ters, and that there have always been under
his control several hundred thousand dollars of cash or securities
belonging to the city, which he has manipulated for various purposes;
but the details of the results of these transactions are not easily
available.

"Some of the operations consisted of hypothecation of large amounts of
these loans before the certificates were issued, the lender seeing that
the order for the hypothecated securities was duly made to him on the
books of the treasurer. Such methods appear to have been occurring for
a long time, and it being incredible that the city treasurer could
be unaware of the nature of the business, there is indication of a
complicity between him and Mr. Cowperwood to benefit by the use of the
city credit, in violation of the law.

"Furthermore, at the very time these hypothecations were being made, and
the city paying interest upon such loans, the money representing them
was in the hands of the treasurer's broker and bearing no interest to
the city. The payment of municipal warrants was postponed, and they were
being purchased at a discount in large amounts by Mr. Cowperwood with
the very money that should have been in the city treasury. The bona fide
holders of the orders for certificates of loans are now unable to obtain
them, and thus the city's credit is injured to a greater extent than
the present defalcation, which amounts to over five hundred thousand
dollars. An accountant is now at work on the treasurer's books, and a
few days should make clear the whole modus operandi. It is hoped that
the publicity thus obtained will break up such vicious practices."

There was appended to this report a quotation from the law governing the
abuse of a public trust; and the committee went on to say that, unless
some taxpayer chose to initiate proceedings for the prosecution of those
concerned, the committee itself would be called upon to do so, although
such action hardly came within the object for which it was formed.

This report was immediately given to the papers. Though some sort of
a public announcement had been anticipated by Cowperwood and the
politicians, this was, nevertheless, a severe blow. Stener was
beside himself with fear. He broke into a cold sweat when he saw the
announcement which was conservatively headed, "Meeting of the Municipal
Reform Association." All of the papers were so closely identified with
the political and financial powers of the city that they