Louis Auchincloss’s 1966 novel The Embezzler is the story of the scandalous decline and fall of the New York stockbroker Guy Prime. The novel is a series of three interlocking and occasionally conflicting memoirs related by the scandal’s three major players—Guy Prime, his wife Angelica, and his best friend Rex Geer. The financial scandal is a fairly simple one compared to 21st century financial scandals like the Bernie Madoff debacle. Guy embezzles money from a trust fund intended for his wife and children, as well as from a building fund he collected for his country club. He then uses the money as security for some of his own risky investments.
In an interview with George Plimpton in The Paris Review, Auchincloss discussed the fact that he had based the details of Guy’s scandal on the Richard Whitney case, which was the most shocking financial scandal of Auchincloss’s college years.
…[I]t wasn’t believed that the President of the New York Stock Exchange could behave that way. He embezzled the Stock Exchange gratuity fund, his wife’s trust, and some funds belonging to the New York Yacht Club. They represented a total of three hundred thousand dollars. What he owed was twenty million dollars. J.P. Morgan and Co., of which his brother was a partner, would have bailed him out except for the three hundred thousand. When they found out about that, they had to drop him because they couldn’t abet a crime, certainly not after they had talked to their lawyers. Oddly enough the crime involved only a trivial part of his deals, yet it was the thing that upset the whole apple cart.
Similarly, most of Guy Prime’s business practices are quite risky, and he is often prone to bad luck. As he argues, “I wonder if even the wisest watcher of the market could have foreseen the hurricane that wrecked my Caribbean resort island, the patent suit that delayed the production of my Vita-Glass houses, the title flaw that paralyzed my phosphate mines, the federal investigation that slandered my tranquilizer pills.” Whether the wisest market watcher could have or not, Guy Prime certainly couldn’t. And, of course, it is the relatively petty embezzlement coupled with the mingling of personal finances with business finances that brings him down.
While Guy’s actions are undeniably criminal—even Guy does not argue that he was innocent or that his jail time was unjustified—one gets the overwhelming impression reading The Embezzler that Guy Prime is a man caught in a period of transition between two financial eras.
Called before a Congressional committee investigating the need to regulate the stock exchange, Guy notes that, “Its finding spelled out the end of the age of the gentleman in all the complacent jargon of the new panacea” and quotes the committee as saying, “These men regarded the Exchange more in the light of a private club than a public institution. . . . This kind of code is hardly a policing adequate to protect the interests of today’s investing public.” It is “this kind of code” which has guided Guy’s life from his earliest days—the guarding of family interests, the preservation of reputations and the protection of friends at all costs. It is a very old-fashioned code—one that is “aristocratic” in the McCloskeyan sense. Guy is the symbol of its strengths and its weaknesses, and he is the harbinger of its inevitable collapse. With the New Deal regulations enacted as a result of the committee’s findings, Guy becomes, in the end, “A symbol of financial iniquity, of betrayal of trust, of the rot in old Wall Street before the cleansing of the New Deal. If I had not existed Franklin Roosevelt . . . would have had to create me.”
The regulatory creep that eventually takes the stock exchange from the private boys’ club world of Guy Prime and his forerunners is a matter of concern in the novel before Guy’s scandal is used as an excuse to precipitate matters. Guy’s memoirs recount a conversation from his college years with a family friend about the Sherman Anti-Trust Act. The friend notes, “I wonder if the cure isn’t worse than the disease. It may be one thing to suffer the slings and arrows of outrageous magnates, but it’s quite another to live in a police state where no man is allowed to distinguish himself from the mob. . . . I don’t say that I want a world populated only by Borgias and Medicis, but if you legislate them out of existence, don’t you lose your Da Vincis and your Michelangelos too?”
The conflicts—the fight between a world of private financial dealings and one of public disclosure, and the battle between an industry that promises to be (but may not succeed in being) self-regulating and the government that would like to regulate it—are the conflicts of Auchincloss’s The Embezzler. Guy Prime is a crook, as he somewhat cheerfully admits. But readers of his story must be given pause by the challenges he presents to our definitions of crookedness.
I could laugh, I suppose, today, if I were not nearer tears. I have lived to see morals become frankly a game and businessmen treated by government as schoolboys are treated by strict masters. Prominent men now go to jail for evading taxes, or fixing prices, or forming monopolies, but nobody thinks the worse of them. In public life there may be rules of conduct, but they are purely formal ones. A presidential adviser may not accept the gift of a wristwatch from an old friend, but the senator who denounces him may make millions in office.
Our regulated society, says Guy, like the money lost by his investors, is “the price . . . paid for the luxury of sending me to jail.”