Help me make sense of this exchange from Edna Ferber's Show Boat

In Chapter Nine of Show Boat, the down-on-his-luck river gambler Gaylord Ravenal boards a boat called the *Lady Lee *in St. Louis, planning to disembark at Memphis or Natchez. After becoming wrapped up in an unprofitable game of poker that lasts for days, he fails to get off at either port. To make things worse, the boat lands in New Orleans. The New Orleans chief of police, Vallon, has been cracking down on professional gamblers and requiring them to leave the city within twenty-four hours of arrival or face legal consequences. Ravenal is being monitored even more closely there because of his earlier involvement in a deadly gambling dispute. As ordered, he goes to see Vallon before doing anything else:

I’m not very quickwitted, either, because I just can’t find the punchline here. I had thought it might be some kind of reference to Freud, but although the book was published in 1926, this scene is set in the 1880s.

Vallon offered Ravenal a cigar that was too slim for Ravenal to consider it a cigar, and it had already been smoked on by somebody. He’s making a little joke about the terminology, that’s all. He’s saying, “If you call that a cigar, you’re an optimist.” Or in other words, “That’s not what I consider a cigar.”

Thank you. I’d been going crazy over this.