Part 11

At a quarter past two that afternoon, the afternoon of Friday, March 20, 1908, Monsieur Yves Durand returned to the Police Prefecture and told Monsieur Lépine what he had done. Monsieur Lépine sent Monsieur Yves Durand to the Procureur de la République, Monsieur Monier (Monsieur Monier has been promoted since and is the high legal authority whom Madame Caillaux consulted on the morning of the day she shot Monsieur Calmette, as to the means of putting a stop to his campaign against her husband), whom he was to advise of the existence of a plaintiff ready to prosecute Rochette.

Monsieur Lépine, in his evidence before the Parliamentary Commission of Inquiry, explained that he had hoped to get the whole matter settled that same day, or at all events between the closing of one Bourse and the opening of the next, so as to avoid news of the prosecution being allowed to leak out and to be used as a basis for speculation. However, Monsieur Monier told Monsieur Yves Durand that he would see Monsieur Pichereau on the next day, Saturday, at two o’clock, and he informed the Procureur Général and the Minister of Justice that a charge in due form was to be laid against Rochette on the morrow. At ten o’clock the next morning, Saturday, March 21, Monsieur Yves Durand went to Monsieur Gaudrion at his office and told him that the Procureur de la République would receive Monsieur Pichereau’s charge at two o’clock that afternoon at the Palace of Justice. Monsieur Pichereau was in Monsieur Gaudrion’s office, and had drawn up and signed his accusation against Rochette. Monsieur Gaudrion read it through to Monsieur Yves Durand, who was not in the least aware that Monsieur Pichereau was not the proprietor of Nerva shares and Hella Gas Mantle shares as he stated himself to be in his accusation, but that Monsieur Gaudrion was really the shareholder, and that Pichereau was only a man of straw. Gaudrion was a speculator. He had sold shares “short” in the Rochette enterprises, and seeing his way to a Bourse _coup_ he had coached Pichereau in the part he was to play, given him a few shares of his own with which to play it, and paid him a thousand pounds so that he should be able to make the necessary guarantee on bringing his action and have something over for himself.

Monsieur Yves Durand, who got himself into terribly hot water over these preliminaries when the whole matter came to light, and who was openly accused of speculating himself on the fall of Rochette shares, declared that he was quite unaware of this dishonest combination, and that he had been misled by Monsieur Prevet, who had told him that he knew all about Gaudrion and about Pichereau as well. At a quarter-past two that afternoon Pichereau laid his formal charge against Rochette at the Palace of Justice, deposited £80 by way of guarantee for costs, and signed a request to be a civil party to the action. The matter was placed in the hands of the examining magistrate, Monsieur Berr, for his immediate attention, and poor Monsieur Berr sat up all Saturday night and all Sunday night, and worked through all day on Sunday at the Rochette _dossier_. At ten o’clock on Monday morning, March 23, 1908, Rochette was arrested.

Of course the arrest of Rochette created an immense sensation, and equally of course it occasioned the downfall of the shares of the companies in which he was interested. But while these shares tumbled headlong, an immense wave of public indignation swelled against the financier’s arrest, for so far from finding empty coffers at the offices of the Crédit Minier, the authorities admitted that there were, in cash, £240,000 at this office, and £160,000 more at the Banque Franco-Espagnole, a sister enterprise of Rochette’s. Rochette had been arrested and sent to the Santé prison on Monday, March 23, 1908. On Wednesday he wrote a letter to the examining magistrate, Monsieur Berr, in which he protested with some appearance of justice against his arrest and the situation created by it for the shareholders of his companies. “It is my duty,” wrote Monsieur Rochette, “to declare that on the day of my arrest I left the industrial and financial companies under my control in an excellent situation. There were about £240,000 in cash in the safe of the Crédit Minier, and £160,000 in the safe of the Banque Franco-Espagnole. This makes a total of £400,000. If I were a malefactor, as attempts are being made to prove me, it would have been easy for me to get out of my difficulties. I was advised from all sides of the intrigues which were in course against me under the leadership of a few men who considered that the growing prosperity of my companies threatened the enterprises of which they were at the head. It was these men who put up the plaintiff Pichereau. It was these men who managed to get you to take action, and who are really responsible for the exceptional measures which have been taken against me and the establishments which I control. You have put me in prison, sir, and you have refused to allow me to communicate with anybody except yourself outside the prison. You have given orders for the dismissal of all the clerks of the Crédit Minier and the Banque Franco-Espagnole. You have closed these establishments. You have given orders for the closing of all the provincial branches. You have struck a terrible blow at these companies, without having heard what I have to say, without having questioned me, without any preliminary examination by accountants of the financial condition of my banks, without the slightest concern for the shareholders or the other people interested. Do you know of any bank, of any financial institution however powerful that would be capable of withstanding such a blow? And for whom, why, on whose account, have you done all this? For Pichereau! On account of one single plaintiff at whose request a judicial examination was ordered, and of whom after four days imprisonment I know nothing at all, for I know neither the man himself nor the charge he has made against me.”

The examining magistrate, on receipt of this letter, confronted Monsieur Rochette with Monsieur Pichereau, and told the financier the exact terms of Monsieur Pichereau’s claim. Monsieur Pichereau claimed to have bought Nerva Copper Mines of the B series, which proved to be unnegotiable, and he put in nine documents to prove it. Rochette declared that the nine documents proved nothing, that before his arrest an attempt had been made to blackmail him, that these same documents had been offered him on that occasion for £3200, and that he had refused the offer. In proof of this, he stated that copies of Monsieur Pichereau’s nine documents would be found among his (Rochette’s) papers in the private desk in his office.

In connexion with these statements, it was proved that a number of attempts _had_ been made to blackmail Rochette, and that he had always refused any advances of the kind. It is needless to say that the arrest of this man and the closing of the banks and shutting down of mines and other enterprises in which he was interested had a disastrous effect on the market. All the money, and there was a great deal of money in Rochette’s safes, had been sequestrated by the legal authorities, and therefore of course no payments could be made. To put one case only, eighteen hundred men and women in the employ of the Syndicat Minier were clamouring for wages which could not be given them.

Eventually the court decided that liquidators should be appointed who should pay out money from a reserve fund of £110,000 which the Crédit Minier placed in the liquidator’s hands for this purpose. In July 1908, Rochette was declared a bankrupt. He resisted vigorously, and even now many people are inclined to doubt whether the declaration of his bankruptcy was legally justifiable. But the whole matter of Rochette’s financial position soon became involved in such a tangle of legal procedure that it is quite impossible to say whether Rochette could have got out of his difficulties if he had been left alone, or whether he could not. It is noteworthy at all events that a very large percentage was paid to his creditors. On the other hand, the Rochette enterprises were wildly speculative, and new flotations were frequently used to fill up financial gaps in former enterprises which were unsuccessful. One thing is very certain, and was proved during the parliamentary inquiry into the beginnings of the Rochette affair. A large number of people, Monsieur Gaudrion among them, had been keenly interested in the downfall of Rochette and had sold quantities of the shares in his companies for a fall some time before it came. Most of them had lost money. Gaudrion, on March 16, that is to say a week before Rochette’s arrest, had been severely bitten by a sudden upward jump, or “‘bear’ squeeze,” as it is called, on the Bourse, and was forced by the rapid rise of Rochette’s shares to buy back with a loss of nearly £5000.

Rochette was tried, and the case went against him, but again there were illegalities in the trial. Information was communicated to the court which was not, as the French law insists that it should be, communicated first of all to the defendant or his lawyer. In the course of the trial the liquidator, who had been officially appointed, announced that he had distributed 50 per cent. to the creditors of Rochette, and that he would be able to pay the 50 per cent. balance integrally. Rochette lodged an appeal against the verdict, and at the same time took legal action against Pichereau for making a false declaration. His appeal was heard, dismissed, and judgment rendered, by the Tenth Correctional Chamber of the Seine Tribunal on July 27, 1910—two years after his original arrest. The case was a long one, very complicated, and proceedings had been obstructed legally, whenever and wherever Rochette and his lawyers could obstruct them. The case, however, provoked considerable scandal. Charges of illegality were made by Rochette and his lawyer, Maître Maurice Bernard, in court and before the case came to court, the Press took hold of the matter, and on July 10 Monsieur Yves Durand resigned and left the employ of the Prefecture of Police. It was proved that this chef de Cabinet of Monsieur Lépine was a sleeping partner in a stock-broking firm which had made a lot of money by dealing in the shares of Rochette companies at the time of his arrest, and though Monsieur Durand was not actually proved to have profited by these transactions, grave suspicion rested on him and made his official position untenable. On July 11, 1910, Monsieur Jaurès brought the question of Rochette’s arrest before the Chamber, and accused Monsieur Clemenceau in clear terms of having proceeded illegally against the man, irrespective of his guilt or innocence.

It is worth noticing that the Rochette question had now become, as almost everything becomes in France, a political matter, and that the Socialists, with Monsieur Jaurès at their head, affected to consider Rochette a victim of arbitrary treatment by vested authority. A Parliamentary Commission of Inquiry was appointed on July 12 to examine the question. Monsieur Caillaux was a member of this Commission, and if he had not just at that time taken Ministerial rank he would very probably have been its president. The first meeting of the Parliamentary Commission was held on July 15. The first witness called was Monsieur Yves Durand, who had been Monsieur Lépine’s chef de Cabinet. His evidence has already been summarized in the last chapter, and need not therefore be repeated. Monsieur Monier, who was at that time Procureur de la République (a position which is more or less equivalent to that of Deputy Public Prosecutor), produced an immense budget of documents, all of which accused Rochette of fraud. These accusations stated that the Nerva Mines Company, the Syndicat Minier, the Banque Franco-Espagnole, the Crédit Minier, Franco-Belgian Union, the Laviana Coal Company, the Liat and Val d’Aran Mines, the Hella Incandescent Mantle Company, and the Buisson Hella, nine companies in all, which Rochette had launched by public subscription, had been floated fraudulently and irregularly. The charge was that these companies had no reasonable prospect whatever of earning money by honourable means, and that there were no real commercial assets for exploitation behind them.

On July 26 Monsieur Lépine was examined by the Commission. He began by affirming that the arrest of Rochette had been perfectly justified, and while admitting that Monsieur Yves Durand had perhaps not been prudent enough in arranging the preliminaries and checking the information he received, he acquitted him of all personal action of a dishonourable nature. He defended the arrest of Rochette, and declared that its consequence had been to put a brake on the wild speculation which Rochette’s issues had created. “I consider,” said Monsieur Lépine, “that the arrest of Rochette turned off the tap and prevented him from making new issues of shares. This preventive measure was a public benefit. Some people lost money undoubtedly, but they deserved to lose it. The speculation mania had been enormous and widely spread. It had been crazy. There were shares which were worth £4 one morning and which were run up to £22 before the same evening. If matters had been allowed to go on like this, financial catastrophe would surely have followed.”

In the deposition on November 16 made before the Commission d’Enquête by Monsieur Georges Clemenceau, the ex-Premier, after declaring that he himself had no personal knowledge of Rochette, described with characteristic brevity the conversation which he had with Monsieur Lépine just before Rochette’s arrest. “This has got to be finished off promptly,” I told him. “Do you believe Rochette to be an innocent man against whom calumniators are at work?” Monsieur Lépine replied: “Rochette is a scoundrel. He is a serious danger to the small investor, and if he is allowed to go on as he has begun we shall have a catastrophe one of these days.” “I told Monsieur Lépine to go and see the magistrates and make arrangements,” said Monsieur Clemenceau. “If I had to begin it all over again I would do again exactly what I did before, and I am quite certain that if I had allowed Rochette to get clear away with his millions out of private people’s pockets then, there would be a Commission of Inquiry at work now asking me to explain my complicity with the man.”

Monsieur Lépine was called before the Commission of Inquiry again on November 18, and once more affirmed his conviction that Rochette’s arrest had been necessary. He gave a few significant details of Rochette’s methods. Rochette had bought properties for £8000 and floated them as a company for £32,000. He had bought the Aratra Mines for £9000, and floated them with a capital of £200,000. Patents for which Rochette had paid £1200, and which, Monsieur Lépine declared, were really not worth four shillings, were valued in the prospectus of the company, which asked for, and obtained, subscriptions, at £480,000. There were fictitious dividends declared, fraudulent balance sheets concocted, prices inflated to figures which had no real existence except by Rochette’s will. Rochette paid enormous sums for advertising. One newspaper alone cost him £14,000. His advertising adviser drew a salary of nearly £2000 a year. On one deal he spent £52,000, for advertisement alone, in twelve months, and he spent £24,000 on advertisement in the ten weeks before he was arrested. In three years he created fifteen companies, issued £4,800,000 worth of shares, and bought over £3,000,000 worth of his own shares at prices above the price of issue to inflate and to keep prices up. He had then about a million and a half sterling in cash to play with.

On July 27, 1910, Rochette was sentenced to two years’ imprisonment and a fine of £120, by the Tenth Correctional Tribunal of the Seine Department. The verdict, with its “attendu,” or reasons, took two and a half hours to read aloud, though it was read with the extraordinary volubility of which only a French clerk of the court possesses the secret. I have this verdict before me in its printed form. It is printed in very small print by the official printing works of the Chamber of Deputies, for the copy I possess was printed for the use of the Commission of Inquiry. The verdict, which is, as I have said, very closely printed, fills forty large quarto sheets of paper. Against this verdict Monsieur Rochette appealed again, and in the meanwhile the Commission of Inquiry spent many full days discussing the questions as to whether Monsieur Clemenceau had really ordered Monsieur Lépine to find a prosecutor against Rochette, whether Monsieur Lépine had really said that Monsieur Clemenceau had given him these orders, whether orders had been given or whether suggestions had been made—the usual waste of time and the usual mass of irrelevant detail which appears to be inseparable from the work of a parliamentary inquiry into any question in any country.

Ultimately, after long, long days of verbiage which appear curiously useless now, Rochette himself was asked to give evidence before the Parliamentary Commission of Inquiry. He was delighted to attend, for he had nothing to lose and he had everything to gain by his attendance. He also had a great deal to say, and said it very well, for Rochette is a born orator. Naturally enough, he took the opportunity of pleading his own case from A to Z once more, and of denouncing the illegality of his arrest in March 1908. He launched accusations against the police, he launched accusations against members of Parliament, he was very rude indeed to financiers of repute. Above all, he was always interesting, and often amusing, and he certainly made his case appear clearer than it had ever appeared before.

His evidence is well worthy of consideration in detail, for it must not be forgotten that one of the men before whom he gave it was Monsieur Joseph Caillaux, and that he gave this evidence on November 25, 1910. A few months later, in March 1911, Monsieur Caillaux, who no doubt had been impressed by Rochette’s powers of oratory, advised his colleague, Monsieur Monis, of the dangers that might be incurred, politically speaking, if pressure were not brought to bear on the legal authorities for the postponement of Rochette’s trial, in accordance with the wishes of this extraordinary expert in legal obstruction. It is fair to infer, I think, that Rochette’s attitude before the Commission of Inquiry had impressed Monsieur Caillaux considerably, but Monsieur Caillaux’s political enemies ascribed his attitude to motives of another kind. Rochette’s evidence, if evidence it can be called, occupies twenty-five closely printed pages in quarto in the transcription printed for the Commission of Inquiry of the shorthand notes which were taken. One of the first points Rochette made was on the question of the money which he spent on advertising his various enterprises. He admitted that the figures quoted against him were very largely correct, that for instance, he really had spent as much as £2500 a week for ten weeks on advertising, “but,” he said, “it is only a question of proportion after all. The Bon Marché, the Louvre, or the Printemps can spend thousands on advertising where it would be criminally foolish of a small grocer to spend hundreds. I am not a small grocer. During the period from January 1 to March 23, 1908, in which my publicity bill was £24,000,1 did nearly half a million sterling of business.”

Rochette then made a vicious attack on Monsieur Prevet and the _Petit Journal_, but vicious though his attack was, it was distinctly plausible. “A shareholder of the _Petit Journal_ called on me,” he said. “He brought some very interesting figures with him. These figures showed that in 1901 the shareholders of the _Petit Journal_ got £2 dividend and the shares were worth £44 to £48. In 1902,” he said “Monsieur Prevet became director and six years afterwards, at the beginning of 1908, the shares were worth from £10 to £12 and the dividend was only sixteen shillings! This drop in value was not due to a general slump in the newspaper industry, for the _Petit Parisien_, the _Journal_, and the _Matin_, all of them halfpenny morning papers, had increased the value of their respective properties enormously.” Rochette’s visitor maintained, Rochette declared to the Commission, that if Monsieur Prevet’s management was disastrous to the _Petit Journal_ shareholders, the fact was largely due to Monsieur Prevet’s need of money, which was notorious. Rochette went, he said, into the question of the _Petit Journal’s_ next dividend. He saw, he declared, that it was problematical, and he therefore “inspired,” though he did not write, the circular which had been sent to the _Petit Journal_’s shareholders. “With regard to Monsieur Prevet’s action at this time,” says Rochette, “if he really wanted to protect the interests of his shareholders and not his own, all he had to do would have been to send out a private circular of his own to the shareholders, a list of whose names was in his possession, and convince them that my statements were wrong. He couldn’t, of course, do this, because my statements were right, and that is why he was afraid that I should take his position on the paper from him at the next general meeting. That is also why I was arrested just before that general meeting. The shares had to be deposited at the office of the _Petit Journal_ for voting purposes about March 19. Monsieur Prevet was able to convince himself that his authority with the shareholders had dwindled, and he thought it safer for himself to get rid of me.”