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Is what Zola describes in Money accurate?
L’argent by Emile Zola. 1891. (Money).
Disclaimer: I have probably made mistakes on the business terms I use in this post. I had to check them in the dictionary and it can be perilous. Moreover, there are spoilers in this billet but I’m not sure it would really ruin the suspense of the book for someone who hasn’t read it.
As I mentioned in my previous entry about Money by Zola, I was engrossed by the business details described in the book and I wanted to research a little bit the laws for banking in the Second Empire. I’ve had trouble finding sources but I eventually found information on Wikipedia and stumbled across a very useful essay.
The underlying question was: is Zola accurate in his descriptions of the financial circles at the time or when he depicts of the speculation? The answer is yes. I’m not saying that he got all the details right, I don’t have time to check that thoroughly. From what I’ve read, I think he picked details in different episodes that occurred from 1850 until the time he wrote the novel and painted an accurate overall picture.
Why a volume about banking?
I’ve read that the 1850-1860s were the years of big changes in the banking world. Most of today’s French banks were founded at the time. With the development of railroad, steel industries and other industries requiring large funds to be launched, it appeared that the circulation of money wasn’t satisfactory. Before the Second Empire, banks were run by families upon their own fortune and they were responsible of the debts of the bank on their own money. In Great-Britain, the banking system had already gone through important changes (first “modern” bank in 1834) and the business circles in Paris wanted to do the same in France. In 1863, just a year before the story of Saccard starts, the regulation for founding a Société Anonyme (a Plc) became more flexible. As long as the capital wasn’t over 25 million Francs, you didn’t need a State authorization to found the bank. With a Société Anonyme, the shareholders of the company are no longer obliged to reimburse the losses on their own fortune. It’s not a surprise that the Banque Universelle starts with 25 million francs; Saccard doesn’t need a clearance from the government, and thus from his brother, the powerful Rougon, to start his bank.
Was the Société Anonyme of the 1860s very different from today’s?
I was very interested in the information Zola gives on the articles of incorporation of the Banque Universelle. Some regulations already existed but no controls were done and the rules were breached. For example, just as today, all shares must be subscribed to complete an increase in capital; a company isn’t allowed to own their own stock, the shares must be paid at least up to 25% at the moment of the subscription. (And, I guessed, the rest of the cash needed to be paid within 4 years.) This hasn’t changed. I thought the Board of Directors had too many members for proper governance. How do you run a company with a Board of 20 people? There was already a control of the accounts, done by two auditors.
| Et il n’y avait plus qu’à élire les deux commissaires censeurs, chargés de présenter à l’assemblée un rapport sur le bilan et de contrôler ainsi les comptes fournis par les administrateurs : fonction délicate autant qu’inutile, pour laquelle Saccard avait désigné un sieur Rousseau et un sieur Lavignière, le premier complètement inféodé au second, celui-ci grand, blond, très poli, approuvant toujours, dévoré de l’envie d’entrer plus tard dans le conseil, lorsqu’on serait content de ses services. | It then only remained for them to elect the two auditors, whose duty it would be to examine and report on the balance sheets and in this way check the accounts supplied by the management—functions, at once delicate and useless, for which Saccard had designated a certain Sieur Kousseau and a Sieur Lavignière, the first completely under the influence of the second, who was a tall, fair-haired fellow with very polite manners and a disposition to approve of everything, being consumed with a desire to become a member of the board when the latter, later on, should express satisfaction with his services. |
Although the English word is auditor, it is clear in French (commissaires censeurs) that these two persons don’t have the same independence and the same right to investigate as today’s commissaires aux comptes. (also auditors). When I was reading, the structure of the 1864 Société Anonyme sounded familiar; there are more controls today and more regulations but the general framework is the same. The controls are more efficient, even if they aren’t perfect.
Saccard and the white collar crimes committed in Money.
A few weeks before reading Money, I attended a fascinating conference by a commissaire detached from the police force to the service of the AMF, the French SEC. He was presenting all the criminal offences a CFO could commit and well, Saccard made them all: bankruptcy, paper dividends, fraudulent financial statements, insider trading. He also explained how the AMF monitors stock exchanges to detect abnormal changes in stock market prices, sometimes leading to an investigation. Any time a big event is announced for a company (a merger for example), the AMF checks out the stock market price on the few days or weeks before the announcement. There is no such control in Money. The financial circles perfectly know that the stock market prices are manipulated. Big investors use the Bourse to fight personal battles and ruin companies. Investors also play for their own profit. The battle between bulls and bears at the Bourse really occurred in these years, causing havoc in the economy.
Money, the scandals at the Bourse and the collapse of the Union Générale in 1882
According to Wikipedia, the climate around banks was really the one described in Money. A Jules Mirès used the press to manipulate the opinion and attract investments on certain stock. The press was linked to the business circles in unethical ways. In Money, Saccard buys a newspaper and advertises a lot about the profits and the activity of the Banque Universelle. An Achille Fould who wasn’t on speaking terms with his brother, used his position as a minister to fight against the liberalization asked by the business circles. Saccard isn’t on speaking terms with Rougon, who is still in the government. Rougon takes the opportunity to kill Saccard when he has the chance.
The Union Générale was a Catholic bank founded in 1878 by Eugène Bontoux. It went bankrupt in 1882, it lasted four years, like the Banque Universelle in Money. The pope’s secretary was involved in the capital, it invested in North Africa and in Egypt. In Money, the Banque Universelle, a similar name to Union Générale, is close to Catholic investors. Saccard and Hamelin want the Banque Universelle to help settle the pope back in Jerusalem and meanwhile it invests in Turkey and Lebanon.
The value of the Union Générale grows until January 1882 when it collapsed. It came from an overcapitalization of the company, bad governance as the company owned their own shares and from a deadly fight between bulls and bears. Many small investors were involved through brokers and lost their fortunes. It generated a violent recession with social consequences. It’s exactly what happens in Money. Bontoux fled to Spain; Saccard immigrates to Holland. At the time, the opinion reacted strongly to this scandal because of the speculation that happened, the involvement of clergymen in the capital of the bank. It inspired Zola who had the genius to link the speculation on properties in the wake of the transformation of Paris by Haussmann to the speculation on stock markets. Saccard is the link as he is a participant in both frenzies. It shows an atmosphere of thirst for money that was, from what I read, a reality in those years.
Money and the anti-Semitism
Money was published before the Dreyfus Affair started and we all know what role Zola played in it. Zola already describes the rampant anti-Semitism of the business circles, especially in the bank industry. I was ill-at-ease when I read Saccard’s outbursts against Jewish bankers. Sadly, it appears it was accurate; Catholic bankers made a point to fight against Jewish ones. The roots for the Dreyfus Affair are there and it confirms what Proust depicts in In Search of Lost Time. It grows slowly but strongly; it shows that Vichy could happen because there were strong roots for anti-Semitism before the war.
The little research I’ve done proves that Zola is accurate in the description of the events, of the climate of that time. I found Money fascinating because it’s really the creation of modern capitalism. I have to say I’m not satisfied with this billet because I would have liked to dig a little bit more. I don’t have time for this, unfortunately. So it goes.
Zola’s take on stock exchanges
L’Argent by Emile Zola. 1891 The English translation I used for the quotes is by Vizetelly.
L’Argent was our Book Club choice for April (I know, I’m late) and we all loved it.
| Et la Bourse, grise et morne, se détachait, dans la mélancolie de la catastrophe, qui, depuis un mois, la laissait déserte, ouverte aux quatre vents du ciel, pareille à une halle qu’une disette a vidée. C’était l’épidémie fatale, périodique, dont les ravages balayent le marché tous les dix à quinze ans, les vendredis noirs, ainsi qu’on les nomme, semant le sol de décombres. Il faut des années pour que la confiance renaisse, pour que les grandes maisons de banque se reconstruisent, jusqu’au jour où, la passion du jeu ravivée peu à peu, flambant et recommençant l’aventure, amène une nouvelle crise, effondre tout, dans un nouveau désastre. | And against this cloud the Bourse stood out grey and gloomy in the melancholiness born of the catastrophe which, for a month past, had left it deserted, open to the four winds of heaven, like some market which famine has emptied. Once again had the inevitable, periodical epidemic come—the epidemic which sweeps through it every ten or fifteen years—the Black Fridays, as the speculators say, which strew the soil with ruins. Years are needed for confidence to be restored, for the great financial houses to be built up anew, and time goes slowly by until the passion for gambling, gradually reviving, flames up once more and repeats the adventure, when there comes another crisis, and the downfall of everything in a fresh disaster. |
I promise Zola wrote this and not a contemporary journalist. It’s a quote from Money, one of the last books of the Rougon-Macquart series. It was published in 1891, just before La Débâcle.
In this volume, we are in 1864 and we find Aristide Saccard again, one of the main characters of La Curée (The Kill). My post about The Kill was entitled Hunting high and low for money, pleasure or power. Well, Aristide Saccard hasn’t changed much. At the beginning of the novel, he is defeated, living rather poorly in an apartment in the hotel of the Princess D’Orviedo. She inherited a colossal fortune from her dead husband who didn’t earn it honestly. She’s expiating his faults by using his money for charities. Saccard works for one of her charity, the Institute of Work and runs it rather well. In the same hotel live a brother and a sister, M. Hamelin and Madame Caroline. They are also impoverished and try to make ends meet. Hamelin is an engineer and when he describes to Saccard all the great projects he could be starting in Asia Minor, Saccard sees an opportunity to start a new business, a bank. The three friends discuss the projects and Saccard relies on Hamelin’s ideas to promote his new company and new way of earning money.
Basically, the book relates the rise and fall of the Banque Universelle, created by Saccard with financial partners. It shows the madness of the stock exchange, the way people are corrupted by money easily earned on betting on the right stock and selling them at the right time.
The strength of the novel is the large net of secondary characters who serve one purpose: to show all kinds of unhealthy relationships with money and prove how it can turn honest people into despicable beings. All the characters in Money are involved with money at a level or another.
The main one is Saccard who appears like a megalomaniac, enjoys money for itself, for the power it gives him. He’s addicted to money. He’s full of energy, is afraid of nothing, is busy inventing scheme after scheme to reach his goal. At some point, he seems crazy. At the same time, you can’t despise him totally because he is hard working, full of enthusiasm but his ideas of grandeur are totally disproportionate. He has an appetite for life, for power and for all kinds of pleasures. Zola compared him to Napoleon: a man with lethal ideas or projects beyond imagination, someone who is a real leader, adored by people and at the same time leading his troops to death and desolation. Saccard is shown as a Napoleonic businessman. Zola describes his fall with lots of military comparisons and they enforce the image of Saccard as a Napoleon of finance.
| Les cours, de chute en chute, tombèrent à 1 500, à 1 200, à 900. Il n’y avait plus d’acheteurs, la plaine restait rase, jonchée de cadavres. | The quotations, from fall to fall, dropped to one thousand five hundred, one thousand two hundred, nine hundred francs. There were no more buyers ; none were left standing ; the ground was strewn with corpses. |
When I read the French original, I cannot help thinking about Hugo’s poem L’Expiation about the battle of Waterloo. (Waterloo ! Waterloo ! Waterloo ! morne plaine !)
Along with Saccard’s business, Zola portrays the business circles in Paris and especially the ones gravitating around the stock exchange, la Bourse. He describes the development of a new type of capitalism around banks and Sociétés Anonymes (Plc or AG). He depicts the workings of the Bourse, the behavior of investors, the optimists, the pessimists, the ones for who silence is gold. Zola shows the reader how enriched bourgeois, using impoverished nobility for their name are the new masters of the Bourse. He details rotten business practices, the manipulation of stock value and how people make money out of speculation. He always compares it to gambling.
The side characters are vivid too and Zola uses them to show how the madness of speculation, of easy money that corrupts people. It’s Dejoie, who buys stocks of the Banque Universelle to earn the 6000 francs he needs to pay for his daughter’s dowry. When the stock exchange price rises, he could sell and get his 6000 francs but he wants more. It’s the Maugendres who disowned their daughter because she married a poor writer and who’d rather play on the stock market than help her financially. It’s women who use prostitution to earn more.
Aside from the Bourse, Zola portrays the dirty market of bad debts and of devaluated stocks. Busch is our man and here is his business:
| Mais, outre l’usure et tout un commerce caché sur les bijoux et les pierres précieuses, il s’occupait particulièrement de l’achat des créances. C’était là ce qui emplissait son cabinet à en faire craquer les murs, ce qui le lançait dans Paris, aux quatre coins, flairant, guettant, avec des intelligences dans tous les mondes. Dès qu’il apprenait une faillite, il accourait, rôdait autour du syndic, finissait par acheter tout ce dont on ne pouvait rien tirer de bon immédiatement. Il surveillait les études de notaire, attendait les ouvertures de successions difficiles, assistait aux adjudications des créances désespérées. Lui-même publiait des annonces, attirait les créanciers impatients qui aimaient mieux toucher quelques sous tout de suite que de courir le risque de poursuivre leurs débiteurs. Et, de ces sources multiples, du papier arrivait, de véritables hottées, le tas sans cesse accru d’un chiffonnier de la dette : billets impayés, traités inexécutés, reconnaissances restées vaines, engagements non tenus. Puis, là-dedans, commençait le triage, le coup de fourchette dans cet arlequin gâté, ce qui demandait un flair spécial, très délicat. Dans cette mer de créanciers disparus ou insolvables, il fallait faire un choix, pour ne pas trop éparpiller son effort. En principe, il professait que toute créance, même la plus compromise, peut redevenir bonne, et il avait une série de dossiers admirablement classés, auxquels correspondait un répertoire des noms, qu’il relisait de temps à autre, pour s’entretenir la mémoire. | In addition also to usury and a secret traffic in jewels and precious stones, he particularly occupied himself with the purchase of ‘bad debts.’ This it was that filled his office with old paper to overflowing, this it was that sent him forth to the four corners of Paris, sniffing and watching, with connections in all circles of society. As soon as he heard of a failure, he hurried off, prowled around the liquidator, and ended by buying up everything which could not immediately be realised. He kept a watch on the notaries’ offices, looked out for inheritances difficult of settlement, and attended the ; sales of hopeless claims. He himself published advertisements, in this wise attracting impatient creditors who preferred to get a few coppers down rather than run the risk of prosecuting their debtors. And from all these manifold sources this chiffonnier of bad debts derived supply upon supply of paper, huge basketfuls, an ever-increasing pile of unpaid notes of hand, unfulfilled agreements, unredeemed acknowledgments !of liability, unkept engagements of every kind. Then a sorting-out became necessary, a fork had to be thrust into this mess of broken victuals, a special and very delicate scent being required in the operation. To avoid waste of effort, it was necessary to make a choice in this ocean of debtors, who were either insolvent or had disappeared. In principle, Busch asserted that every claim, even the most seemingly hopeless, may some day become valuable again ; and he had a series of portfolios, admirably classified, to which corresponded an index of names, which he read over from time to time to refresh his memory. |
A charming profession, isn’t it? This man is merciless when he tracks down old debts and the additional expenses reach incredible amounts. I haven’t checked, but I bet these professionals really existed. This questions the access to credit: these debts were a way to have credit somewhere, when we basically rely on banks for this now.
Zola tries to balance his judgment. On the one hand, even evil characters have a good side. Busch is also a very kind brother attending to his ill relative like a mother hen. Saccard was perfectly honest when he ran the Institute of Work. On the other hand, the generous characters aren’t as good as it seems. The Princess d’Orviedo gives her fortune away but the useless luxury she puts in her charities is to be criticized too. She gives her money away more for herself, because this money is dirty, than to really improve the beneficiaries’ life. She could do more if the investments were more efficient.
Madame Caroline is the only character who seems to keep her moral compass but she is also momentarily blinded by Saccard. He’s hard to resist. She’s seduced but can keep to her promises when she has decided something. She’s the only one who’s interested in life for itself and who has a healthy relationship with money. She enjoys it when she has some but wouldn’t give up her principles for more. If her income decreases, she adjusts her way of living.
Lots of elements in this novel were depressing because things haven’t changed that much since Zola. The behaviours he describes still exist. Crashes like Enron look a lot like the crash of the Banque Universelle and their outcome is alike with major consequences for shareholders and the whole market. Small people lose their fortune, but aren’t they responsible for stupidly believing that making so much money without doing anything was sustainable? If Money rings true, it’s because the foundation of all this is greed. The alternative is represented in the book by Busch’s brother Sigismond. He’s a thinker and an idealist who dreams of a Marxist society. Zola depicts him as a idealist. The society he dreams of cannot be implemented because it is based on the absence of greed and greed is part of the human nature. It’s doomed to failure.
Money also prepares the reader to La Débâcle. The political events mentioned here and there remind the reader that a war is in the air. The crash at the Bourse (a real one occurred in 1867, probably resulting in the new Corporate Law of July 24th, 1867) is described as a battle field and prefigures the agony of the regime.
Money is an excellent novel. I was really interested in the business and legal elements it includes and will come back to them in another entry. Highly recommended.
Discover Guy’s excellent take on this novel here.
Hunting high and low for money, pleasure or power
La Curée by Emile Zola 1872 English title: The Kill
La Curée is our Book Club’s choice for March. It is the second volume of the Rougon Macquart cycle. Zola’s aim was to draw the ups and downs of a French extended family during the Second Empire. (1852-1870). In this volume, Eugène Rougon is a rising politician when his brother Aristide moves to Paris to become rich. Eugène manages to have him hired at the Hôtel de Ville, which means he’s a civil servant for the city of Paris. Aristide starts a new life then and changes his surname for Saccard.
Eugène and Aristide also have a sister, Sidonie, a spinster who runs an apparently honest shop, as a façade for her more shady business; she lives upon discreet services to rich persons who confide in her and rely on her for some of their dirty dealings. Knowing many secrets, she manages to marry Aristide to Renée, the pregnant daughter of a respectable and rich bourgeois. Aristide has been on the lookout for a juicy opportunity to launch a business. When he marries Renée, he has just discovered he could make a fortune on speculating on the houses and lands the Hôtel de Ville will have to buy out to current owners to change Paris according to the Baron Haussmann’s plans.
It works. Saccard is now awfully rich and lives as a parvenu. René, who had a miscarriage, launches herself into a life of pleasure made of soirees, gowns, jewelry and lovers. She befriends with Maxime, Saccard’s son from his first marriage. They are close comrades, sharing their love lives, hanging out together like too young men and they have no secrets for each other. One night, they have sex, putting an end to their friendship. And while Maxime sees it as an agreeable fling, Renée is more and more involved emotionally.
The title of the book, La Curée, refers to the moment when dogs kill the animal they are hunting. The hunt is the underlying theme of the novel.
The hunt is in Saccard chasing money, cornering people to have them into his schemes. He noses out Paris when he arrives, in an attempt to smell a source of wealth. He is on the watch for any opportunity at the Hôtel de Ville, hidden, waiting for the right moment to catch hold of his chance for wealth. Nothing can stop him once he has smelled money. He’s alternatively the hunter and the fox. He hunts down people when he needs them; his creditors can hunt him down any time his risky financial schemes fail. The master of the hunt is Eugène, who holds the whistle and can socially kill Saccard at the first faux pas or whenever he wants to end the game.
The hunt is in Renée, relentlessly pursuing pleasure. She too has two roles, the hunter and the bait. Maxime is her prey, she doesn’t hesitate to corner him. Saccard uses her as bait in his hunt for money. He takes advantage of her stunning beauty and of her social skills to attract people in his salons and push forward his business deals. Renée is a great character, abandoning herself to her senses, surrendering to her carnal desires, behaving on instinct.
The hunt is in Madame Sidonie, chasing after comprising information and useful secrets. Confidences are her weapon; she can be unleashed on someone on demand.
The hunt is also in the society. It’s the portrait of a time when the politicians, the nouveaux riches are sent like hounds on the old Paris, tearing it down, putting it to pieces, selling it to the wolves. It’s a strong criticism of the Second Empire. I’m not saying that Zola is inaccurate but the reader must remember that he was a fierce republican; that he wrote under another regime which loathed the previous one. I was interested in Saccard’s shady dealings, the mechanism used to increase the values of the properties bought back by the city to cut what we now know as the Grands Boulevards. I also thought about Les Liaisons Dangereuses. All this sex, this debauchery, the alliance between Maxime and Renée, like Valmont and the Marquise de Merteuil. It has a whiff of decadence and all oozes vulgarity, which can be heard in the protagonists’ name, Saccard. In French, the suffix “ard” (pronounce “ar”) is negative, underlying vulgarity.
I’d forgotten how descriptive Zola’s prose is and I thought it lacked dialogues sometimes. He talks to all our senses, describing the lights, the scents, the air, the fabrics, the sounds. I saw languid paintings by Manet or Ingres. The vivid descriptions of the atmosphere match with the characters’ feelings, especially Renée’s. The episode of the promenade in the Bois de Boulogne is a masterpiece. Renée is the only one who really questions her life, touches its limits. She suffers from ennui, knows her life is shallow. She’s a remarkable feminine character, as fascinating as Nana, far more interesting than Madame Bovary. If you still hesitate about reading La Curée, I recommend that you read Guy’s excellent review here. Like him, I wonder why this heroin isn’t more famous; she has everything to be a great literary character. Is it because the sex is rather explicit? Did that prevent to book from reaching high school classes?
Book Around the Corner 