People began muttering that . . . yes, this was the best thing; yes, there must be another subscription. It was as if they did not yet understand the meaning of what he had said. Many people were so dazed they stood frozen, saying nothing at all, little expression on their faces. When someone finally asked how the picture could possibly have changed so drastically overnight, Charles answered: “My father is younger in spirit than I. His remarks were made on the strength of a hopeful report that I made to him. The result is bankruptcy or the winding up of the company.”
The morning after, December 14, the company suspended payments and petitioned the government for a three-month moratorium on bills and interest, so that a new company could be organized to continue the work. The news was immediately put on the wires and within hours newspapers around the world carried the story of “The Great Canal Crash.” At the Palais Bourbon, on the other side of the Seine, the Chamber of Deputies convened at once and the following day, December 15, 1888, turned down the proposal by a vote of 256 to 181. Within hours the appropriate court, the Tribunal Civil of the Department of the Seine, appointed three temporary receivers to administer the company’s affairs.
It was a reporter for Le Figaro, arriving at de Lesseps’ home just ten minutes after the vote in the Chamber, who told him how the vote had gone. De Lesseps turned dreadfully pale, the man wrote afterward, and could only whisper, “It is impossible! It is shameful!”
The pallor and the loss of words were but momentary, however. Instinctively the old reflexes responded. He was in motion again, issuing statements, talking of new schemes. The company was in wreckage, the government had turned its back; the long battle was ended and he had been crushed. It was Sedan again for France, yet he refused to accept that–he was incapable of accepting that.
For his family and friends the next weeks were an agony, as he drove himself and others in a final, hopeless attempt to pick up the pieces and rally his forces. Demonstrations of popular support were staged throughout the country. At one in Paris, in the Palais d’Hiver, a huge ice-skating rink, five thousand of the faithful turned out. “Shall we pledge ourselves, each according to his means, to aid this great enterprise by purchasing new shares of Panama stock?” one speaker had cried and the response was thundering, “Oui! Oui!”
H. B. Slaven arrived in Paris and there were daily conferences on the Rue Caumartin. It was announced that the major contractors would continue all essential operations for the time being, working on credit, since any abrupt cessation of the effort would mean the certain ruin of machinery worth millions of francs (machinery all belonging to the company), as well as tremendous damage to the unfinished excavation.
A new company would be launched, de Lesseps said, and in late January new stock actually went on sale. The idea never had a chance, of course; of 60,000 shares, all of 9,000 were sold.
The official end came on February 4, 1889. In accordance with a desire formally expressed by shareholders in the original company, the Tribunal Civil appointed a liquidator. The Compagnie Universelle du Canal Interoceanique was no more.
8
The Secrets of Panama
“What have you done with the money?”
–EDOUARD DRUMONT
I
It was nearly three years later when the Panama scandal broke wide open, rocking France to its foundations. Between times, the great Universal Exposition of 1889 had been staged beneath Gustave Eiffel’s gargantuan tower, and French political life went along little changed from year to year, one ministry succeeding another, despite the flaming oratory, despite the Boulanger crisis. General Boulanger, “the strong man,” having sat out his chance to seize power, having escaped to Brussels with his adored mistress, Madame de Bonnemains, had also, soon after her death, shot himself at her graveside.
Panama, to be sure, had remained a major topic. Some 800,000 French men and women had been directly affected, the savings of entire families had utterly vanished. People who could ill afford to lose anything had lost everything. Still, no panic had been touched off when the company went under. There were no demonstrations in the streets May 15, 1889, the day the liquidator ordered that the work be halted on the Isthmus. Instead, shareholders submitted their grievances by formal petition, in polite, written pleas for redress through government action. Tempers cooled; rumors of fraud and political payoffs were denied or discounted or simply grew stale. When the liquidator established a special committee to go to Panama and estimate the cost of finishing the canal, many shareholders actually took heart, convinced that the government was about to rescue them.
Among those who had been distrustful of the Panama proposition all along and remained clear of it, there was the feeling that such was life for the unwary, that sheep were there to be shorn. For the rest, for nearly everyone as time passed, there was the feeling that Panama was best put behind. The prospect of the tragedy being compounded by a sensational and ruinous scandal was neither anticipated nor desired by the public at large. And very possibly there would never have been an affaire de Panama had it not been for the country’s leading anti-Semite, the strange, secretive Edouard Drumont.
Edouard Drumont, a devout Roman Catholic, a professed lover of history, had observed the world about him and concluded that the sickness of modern France–by which he meant France since “La Debacle” –was finance capitalism and that the nation’s most treacherous human foe was the Jew. The Jew by his very nature, said Drumont, had no sense of justice, none of the finer sensibilities that made civilization possible. Jews were carriers of disease, born criminals and traitors, who could be recognized by their “crooked nose, the eager fingers, the unpleasant odor.” He had said this and much more in La France Juive (Jewish France), a book of more than a thousand pages that appeared in 1886, that ran to more than a hundred editions and made the author famous–feared, despised, secretly admired–throughout the country.
Drumont was black-haired and spectacled, with a thin, hooked nose, and a thick black beard and mustache that together masked the whole lower half of his face so effectively that his mouth was all but hidden. Many people thought he looked Jewish. His wife was dead; he had no children; he kept his money hidden in secret nooks and crannies about his house. By profession he was a journalist, and until the appearance of La France Juive, he had been tremendously frustrated by lack of recognition, having tried his luck as a traveling salesman and a novelist but without success.
That his elephantine tract received such phenomenal attention was in itself a point of fascination, since anti-Semitism had been rare in France. Beyond Paris it was hardly known. Drumont’s assertion was that there were 500,000 Jews in France; in reality there were perhaps 80,000. But it was the time of the pogroms in Poland and the Ukraine, and those refugees who had found their way to France, though comparatively few in number, were highly conspicuous and had aroused anxiety among some elements of French society, including French Jews. More important, there was the growing belief that finance capitalism had become a conspiracy, that the country was in the grip of the financiers, and that in the face of such power, the small shopkeeper or the ordinary workingman counted for little.
It was for the Jewish monarchs of finance–the Rothschilds, the Ephrussi–and those Christians who courted the favor of such people that Drumont reserved his worst venom. Saint-Simonianism was declared to be nothing more than a device of the Jews to lift themselves out of the ghetto. The Franco-Prussian war had been engineered by Jews. If examined closely, all failures in modern French society could be traced to the Jewish capitalist system, Drumont asserted.
So with the fall of the Compagnie Universelle–the greatest of ventures thus far in finance capitalism–he naturally began looking into things.
The initial result was another book, La Derniere Bataille (The Last Battle), a self-styled “history” of la grande entreprise that appeared in 1890 and became a runaway best seller. How could a forthright government fail to audit the canal company’s books? Drumont demanded. How could the likes of
Ferdinand de Lesseps be permitted to walk about a free man? “This evil doer is treated like a hero. The poor devil who breaks a shop window to steal a loaf of bread is dragged . . . before the judge of a criminal court. But into this affair, which has swallowed up almost a billion and a half [francs], there has been no investigation whatever; not once has this man been asked: ‘What have you done with the money?’ ” Le Grand Français, he cried, was in fact a great fraud, a cheat and liar, a fountainhead of corruption. He painted a vivid and greatly distorted picture of extravagant luxuries on the Isthmus and took special pleasure in a vicious, personal assault on Jules Dingler. Dingler’s house had cost $1,000,000, he insisted. “This man, who seems to have endured heavy afflictions but who was a stranger to every sentiment of justice and humanity, was hated so bitterly that the death of his wife became the occasion of a merry festival. Champagne flowed in torrents . . .” Sixty percent of the workers had died, he claimed. The death count could not have been less than thirty thousand. “The Isthmus has become . . . an immense boneyard. . . .” Presently, he founded his own newspaper, an illustrated anti-Semitic daily called La Libre Parole (Free Speech). His chief lieutenants included such individuals as Jacques de Biez, who enjoyed asking priests if it was true that Christ was a Jew (“Drumont doesn’t mind,” he would say, “but I can’t swallow it!”), and the Marquis de Mores, an aristocratic psychopath whose wife was Medora von Hoffman, daughter of a Wall Street banker. On one occasion de Mores, who was a crack shot, had stood in for Drumont in a duel and killed a French Army officer, a Jew who had challenged Drumont as a result of certain insulting remarks about Jewish officers in La Libre Parole. Drumont and de Mores were accused of staging the whole episode, as a kind of execution, and de Mores was tried for manslaughter but was acquitted.*
La Libre Parole was no runaway success, however, not, that is, until September of 1892, when Drumont broke a series of sensational stories under the title “The Secrets of Panama,” these signed “Micros.” The “Jewish plot” at the heart of the Panama tragedy had at last been found and enough else had begun to happen meantime to make the public sit up and take notice.
The chief magistrate of the Paris Court of Appeal, Samuel Perivier, under orders from the Minister of Justice, had appointed a court counselor and an expert accountant to audit the canal company’s books and to interrogate various former officers, including Ferdinand and Charles de Lesseps. The charge was fraud and breach of trust.
Ferdinand de Lesseps had made an unforgettable appearance before the court counselor, a man named Henri Prinet. For nearly two years de Lesseps had been living in seclusion. In the early months of 1889, after the company failed, he had tried manfully to assist in the liquidation process, while at home he went through the customary motions as head of the family. From the upper floors of the big house on the Avenue Montaigne, he–all of them–had been able to watch Eiffel’s tower rise higher and higher as the spring of 1889 and the opening of the exposition approached. But by that summer he had become a distant, bewildered old man. In recent months he had been confined to his bed under the care of a physician.
Yet on the day he was to appear before the court counselor, he suddenly revived. It was as if something had clicked on inside the ancient head and suddenly he was himself again. Charles afterward described what happened:
The doctor . . . expressed the opinion that it would be very imprudent for my father to go out. . . . Nevertheless the meeting had to take place sooner or later; I hoped that one conference would suffice and . . . so I thought it better for him to suffer the shock immediately. . . . My father rose from his bed and . . . said: “I shall go.” He dressed, and by the time he reached M. Prinet’s he had apparently recovered all his strength; he remained three quarters of an hour . . . and when he left his face radiated charm and energy as it always did under difficulties.
It is not known what de Lesseps said in the interview, other than that he defended his management of the company and the canal itself. On returning home, however, he went straight to his bed and for three weeks he hardly stirred, saying nothing to anyone other than to tell his wife a day or so later that he had had the most horrible dream. “I imagined,” he said, “I was summoned before the examining magistrate. It was atrocious.”
The homes and offices of company officials, and of Gustave Eiffel, were gone through by police and documents were seized. On January 5, 1892, in response to persistent prodding by a hotheaded young Boulangist named Jules Delahaye, the Chamber of Deputies voted unanimously for “resolute and speedy action” against all those involved in any foul play in the Panama business. Next, the court-appointed accountant who had been auditing the company’s books reported that though he found no sign of company officers profiting personally, he nonetheless thought several of them were indictable for misuse of funds and for willfully deceiving the public.
But these were faint tremors compared to the impact of the so-called “Micros” articles in Drumont’s paper, the first of which appeared September 10. “Micros,” as was later divulged, was a pseudonym for Ferdinand Martin, the banker from Nyon who had organized the first petitions for a lottery in 1885. That great show of popular support, as Martin would testify, had in fact been wholly conceived and organized in the offices on the Rue Caumartin. He had been paid for playing his part, but not enough in his view, and as a result he had had a falling out with Charles de Lesseps the following year. The articles for Drumont were his way, six years later, of evening the score.
The articles charged that twenty members of the Chamber of Deputies and the Senate had been bribed by the canal company to vote for the lottery bond bill and that the prime fixer for the company was Baron Jacques de Reinach. A director of the company, Henri Cottu, had been involved, as had the publisher of L’Économiste Pratique, a man named Blanc. The actual cash deliveries had been made by one Leopold-Emile Arton.
Arton, or Aron, as he was also known, was a flashy, out-and-out swindler, a former sales agent for the Societe de Dynamite, the explosives trust, who had once unloaded a bad shipment of dynamite on the unsuspecting canal officials and as a reward had been placed in a secretarial position in the Societe’s head office. Thus established, he had then managed to embezzle somewhere in the range of 4,600,000 francs, and at the moment, with a warrant out for his arrest, he was no longer to be found in France.
Almost daily La Libre Parole provided additional bits and pieces, bearing down heavily all the while on Jacques de Reinach. It became the most eagerly read paper in France. Other Paris papers quickly took up the scent. To a powerful figure such as Arthur Meyer, publisher of Le Gaulois, a royalist paper, the scandal was the long-awaited chance to topple the Republic, and so every new revelation was given full play, irrespective of the fact that Meyer was himself a Jew.
When La Cocarde, another right-wing paper, carried an interview with Charles de Lesseps that appeared to confirm the “Micros” revelations, a new Minister of Justice, Louis Ricard, felt compelled to act. De Reinach, Cottu, Blanc, and Charles de Lesseps were summoned for interrogation. All but de Reinach either denied the allegations or refused to reply; the publisher Blanc was so convincing that he would not be bothered again. De Reinach conceded to the interrogator, Henri Prinet, only that he had given Arton 1,000,000 francs to use for publicity and that he personally had distributed large sums to the press–in excess of 3,000,000 francs–but that he had certainly never bribed anyone in a position of public trust.
Convinced of the baron’s guilt, Prinet ordered the commissioner of police to see de Reinach at his home at once and to confiscate all papers relating to his Panama dealings. For some unexplained reason, however, the commissioner allowed several days to pass before doing anything. When he appeared at de Reinach’s door in the fashionable Pare Monceau quarter, he was told the baron had gone to the Riviera. So no papers were obtained.
Drumont’s charges, meantime, had become far more specific and detailed. It was plain that he had found a new inside source, somebody who kn
ew precisely how the Panama business had been run. With the public outcry mounting, the Ministry of Justice was under tremendous pressure to act. Delahaye and others in the Chamber were demanding a parliamentary investigation. But Premier Émile Loubet and his Cabinet held back, urging prudence, urging patience, hardly daring to make a move, living only day by day and fearing the worst. None could say how many old friends might have been involved, who might be destroyed were the avalanche to let go.
In October the public prosecutor, one Jules Quesnay de Beaurepaire, proposed a civil suit for damages, instead of a criminal trial. He had no wish to see Ferdinand de Lesseps in prison. His purpose, he stated, was to provide some restitution to the ruined shareholders rather than to impose “the sterile penalty of imprisonment upon an octogenarian in his dotage” So now the government had to decide, and at length, on November 15, a special meeting of the Cabinet was convened. Premier Loubet, small and spotlessly groomed, excused himself from any part in the decision, saying it should be the prerogative of the Minister of Justice. (Such deference was a quality hitherto unknown in Premier Loubet.) The decision had already been made, declared the Minister of Justice, Ricard, who was large and fat and had creamy-white side whiskers. He had ordered that criminal charges be brought against Ferdinand de Lesseps and the others thus far implicated.
But on Monday morning, November 21, the morning the summonses were to be served, Paris awoke to the stunning news that Baron Jacques de Reinach had been found dead.
The papers were vague on details. It was known only that when his valet went to wake him as usual at seven Sunday morning, he found on entering the bedroom “a member of the family” who turned and said the baron was dead. The “member of the family,” as later disclosed, was the baron’s nephew Joseph Reinach (without the de), an influential editor, and it was he who reported the death first to Adrien Hebrard, of Le Temps.
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