of stock values, and the subsequent failure of Mr. Frank A. Cowperwood have so involved matters temporarily that the committee has not been able to ascertain with accuracy that regular accounts have been rendered; but from the manner in which Mr. Cowperwood has had possession of bonds (city loan) for hypothecation, etc., it would appear that he has been held to no responsibility in these matters, 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 did not dare to come out openly and say what they thought.  The chief facts had already been in the hands of the various editors and publishers for a week and more, but word had gone around from Mollenhauer, Simpson, and Butler to use the soft pedal for the present.  It was not good for Philadelphia, for local commerce, etc., to make a row.  The fair name of the city would be smirched.  It was the old story.