time Cowperwood is not exposed. He is able to sell short — and in a few hours of frantic work, recoups a fortune of more than a million dollars. The volume ends with the departure of Cowperwood and his mistress to a new life in the booming city of Chicago.

Dreiser intends Cowperwood neither as hero or villain. Rather he intends to put a question to a society coping with the shock of economic change: What will we do with men like this? Like the new industrial turbines, Cowperwood is a source of power, neither good nor bad, but useful or dangerous depending on the rules that surround him. These were questions much more urgent a century ago than in more recent times, but if the US should enter a new era of radical social questioning, these questions may become more relevant again.

Along the way, Dreiser seems to have lost the ideological certainty with which he began. At the end of The Titan — which I’ll write about more fully shortly — Dreiser’s politics have shriveled to this one wan, wistful query:

The strong must not be too strong; the weak not too weak. But without variation how could the balance be maintained?

An essential question then, it remains a vexing problem even now.