The Financier by Theodore Dreiser, summary

This 1912 novel is based on the life of American millionaire Charles Yerkes. It centers on the life, rise, fall, and financial revenge of young entrepreneur Frank Algernon Cowperwood. This book is a study of the social and business environment of mid-19th-century Philadelphia, revealing the underbelly of American capitalism. Watching a fight between a lobster and a cuttlefish in an aquarium as a child instills in the protagonist the belief that the world is governed by the law of predators, where the strong devour the weak.

The book opens the "Trilogy of Desire" series, which also includes the novels "The Titan" (1914) and "The Stoic" (1947). This first work in the series traces in detail the development of the hero’s financial empire before his departure to Chicago.

Childhood and the beginning of a commercial career

Frank Cowperwood was born in Philadelphia to bank clerk Henry Worthington Cowperwood. His father’s promotion to assistant cashier, earning $3,500 a year, allowed the family to trade their modest home on Buttonwood Street for a more spacious home on New Market Street. Young Frank demonstrated exceptional mathematical ability, an independent spirit, and a complete disinterest in the humanities. At the age of 13, he made his first speculative move: he bought a batch of Castile soap at auction for $32, borrowed from his father, and resold it the same day to neighboring grocer Dalrymple for $62, netting him $30.

At 17, Frank left school and took a job at Henry Waterman & Company, a grain commission firm. Thanks to his quick wits, he mastered complex bookkeeping in a matter of days, transitioned to stock trading, and earned a $500 bonus in his first six months. Understanding the limitations of the commission business, at 18, Frank transferred to the brokerage firm of Tai & Company on Third Street — the center of Philadelphia’s financial world. There, he thoroughly studied the mechanisms of stocks, bills, and government bonds, as well as the rules of bullish and bearish speculation.

First successes and marriage

Cowperwood came to believe that real financiers controlled real resources — railroads and mines — and that brokers merely served as executors of their will. At 19, he became infatuated with Lillian Sample, the wife of a shoe store owner. After her husband’s sudden death, Frank helped the widow sell the business and inherit over $18,000. At 21, Frank married 26-year-old Lillian, despite his parents’ reticence. They had a son, Frank, and a daughter, Lillian.

Having received $15,000 from his uncle, Seneca Davis, and combining it with his personal savings and his wife’s capital, Cowperwood opened his own discount and bill office, Cowperwood & Company, at 64 Third Street. He began investing in horse-drawn railroad stock, correctly assessing the prospects of urban transportation. Young architect Wilton Ellsworth helped him remodel his mansion on Front Street and furnish the interiors in an elegant style.

Municipal loans and the stock market system

During the American Civil War (1861–1865), Cowperwood avoided conscription, considering the war a senseless waste of resources and a hindrance to business. Through Edward Malia Butler, a prominent contractor and political operator, he secured a stake in the Philadelphia municipal bond issue. Frank profitably assigned the bond distribution rights to the banking house Drexel & Company, earning a $20,000 commission and establishing himself in the state’s business community.

This success allowed the Cowperwoods to begin construction of two luxurious green granite mansions on Girard Avenue — one for Frank’s family and one for his father, who, thanks to his son’s support, became chairman of the board of the Third National Bank. Frank moved the office to a new building on Third Street with a façade in the early Florentine style. He soon met the new city treasurer, George Stener, a passive figure installed by the ruling political faction of Henry Mollenhauer, Senator Mark Simpson, and Edward Butler.

Cowperwood and Stener enter into an informal agreement: the treasurer grants Frank a loan from the city treasury at 2% annual interest. Cowperwood uses this money to buy up city loan certificates, raising their value to $100, and to acquire controlling stakes in the city’s horse-drawn railroads (the 17th and 19th Streets, Green and Coates, and Front Street lines).

Passion for Eileen Butler and financial ruin

At 28, Cowperwood falls in love with 18-year-old Eileen Butler, the flamboyant daughter of his influential partner. Frank secretly rents a mansion on Tenth Street for their meetings. His marriage to the cold and ailing Lillian becomes a mere formality. Frank hopes to eventually obtain a divorce and marry Eileen.

On October 7, 1871, a devastating fire breaks out in Chicago. The disaster triggers a severe panic on stock markets nationwide. Stock prices plummet. Cowperwood’s debt to the city treasury reaches $500,000, and banks demand urgent repayment of their call loans. Frank tries to persuade Stener to issue an additional $300,000 loan, but the panicked treasurer refuses.

Cowperwood turns to Edward Butler for help, proposing that the political leaders join forces to support the market. That same day, Butler receives an anonymous letter revealing Eileen’s secret affair with Frank. The insulted father decides to destroy the financier. On the orders of Butler, Mollenhauer, and Simpson, Stener is categorically forbidden from providing Cowperwood with funds.

Trial and verdict

On October 9, 1871, Cowperwood received a check for $60,000 from Treasurer Albert Styers for the city loan certificates he had purchased. Instead of depositing these securities into the sinking fund, Frank pawned them at the Girard National Bank to cover an urgent debt. A day later, Cowperwood & Company suspended payments with a deficit of $1.25 million.

The political establishment framed Cowperwood for embezzlement to divert public attention before the election. Frank and Stener were charged with embezzlement and misappropriation of property. At the trial in December 1871, attorney Harper Steger argued that the $60,000 check was received as part of established treasury practices. However, under pressure from District Attorney Dennis Shannon, the jury found Cowperwood guilty.

Judge Wilbur Peyderson sentenced Frank to a $5,000 fine and four years and three months in solitary confinement at the Eastern Penitentiary of Pennsylvania. Steiner received four years and nine months. In August 1872, Edward Butler died of a heart attack. In prison, Cowperwood maintained his fortitude, learning to weave chairs, growing flowers in his cell yard, and, through Warden Bonheg, arranging secret visits with Eileen.

Liberation and revenge

Steger’s attorney appealed the verdict to the state supreme court. Although the majority upheld the verdict, two judges issued a dissenting opinion in favor of Cowperwood. Based on this document and a petition from leading financiers, in March 1873, after 13 months of imprisonment, the governor signed a decree pardoning Frank.

On September 18, 1873, the banking house of Jay Cooke & Company, which financed the construction of the Northern Pacific Railroad, collapsed. A devastating stock market panic erupted across the country. Now free and operating through the firm of his new partner, Stephen Wingate, Cowperwood aggressively shorted the stock. He bought up depreciated horse-drawn railroad stocks and, in a matter of days, earned over $1 million, completely restoring his wealth.

After a financial rematch, Cowperwood finally broke with Philadelphia. Lillian granted him a divorce. Taking Eileen Butler, Frank headed to Chicago to begin a new phase of his business ventures in the rapidly developing West.