who had begun his career five years before with a capital of £2000 was
the principal mover in the immense agitation against the acquisition
by the State of the Western Railway of France. That he moved in this
matter on purely personal grounds is of far less importance than the
fact that if he had succeeded in overthrowing Senator Prevet the French
nation would undoubtedly have been spared a very heavy money loss,
for the acquisition by the State of the Western Railway has been a
disastrous undertaking from a money point of view, and has cost and
will continue to cost French taxpayers a large sum of money every year
till the railway begins, if it ever does begin, to pay. Rochette’s
attacks on Monsieur Prevet, and his obvious intentions on the _Petit
Journal_ created a storm of antagonism against him in the French Press.
In spite of the persistent and unfailing confidence of his shareholders
public opinion began to make itself felt, and as always happens in
France when public opinion is roused, a great deal of mud began to
be flung and accusations of corruption became very frequent and were
directed against the highest in the land. The Government was hotly
accused of laxity, and Monsieur Georges Clemenceau, who was Prime
Minister in 1908, was accused of moral complicity with the financier
Rochette. It is a curious proof of the poetical justice, which comes
to its own even in financial questions, that these accusations against
Monsieur Clemenceau did more to cause the eventual downfall of Rochette
than anything which had happened before. They made “the tiger” angry,
and when Monsieur Clemenceau grew angry with Rochette, the day of
Rochette’s wane had dawned. Accusations were launched against the high
magistrates, who were accused of weakness and of being afraid to take
action. Members of Parliament were directly accused in the public
Press of protecting Rochette and his enterprises, and of taking money
for so doing. No day passed without the launching of an accusation
against some member of the Chamber or the Senate of having accepted
heavy bribes to cover Monsieur Rochette, or to back him up, and the
names of numbers of well-known men who are now more or less indirectly
connected with the Caillaux drama were constantly mentioned at the time
in connexion with Rochette, the financier.
The connexion between the two cases, the case of Rochette and the
Caillaux drama which followed the attack in the _Figaro_ on Monsieur
Caillaux’s conduct in connexion with it, is curiously close. There have
been two Parliamentary inquiries into the Rochette affair. In the
first one in 1911, among the members of the Parliamentary Commission
we find the names of Monsieur Caillaux himself (he very nearly, in
fact, was the president) and of Monsieur Ceccaldi, who was approached
by Monsieur Caillaux on the afternoon of the crime, and to whom the
Minister of Finance confided his uneasiness with regard to his wife. In
the list of the second Commission Monsieur Ceccaldi’s name and others
closely connected with the Caillaux drama appear once more. But there
was no question, yet, in 1908, of a Rochette inquiry, for the _affaire
Rochette_ was only just beginning. Monsieur Clemenceau fired the first
shot, as Monsieur Clemenceau was bound to do. There had been talk on
the Bourse, there had been talk in the newspapers, Monsieur Clemenceau
had been accused of slackness, and he had made up his mind that he
would not justify the accusation.
On Friday (it is quite a curious coincidence that so many important
dates of the Caillaux, Agadir, and Rochette affairs should have fallen
on a Friday)—on Friday, March 20, 1908, at exactly twenty minutes to
twelve in the forenoon, Monsieur Clemenceau, the Prime Minister, sent
for Monsieur Lépine, who was then Prefect of Police, and ordered him
to take measures for a judicial inquiry into Rochette’s financial
transactions. Monsieur Lépine spent exactly a quarter of an hour
with Monsieur Clemenceau in his room at the Home Office in the Place
Beauvau, and at five minutes to twelve he returned to the Police
Prefecture, sent for Monsieur Mouquin, the head of the Research
Department of the Paris police, and for Monsieur Yves Durand, his chef
de Cabinet, and told them what Monsieur Clemenceau had said to him.
Now the French have a way of their own of conducting these matters.
The State does not prosecute for fraud. Monsieur Lépine’s orders were
to find a plaintiff who would bring a charge against Rochette, who
would show proof that Rochette had damaged his pocket, and who would be
willing to pay the caution which the French courts require from such a
plaintiff before legal action begins. Monsieur Yves Durand was ordered
by Monsieur Lépine to go out and find such a plaintiff. Monsieur
Lépine, in his examination by the Parliamentary Commission on July 26,
1911, was very explicit with regard to his own opinion and the opinions
he had heard expressed on Rochette’s financial undertakings. He alluded
to them as “a house of cards built on puffs of hot air, kept afloat by
public credulity and bound to fall to pieces at the first breath of
suspicion.”
Monsieur Lépine had urged the judicial authorities to take action in
the Rochette case long before action was taken, and he alluded with
some bitterness to the difficulty in getting a serious charge brought
against any financier suspected of fraud who was rich enough to make it
worth the while of his creditors to withdraw such charges. There had
been several charges made against Rochette, and they had all fallen
through because the plaintiffs got their money or got money enough to
induce them to withdraw.
When, therefore, Monsieur Lépine told Monsieur Yves Durand, his chef de
Cabinet, that he must go out and find him a plaintiff, he added that he
himself knew of nobody who was likely to assume the rôle. The French
law gives no greater claim on the assets in such a case to the man who
goes to the expense of prosecuting than it affords to all the other
creditors, and as he has to put up funds for the prosecution, it is
often, as Monsieur Lépine explained, more than difficult to find a
victim ready to fleece himself after he has been fleeced. But Monsieur
Yves Durand happened to have heard that Monsieur Prevet was a likely
man to undertake the prosecution, and he called on him immediately.
He went first to his private house, failed to find him there, and
found him eventually at his office in the _Petit Journal_ building in
the Rue Lafayette. Monsieur Prevet told Monsieur Yves Durand that a
banker named Gaudrion was perfectly ready to prosecute Rochette, and
that he had mentioned his willingness to him. Monsieur Yves Durand and
Monsieur Prevet drove together immediately to the Rue de la Chaussée
d’Antin, where Monsieur Gaudrion had his office. They found Monsieur
Gaudrion there and he told them that although he was not ready to
prosecute Rochette himself, a friend of his, Monsieur Pichereau,
whom he described as a man of property living at Corbeil, was ready
to prosecute and would do so. Monsieur Pichereau, Monsieur Gaudrion
declared, had put £6000 into some of Rochette’s financial enterprises,
the Nerva Mines and Hella Gas Mantle Co. among others, had lost a good
deal of his money, and was ready to do everything possible to get some
of it back again.
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.