From legendary short seller to god of American capital

Chapter 379 Kennedy Reveals the Price: The Clash of Financial Backers Behind Presidential Candidates

Presidential candidate Cleveland shook hands with his supporters one by one, demonstrating his approachability. After exchanging pleasantries, he stood on a makeshift platform made of several wooden crates and began his speech.

The core message of the speech was very much about "running for president," as Cleveland had been bitterly criticizing Republican President Harrison.

This vulgar fellow not only stole his own presidency four years ago, but also used tariffs to push the American people to the brink of hardship and collapse.

Mr. Cleveland believes that protective tariffs are "the mother of trusts," as they raise the cost of living for ordinary people.

It has enriched a few industrial giants, but exploited ordinary people and farmers.

At the end of his speech, Cleveland pledged to implement fairer trade policies to revitalize the hard-hit agricultural state. He also addressed concerns about emerging monopolies and championed the necessity of fiscal austerity and the gold standard.

The entire process, though lively, was not excessively lengthy. After his speech, Cleveland shook hands with several key supporters again, then boarded a carriage surrounded by the crowd to head to his hotel.

The rest of the Democratic Party team boarded the carriage, except for Kennedy, who remained behind. He waved his cigar at Larry and said with a smile, "I've already prepared a gift for you! Larry, why don't we go to the platform together and have a cigar together?"

Larry smiled and nodded, then followed Kennedy to a quiet spot on the platform. The two lit cigars and chatted as if they were old friends reunited.

"You came to Chicago, surely not just to make friends?" Kennedy asked, a smile spreading across Larry's face. Larry laughed and corrected him, "You're mistaken, sir! It's not about making friends, it's about making connections with the powerful! Mr. Altgillder is the incoming governor of Illinois next year! Without your recommendation, I would never have met such an important person."

Looking at Larry's sincere gaze, Kennedy waved his hand. "It's nothing. As you said, he was originally one of the implementers of the Democratic Party's barbecue and milk tea project. As the company's founder and senior advisor, it's perfectly reasonable for you to provide him with some project guidance. Oh, by the way! Have you done any analysis for him regarding the current situation in Chicago?"

"What kind of analysis are you referring to?"

"Just like you analyzed for me, such as campaign strategies and policy directions." Kennedy's face was calm, as if he were casually mentioning the matter.

Larry knew that Kennedy cared deeply about whether he would share his campaign strategy with others.

"How could that be?! The future governor is a very confident man; why would he listen to a layman like me analyze current affairs?" Larry said with a self-deprecating smile. "Actually, I just explained to the governor the unfortunate circumstances surrounding the railroad workers' strike and the horror of the New Holmesburg massacre. After listening, the governor decided to use his position to negotiate with the North Pacific investors to prevent a similar tragedy from happening at the steel mill."

Kennedy nodded, and after a moment said, "I've already suggested to Mr. Cleveland that we embark on a 'Wheat Road' speaking tour, focusing our votes in the Midwestern swing states where low grain prices are hurting farmers."

"—My God! This is absolutely ingenious!"

Larry looked surprised. He deliberately thought for a moment before saying, "The grain market has already collapsed. This year's bumper harvest will only bring hardship to farmers. Your selection strategy is very accurate and brilliant!"

Kennedy gave Larry a deep look. "I've heard you're shorting wheat here in Chicago?"

Larry's heart skipped a beat. How did he know his whereabouts? Was he being followed in secret? Or had someone in his team leaked classified information?

Of course, despite being extremely terrified inside, Larry appeared relaxed on the surface, as if it were a matter of course. "I'm just trying to make a living, there's no such thing as short selling! It's really just doing some speculative trading based on market conditions."

Kennedy gave him a mysterious smile, then changed the subject, saying, "I told you before about setting up a bill clearing company. Are you ready?"

Larry nodded. "I asked a friend in New York to help me with this. I didn't expect setting up a liquidation company to be so complicated—there are so many guild and qualification issues—" At this point, Larry frowned and looked at Kennedy. "Is this company really that important?"

"Of course! This is my way of repaying you for your help," Kennedy said seriously. "How did I know you were shorting wheat?"

A liquidation company? Do you know how to short sell?

Larry had a sudden realization and immediately understood the connection between the two seemingly unrelated things.

"You mean liquidation qualifications! You're doing this for me, my God! Mr. Kennedy, you're so generous."

Back in Boston, Larry helped Kennedy resolve a political crisis. When Kennedy visited Larry, he not only brought a $15 thank-you gift but also offered to give him shares in Ford Motor Company for free.

Even with the original principal, that's a $20 investment!

Larry was not interested and rejected Kennedy's offer because the matter needed to be handled more discreetly.

Then Kennedy surprised Larry with another offer: he demanded that Larry establish a clearing house.

The exchange of $20 worth of Ford stock was naturally not cheap. But Kennedy didn't reveal the reason behind it, and Larry didn't ask.

The mystery has now been solved: the clearing company established by Kennedy and Larry was actually intended to grant him a more secretive and valuable quid pro quo—clearing center membership.

Larry didn't understand the value of clearing members before. It was only after he came to Chicago and studied the exchange rules that he gradually learned about the internal operating logic of trading institutions.

Clearing membership is incredibly appealing! It represents a ticket to becoming a controller of financial infrastructure.

Contrary to popular belief, the most important thing between exchanges and banks is not business operations, but clearing and settlement.

The clearing member is responsible for clearing the net amount of checks and bills among members daily, thus avoiding the need for cash settlement for every transaction.

The same applies to stock exchanges and futures/commodity exchanges. In fact, clearing and settlement are far more important than the trading itself.

If a financial institution is a member of a clearinghouse, it can gain an intelligence advantage. For example, it can have priority access to funds that other banks want to lend; it can even participate in issuing "clearing notes" during times of panic, which is equivalent to temporary interbank currency.

On the other hand, clearing membership also offers an informational advantage. It allows clearing members to know the daily position flows of various banks and to predict market risks.

For liquidation members, it's crystal clear which powerful figures or companies hold what kind of stock positions.

No wonder he knew his holdings!

Larry cannot rule out the possibility that Kennedy is also secretly watching him, but if Kennedy gains control of the liquidation membership, the matter will become clear!

Because to the rule-makers, all the visible power struggles and infighting among traders are like a newborn baby, completely naked.

There's an old saying on Wall Street: "The one who can print money is always more powerful than the one who can guess the price!" And clearinghouse members are the people closest to printing money in this era.

Thinking of this, Larry immediately realized that Kennedy's answer of "giving him a big gift" was definitely not just to reveal the answer to him—he must have something else to ask of him.

Kennedy saw the excited flush rise on Larry's face, a smug smile playing on his lips. He then said, "Mr. Livingston! Although our friendship began by chance, I firmly believe you are the smartest and wisest stock trader I have ever met. Our alliance is both about interests and a powerful partnership. As long as we can unite, we will achieve even more in the future!"

"Of course, Your Excellency!" Larry said decisively, "For example, what you just mentioned about liquidating membership qualifications—"

This is something I never even dared to imagine before!

Kennedy took a puff of his cigar and said casually, "Right now, I can only help you secure clearing membership at the Boston Consulting Group, but later—if you do well, this good thing will extend to the NYSE, the CME Group, and interbank clearing. But that's more complicated—because those all require the backing of even stronger financial institutions."

"In any case, you've helped me get started! I'm incredibly grateful for your help!" Larry said sincerely.

"This is what two allies should do! You get on with the liquidation of the company and get it started!" Kennedy glanced at Larry and continued, "However—I need your help now too."

Larry thought to himself, "Here it comes! This is where the important part comes in!"

"Tell me! If there's anything I can do, I'll do my best!"

Kennedy nodded, his tone becoming serious. "There are two things we need your help with—of course, these aren't easy tasks—but if you can truly help us, in addition to clearing memberships, the Democratic Campaign Committee will offer other rewards!"

That evening, the autumn night enveloped Chicago. On the shores of Lake Michigan, the newly completed art school building was brightly lit.

This magnificent Romanesque building, its white marble facade gleaming like ivory under the gaslights, is hosting a dinner tonight in the Grant Restaurant on the second floor to welcome Democratic presidential candidate Cleveland.

Larry Livingston and Kennedy stood by the enormous arched window, looking down at the crowds gathered in Grant Park below. The scattered candlelight and lanterns formed a sea of ​​Cleveland supporters and protesters.

Inside the hall, the gilded frames of oil paintings, the glow of crystal chandeliers, and the intimate whispers of gentlemen and ladies created a magnificent oil painting, isolated from the turbulent Chicago outside the window.

"Harrison's men have finally arrived!" Kennedy sighed softly as he watched the people enter from the lobby downstairs.

Larry looked down at him, following his gesture. Several key Republican funders from the state, carrying canes, were solemnly walking into the hall.

Leading the group was a burly old man with a domineering expression. Last was a sharp-witted 30-year-old with a constant smile on his lips.

Larry's gaze naturally fell on the young man. "Who is this? He looks very young. Has he already become a major donor to the Republican Party?"

"William Clappo Durant!" Kennedy's voice rose slightly. "He's a marketing genius. He can sell sand to Arabs! He's the king of carriages in the country! His factory produces the most and most luxurious carriages in America. During this railroad workers' strike, everyone switched to buying carriages and freight cars—he made a fortune."

Durant —

Larry felt he had heard the name somewhere before, but where?

Larry's memory was always excellent, but this name seemed to be buried deep in the distant past. It felt like it was on the tip of his tongue, but he just couldn't recall it at the moment.

An hour later, the dinner began.

Larry, as a guest of the Democratic Party, was seated at the lower end of the banquet table.

The banquet maintained a facade of polite greetings, and Cleveland, facing his many wealthy patrons, maintained a dignified demeanor in the absence of public scrutiny.

He stood on the stage, smiling, and told a few jokes to liven things up. He then talked about his governing ideals, subtly reminding his investors that investing in him would yield a higher return on their assets.

The capitalists and prominent families from Illinois were very accommodating, and the private dinner began in a harmonious atmosphere.

These dinners typically include a discussion session where people seem to be exchanging opinions on current events, but in reality, they are trying to gauge Cleveland's stance.

Of course, such conversations with a sense of self are often based on telling jokes or a relaxed discussion atmosphere, because everyone wants to maintain their dignity.

However, if the donor and the presidential candidate reach a point of mutual understanding, they will meet privately later to discuss the core issues of specific exchanges of benefits.

It was somewhat like a salon for European nobles, where gentlemen and ladies would get so engrossed in conversation that they could easily develop a romantic relationship in private.

But one person broke this tradition!

"Mr. Cleveland, I do not agree with your first speech in Illinois!"

An old man pressed his wine glass against the white linen tablecloth, his face ashen.

Everyone turned to look in surprise, including Larry, only to see that the man was the "Harrison's man" that Kennedy had mentioned, the old man who was in charge.

Cleveland's expression was grave. He politely asked, "Sir, may I ask your name? This is the first time I've met you, please forgive my intrusion."

"My name is George Pullman! I'm the owner of the Pullman Palace Railway Company!" the old man replied.

Larry was surprised, never expecting that the Pullman luxury sleeper train he rode every day was this old man's property. "I've heard so much about you! What parts of my conversation displeased you? We can talk about it frankly now," Cleveland replied calmly.

"In your speech, you emphasized the plight of farmers and railway workers. I understand your good intentions, but allow me to be frank. Excessive sympathy sends the wrong signal!"

My Pullman town provides workers with everything from housing and churches to libraries! True order comes from self-discipline and diligence, not endless compromise!

Some of the current strikes are less about demands and more about a desecration of the spirit of contracts! If the government continues to give in, it will only encourage laziness and illegal violence, ultimately damaging all law-abiding businesses and the fundamental order of the economy!

Pullman launched into a long speech, his tone growing increasingly forceful.

All the attendees focused their attention on Cleveland's face, eager to see how he would answer the question.

Cleveland thought for a few seconds. He needed to win over moderates, but he couldn't directly provoke the industrial giants. So, the presidential candidate smiled and said...

"Mr. Pullman, I admire your dedication to business management. But good intentions need to be accompanied by an insight into reality. When the price of a bushel of wheat has fallen from the glory of our fathers to the point where it cannot even cover the cost; when despair is left on the tables of Midwestern families; simple appeals for order cannot fill the void of people's suffering, nor can they quell the anger of a father who cannot feed his children."

The government's responsibility lies in understanding the root causes of this suffering and seeking just solutions, not merely in using force to maintain a superficial calm.

Larry nodded slightly. Cleveland was emphasizing people's livelihood and directing the conflict toward economic policy rather than the quality of workers.

Just as Pullman's expression darkened further at Cleveland's sarcastic reply, and the atmosphere nearly froze, William Durant calmly raised his glass with his signature, infectious smile.

"Gentlemen, gentlemen!" His clear voice instantly drew everyone's attention. "Please allow me, a businessman who has made a little money by making Americans more comfortable and goods run faster, to say something that may be a bit inappropriate—a digression."

All eyes immediately turned to him. Durant, with a confident smile on his face, also looked around at everyone.