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Title: On Trade Author: Charles Fourier Date: 1821 Language: en Topics: trade, utopian socialism Source: https://www.marxists.org/reference/archive/fourier/works/ch28.htm
We now touch on civilisation’s most sensitive spot; it is an unpleasant
task to raise one’s voice against the folly of the day, against chimeras
that are downright epidemical.
To speak against the absurdities of trade today means to expose oneself
to anathemas just as much as if one had spoken against the tyranny of
the popes and the barons in the twelfth century. If it were a matter of
choosing between two dangerous roles, I think it would be less dangerous
to offend a sovereign with bitter truths than to offend the mercantile
spirit which now rules as a despot over civilisation and even over
sovereigns.
And yet a superficial analysis will prove that our commercial systems
debase and disorganise civilisation, and that in trade as in all other
things we are going astray more and more under the guidance of the
inexact sciences.
The controversy on trade is hardly half a century old and has already
produced thousands of volumes; and yet its originators have not seen
that the trade mechanism is organised in such a way that it is a slap in
the face for all common sense. It has subordinated the whole of society
to one class of parasitical and unproductive people, the merchants. All
the essential classes of society — the proprietor, the farmer, the
manufacturer, and even the government — find themselves dominated by an
inessential, accessory class, the merchant, who should be their
subordinate, their employed agent, removable and accountable, and who,
nevertheless, directs and obstructs at will all the mainsprings of
circulation.
In respect of errors other than those of trade, public opinion and the
learned bodies are, indeed, more tractable; it is pretty well agreed
that the philosophical systems are dangerous illusions, that experience
belies our boasting of perfection, that our theories of freedom do not
square with civilisation, that our virtues are social comedies and our
legislations labyrinths; there are even jokes about a fashionable
controversy, ideology. But tongue-wagging about commerce, with its
theories of imports and exports, counterbalance, balance, and guarantee,
has become the Ark of the Covenant before which everything bows down.
This, then, is the illusion which we have to dispel.
First of all we must show that our trade systems, which are now gaped at
with stupid veneration, are the antipodes of truth, of justice, and
therefore also of unity.
It is difficult to make clear to a century that precisely that operation
which it considers to he the masterpiece of all wisdom is nothing but
the seal of ignorance stamped on its entire policy. Let us but look at
the already known results: maritime monopoly, fiscal monopoly, growing
national debts, bankruptcies in unbroken succession resulting from paper
money, increasing villainy in all business relations. Already now we can
stigmatise the mechanism of free trade, i.e., of free lying, that
veritable industrial anarchy, that monstrous power in society.
How is it that the most lying class in the social body is most protected
by the ‘apostles of truth’? How does it happen that today learned men
who preach contempt of vile wealth praise only the class which pursues
wealth per fas et nefas [by legal or illegal means], the class of stock
exchange gamblers and corner-men? Formerly the philosophers were
unanimous in censuring certain corporations which defended with
flexibility of conscience the proposition that there is a difference
between taking and Stealing. How then have the same philosophers now
become the apologists of a class which affirms, with still greater
immorality, that haggling is not lying, that to dupe the buyer is not
the same as robbing him, that stockjobbing and cornering are by no means
plundering the productive class ‘ in brief, that one must work only for
money, not for fame; — for that is the refrain which the merchants sing
in chorus: We don’t pursue business pour la gloire! Is it then to be
wondered at that the modern sciences went astray when they espoused the
cause of those who openly profess such principles?”
Trade takes various forms according to the various social stages; for as
it is the pivot of all social life, it exists as soon as there is any
social condition in general. A people becomes social, forms a society,
from the moment when it begins to carry out exchange. For this reason
trade exists already among the savages, where it takes the form of
direct barter. Under patriarchy it becomes indirect commerce; in
barbarism the basis of the commercial method is formed by the
monopolies, the fixing of maximums and prices and forcible government
requisitions, and in civilisation by individual competition or lying and
bewildering struggles.
There is no need for us to dwell on direct barter among the sa ages who
have no knowledge of money. One man is lucky at the hunt and exchanges a
piece of game for arrows made by another, who has not been hunting and
needs eatables. This method is not even trade, it is barter.
The second method, indirect commerce, is “primitive trade.” It is
carried on through a go-between, who becomes the owner of something
which he did not produce and he does not intend to consume. This method,
although it is bad and leaves room for arbitrariness, is nevertheless
highly advantageous in the following three cases:
1) in young countries, where only agriculture exists without industry;
this is the state in which all colonies find themselves at the
beginning;
2) in harsh lands, as in Siberia and the African deserts; a merchant who
defies heat and cold to carry objects of necessity to distant parts is a
very useful man;
3) in oppressed and constricted lands, where the, Bedouin plunder
caravans, exact ransom from merchants and often murder them — every kind
of protection is due to him who braves these dangers in order to bring
supplies to a distant land. When such a merchant becomes rich he
certainly deserves it.
In these three cases the merchants are neither Stock Exchange gamblers
nor corner-men; they do not hawk, one speculator to another, the objects
intended for consumption. On their arrival they offer them openly to the
consumer in a bazaar or public market; they are the accelerators of
industrial movement. They want to earn — nothing is more reasonable in
the civilised world: he who has sown deserves to harvest. But it is very
rare that the merchants content themselves with this function of theirs;
singly or in alliance they scheme to obstruct the circulation of
commodities in order to make prices immediately soar.
Trade becomes pernicious from the moment the go-betweens, due to their
excessive number, become parasites [on the social body] and are ready to
conceal goods, to let them rise in price under the pretext of an
artificially produced scarcity, in brief, to rob simultaneously the
producer and the consumer through speculation tricks instead of serving
both as simple, open go-betweens. We still see this openness at our
small markets in villages and towns. The man who buys a hundred calves
or sheep is a useful intermediary for twenty peasants, who would
otherwise lose whole working days to bring them to market in town. When,
on arriving at the market, he publicly offers his animals for sale, he
thereby renders a service also to the consumers; but when by means of
heaven knows what tricks he agrees with other ‘friends of trade‘ to hide
three-quarters of the sheep, to tell the butchers that sheep are scarce,
that he can only supply a few friends, to sell them half as dear again
under this pretext, to alarm the buyers, and then to bring the hidden
sheep out one after the other, to sell them at inflated prices in the
atmosphere of alarm previously created and thus to extort a high ransom
from the consumers — then this is no longer simple commerce, open
offering of commodities free from any intrigue, it is compound commerce,
whose endlessly changing tricks give birth to the thirty-six typical
vices of our trade system and are tantamount to a legal monopoly. When
one lays hands on the total product by ruse in order to make it dearer,
that is robbing more by means of intrigues than the monopoly does by
armed force.
I shall not dwell any longer on the method of the barbarians. It
comprises fixing of maximums, forcible requisitions and monopolies,
which are still quite customary also in the civilised state. As I have
already said elsewhere [Charles Fourier, Théorie de l’unité universelle,
t. 2.-‘Prolégomène‘] the various methods of individual periods overlap;
one must not wonder, therefore, that civilisation borrows individual
features from both higher and lower stages. Our civilised trade
mechanism is thus an amalgamation of the characters of all periods, with
those of the civilised stage, however, predominating — and these are
much more despicable still than those of barbarism, because our trade is
nothing but organised and legitimised robbery under the mask of
legality. As a result, the racketeers and intermediaries can unite to
cause artificial dearth of any foodstuffs and thus plunder both
producers and consumers to heap up in a hurry scandalous fortunes of
fifty millions, whose owners nevertheless complain that there is no
protection of trade, that the merchants cannot subsist, that nothing is
done, and that the state is being ruined if the merchant is reduced to
the inability to make more than fifty millions!
Meanwhile we are taught by a [new] science that these people should be
granted complete freedom. Let the merchants do their job, we are told;
without this freedom the corner-man, who even so has earned only fifty
million, would perhaps not even have made a single million, and his
respectable family would have to manage on fifty thousand francs revenue
—
Dii, talem avertite casum,
[Ye gods, ward off such an occurrence!,
paraphrase from Virgil’s poem Aeneid, Book III]
... Contempt of commerce, a contempt inborn in all peoples, was
prevalent in all nations considered to be honourable except for a few
coastal clans of hucksters who derived benefit from commercial
extortions and villainies. Athens, Tyre and Carthage, which profited by
commerce, could not mock at it; everybody refrains from mocking at the
ways in which he has enriched himself, and the financier least of all
will mock at the art of adding ciphers to bills, or allowing the enemy
to take away the ledgers and putting the cash in safety while reporting
it also as having been taken by the enemy.
In reality with ancient as well as with modern peoples commerce has
always been an object of mockery on the part of all honourable classes.
How can one have any esteem for an out-and-out rascally profession or a
class of people who lie with every word they say and by means of this
magic art cam millions while the honest landowner who cultivates his
piece of land with great effort and exertion, using the best of his
experience, barely achieves an insignificant increase in its yield?
Meanwhile, for a century a new science called Economics has been
exalting hucksters, stockjobbers, corner-men, usurers, bankrupts,
monopolisers and commercial parasites to the peak of honours: the
governments, daily deeper and deeper in debt, always intent on finding
means of borrowing money, have found themselves forced to conceal their
contempt and to spare this class of mercantile bk>od-suckers which keeps
the money-coffers locked to civilisation and pumps out all the treasures
of agricultural and industrial diligence under the pretext of serving
it. It is not denied that trade ensures transportation, victualling, and
distribution, but it does so like a servant who performs service
actually worth a thousand francs annually and on the other hand robs his
master of ten thousand francs, or ten times as much as he produces.
As a young spendthrift secretly despises the Jew to whom he goes every
week to get himself fleeced, but still always greets him very politely,
so also the modern governments have, with obvious contempt, concluded an
armistice with trade, which is doing all the better for the fact that it
knows how to have itself lumped together with the very manufacturers
whom it plunders. The economists, who have found in this merchants’
hotchpotch a nursery of new dogmas, a mine of systems, have overthrown
morality with all its high-sounding talk of truth in order to enthrone
their favourites, the stockjobbers and bankrupts. Thereupon all the
scholars rivalled in self-abasement; in the beginning science admitted
those ‘friends of trade’ as its equals — Voltaire dedicated a tragedy to
an English merchant. [Voltaire, Zaire] Today these stockjobbers would
have a good laugh if a scholar presumed to dedicate a tragedy to them!
Stockjobbing has discarded the mask, it no longer needs the incense of
the scholars; it wants secret — and soon legal — participation in
government! And indeed we have seen the Aachen Congress unable to decide
anything until two bankers arrived.
Despite the fact that the economic systems have exalted the Golden Calf
of trade, they have been unable to put an end to the natural contempt
which the nations feel towards it. It remains despised by the nobility,
the clergy, the propertied classes, the officials, the lawyers, the
scholars, despised by artists, soldiers, and every class worthy of
respect. In vain has trade heaped sophism on sophism to prove to them
that the stockjobbing blood-sucker should he respected — a natural
disdain for this class of upstarts still prevails. Everybody yields to
the upswing of a dogma favoured by fortune, but everybody continues in
secret to despise the mercantile hydra, which takes no notice of this
and pursues the course of its conquests.
How is it that our century has made public the crimes of so many
classes, even those of the Federates, who only existed for a month in
1815, whence comes it that it has never occurred to this century, which
has spared neither kings nor popes in its collections on crimes, to make
public the crimes of the merchants? Yet writers are unanimous in
complaining that they suffer from a lack of material. To show them how
fruitful this material is, I shall make a methodical analysis of only a
single one of the (thirty-six) crimes of civilised trade. These
thirty-six reprehensible features of our trade under the domination of
individual competition and of bewildering and lying struggle are the
following:
Pivotal points: Intermediate ownership and the dismemberment of
agriculture.
1) The two-sidedness of trade.
2) Arbitrary determination of value.
3) Freedom of fraudulence.
4) Insolidarity, [lack of mutual liability].
5) Theft, removal of capital.
6) Decrease in wages.
7) Artificial obstruction of supply sources.
8) Oppressive surpluses.
9) Perverse interferences.
10) Destructive policy.
11) Torpidness or general lack of credit (recoil, repercussion).
12) Fictitious money.
13) Financial confusion.
14) Epidemical crime.
15) Obscurantism.
16) Parisitism.
17) Cornering (accaparement).
18) Stockjobbing.
19) Usury.
20) Unfruitful work.
21) Industrial lotteries (speculation on risk).
22) Indirect corporative monopoly.
23) Fiscal monopoly, state administration enforced by falsification.
24) The exotic, or colonial monopoly.
25) Maritime monopoly.
26) Feudal, caste monopoly.
27) Baseless provocation.
28) Loss.
29) Falsification.
30) Ruin of health.
31) Bankruptcy.
32) Smuggling.
33) Piracy.
34) Fixing of maximums and requisitions.
35) Speculative slavery.
36) Universal egoism.”
Of these thirty-six features we shall consider in detail only one,
bankruptcy; before that I shall say a few words about some others.
(Proved by three features of the Table, Nos. 7, 8 and 12: artificial
obstruction of supply sources, oppressive surpluses and fictitious
money)
Our century, which has been so prolific of theories about the movement
of industry, still cannot distinguish circulation from obstruction. It
confuses circulation interrupted in places with that which is
uninterrupted, simple circulation with compound. However, let us leave
these dull distinctions; the facts may speak and serve us as a basis for
principles which are directly opposed to those of economics.
Both governments and peoples agree that forgers, both of money and of
public securities, should he punished with death. Those who counterfeit
coins and bank-notes are indeed condemned to death. A very wise
precautionary measure. But why does trade enjoy the right to forge money
when this practice brings other people to the gallows?
Every bill of exchange made out by a merchant bears the seed of
counterfeit, for it is extremely uncertain whether it will ever be paid.
Everyone who steers a course towards bankruptcy floods circulation with
his bills of exchange without intending ever to pay them. In this way he
in fact makes and spreads counterfeit money.
Will it be objected that everyone else enjoys the same privilege, that a
property-owner, like a merchant, can put bills of exchange into
circulation?
That is not true. A property-owner cannot do that. A right is illusory
when it cannot be exercised. Witness the constitutional right of the
people to sovereignty, a pompous prerogative in spite of which the
plebeian cannot even get his midday meal if he has not a sou in his
pocket. And yet how far from the pretension to sovereignty is the claim
to a midday meal. Many rights exist thus on paper, but not in reality,
and their granting is an insult to him who cannot even ensure himself
rights a hundred times less important.
So it is with the property-owner as regards the issuing of bills of
exchange. He has the right to issue them as the plebeian has the right
to claim sovereignty; but to possess the right and to exercise it are
two very different things. When the property-owner makes out a bill of
exchange he win not find anybody who will accept it without a guarantee,
and he will be treated as one who forges money. He will be required to
hypothecate a completely debt-free immovable property and to pay a
usurious rate of interest into. the bargain. His bills of exchange would
be accepted at this price, and with such a security they would be money
with real value, not fictitious money like those of a second-hand dealer
who, by virtue of his title as a ‘friend of trade, finds means of
putting into circulation [good] bills to the value of a million when he
does not possess even the hundredth part of that sum, even 10,000 francs
as guarantee for that million.
How beautifully those governments let themselves be cheated who deprive
themselves of this ability and guarantee it for the merchant! A merchant
who has ten thousand francs security issues bills of exchange to the
amount of a minion when he pleases; he is protected and authorised to do
so; he has the right to set this mass of paper in circulation without
the law being entitled to investigate how he places his capital and what
securities he has. The Treasury, offering a guarantee of say ten
million, would have to he able, according to this ratio, to issue
securities up to a thousand million. But if a government tries to do so
without consulting public opinion, without informing it of the move, it
will see its credit ruined and its country exposed to political
disturbances; and yet it is only doing the same, only availing, itself
of the same privilege which is enjoyed by so many schemers, who often
cannot offer the hundredth part of these guarantees and cannot run their
business.
It will be answered that these schemers know how to talk over the
foolish and insinuate themselves into their confidence; it is therefore
set up as a principle of commerce that the art of duping and plundering
good-natured, credulous people deserves to be protected in every way and
that this protection must be limited to the merchant and not be enjoyed
by the government. I do not maintain that this fine art should he
allowed to both, but on the contrary that it should he denied both to
rulers and to merchants.
From this it follows that the merchant enjoys the ability to issue
fictitious money in the form of bills of exchange (twelfth feature) — a
crime which is equivalent to forging money, for which the other
categories of rascals are sent to the gallows — and that the trade
system of civilised people legalises and protects competition of
fraudulence (third feature).
The accusation of forging money, like the other points of the
accusation, will be answered as follows: there must he merchants in
order to ensure circulation, and business would become impossible if
these agents were placed under restraint; the state would disrupt the
public credit and place the whole of its industry in jeopardy.
It is true enough that a quality of trade is that it forges our fetters
still tighter whenever the social body shows any signs of resistance. As
soon as any administrative measure hampers the machinations of trade,
trade restricts credit and paralyses circulation, while the state, which
wanted to eliminate an old disorder, in the end adds new ones. This
effect is called repercussion (eleventh feature) in the Table.
This danger is used as the basis for establishing the principle: Let the
merchants do their job, their complete freedom is the guarantee of
circulation. An exceedingly false principle, for it is precisely this
complete freedom which gives rise to all the tricks that are so
obstructive to circulation: stockjobbing, cornering, bankruptcy, and so
on, the consequences of which are the two features:
7. Artificial obstruction of supply sources.
8. Oppressive surpluses.
Let us see what influence these two features have on circulation.”
Trade does not content itself with delivering commodities from the
producer to the consumer, “it schemes by means of cornering and
stockjobbing speculation to produce an artificial dearth of those food
articles which are not exactly plentiful. In 1807 a stockjobbing
manoeuvre suddenly raised the price of sugar to five francs in the month
of May, and the same sugar dropped to two francs in July, although not
the slightest new supplies had arrived. But the stockjobbing had been
countered by means of false information and thus the sugar had been
brought down to its value; the scheming and artificially aroused fears
that there would he no supply had been disposed of. These schemes and
artificial fears play their tricks every day with some food article and
make it scarce without a real scarcity existing. In 1812, when the
harvest was assured and the corner-men were disappointed in their hopes,
enormous quantities of grain and flour were suddenly seen coming from
their warehouses. So there had been no shortage at all and absolutely no
danger of famine, if only these foodstuffs had been distributed
rationally.” But trade has the peculiarity that even before there is a
danger, with an eye to its possibility, it diverts supplies, stops
circulation, arouses panicky fears, produces artificial food shortage.
The same effect is produced in times of surplus, when trade obstructs
supplies out of affected fear of profusion. In the former case it
operates positively, by buying up foodstuffs in anticipation; in the
latter case negatively, by not buying and thus causing prices to drop so
low that the peasant does not even get his production costs refunded.
Hence arises the eighth feature, oppressive surpluses.
Trade will retort that it does not need to buy when it foresees no
profit, and that it will not he so insane as to overload itself with
grain which offers no probability at all of a surcharge, while it,
trade, can invest its capital far more usefully in such commodities as
hold out profit for it because of their scarcity, which can easily he
increased by cornering.
There you have convenient and pleasant principles in a social system in
which people talk about nothing but mutual guarantees. Trade is
therefore exempted whenever it pleases from serving the social body. It
acts like an army which would be authorised to refuse to fight whenever
danger were present, and to do service only in its own interest, without
any consideration for the state interest. Such is our mercantile policy,
so one-sidedly does it determine all obligations.
In 1820 the price of grain dropped below three francs in various
provinces in which a price of four francs hardly covered the costs. This
would not have occurred had French trade bought in advance six months’
food supplies for thirty million persons,” as it would have had to do
under a system of mutuality adapting itself to the interests of both
parties. a “This reserve stock, withdrawn from circulation and locked up
in granaries, would have kept up the price of the rest, and the peasant
would not have suffered from the depreciation and the impossibility to
market his products. But our trade system works exactly in the Opposite
direction: it aggravates the pressure b of surplus and the evils of
famine and thus has a destructive effect on both side’.
I have chosen the eighth feature, oppressive surplus, to show that the
existing mode of trade has both negative and positive defects, and that
it often sins by non-intervention, by omitting a service which it could
easily render. For when in a time of famine the sum of five hundred
million is required to buy up the corn, it is immediately available; but
if this sum is needed for precautionary measures to increase stocks in
times of surplus, not even five hundred talers c can he scraped
together. There is neither mutuality nor guarantee in the contract
concluded between the social body and the commercial body. The latter
serves only its own interest, not that of society, and hence the
abundant capital which it uses is a robbery perpetrated against industry
as a whole. In the Table I have listed this robbery as the fifth
feature: ‘Removal of capital.”
Thus, on both sides of trade there is not the slightest sense of
obligation towards the social body, which surrenders itself, bound hand
and foot, to the. Minotaur, to whom it guarantees despotic power over
capitals and foodstuffs.” Yes, indeed, despotic power! “After so many
declamations against despotism we still have not discovered the real
one, which is no other than the despotism of trade, that real satrap of
the civilised world!
To sum up, it follows from this that the civilised mechanism guarantees
the merchants complete impunity for the crime of forging money, for
which other classes are punished with death — and that this impunity is
based on the pretence of help which they allegedly render to circulation
but in reality refuse — positively by artificial obstruction of supply
sources and negatively by oppressive profusion.
To this falsity in the results must be added the lack of any principles.
The economists admit that their science has absolutely no fixed
principles; and it is indeed the height of unprincipledness to grant
complete freedom to a class of so exceedingly depraved agents as the
merchants.
The consequence of all this is that the commercial movement proceeds by
fits and starts, in spasms, surprises and excesses of all descriptions,
as can be seen every day in the present trade mechanism, which can
achieve only a periodically interrupted circulation, without regular
graduation, without balance and guarantees.
An amusing result of this disorder is that people have the courage to
reproach the government with financial abuses which they never dare to
reproach trade with. Witness the two bankruptcies — that of Law’s
bank-notes and that of the assignats. These were gradual bankruptcies,
they were seen approaching from afar; with a timely partial sacrifice
they could have been guarded against. Despite these extenuating
circumstances the public gave no quarter. It rightly declared Law’s
notes and the assignats to be forgery, armed plunder.
Why then does the same public good-naturedly tolerate the issue of
counterfeit money by the merchants when it does not allow it for
governments, even when these are cautious enough to prepare for the
bankruptcy by a slow depreciation which affords the holders of the
papers the possibility to evade it? This possibility does not exist for
the holders of the securities issued by trade. Bankruptcy strikes them
like a thunderclap. Many a man goes to sleep tonight in possession of
300,000 francs and wakes up tomorrow with no more than 100,000 as a
result of a bankruptcy. The National Convention copied this manoeuvre in
the operation of the Consolidated Third; people did not tire of
reproaching it with this as a fully established robbery. And yet every
merchant is allowed the right to commit still more vexatious robberies
and to steal by bankruptcy two-thirds of what he received, whereas the
Convention withheld two-thirds of sums it had never received. How
outrageous the crimes of trade become when compared with other, and even
the biggest, political infamies!’
The following details will demonstrate that modern politics, by handing
over trade to completely free merchants exempt from any kind of
obligation, has set the wolf among the fold and provoked robberies of
all kinds.
Let us now go on to bankruptcy to describe it in somewhat greater
detail.
When a crime becomes very frequent, one gets accustomed to it and
witnesses it with indifference. In Italy or Spain people remain quite
cool at the sight of a hired assassin stabbing his designated victim and
taking refuge in a church, where he enjoys immunity. In Italy one sees
fathers mutilate and murder their children to improve their voice, while
the servants of ‘the God of peace’ encourage them to perpetrate these
brutalities so as to obtain good singers for their choirs. Such
abominations would arouse the indignation of all other civilised nations
if they occurred amongst them,” but on the other hand they “have other
outrageous customs which would make the Italians’ blood boil.
If the customs and opinions within civilisation differ so much from
nation to nation, how much more must they differ from one social epoch
to another; how hateful would the vices which are tolerated in
civilisation seem in less imperfect social stages!One can hardly believe
that countries which call themselves ‘well ordered can tolerate for a
moment such abominations as bankruptcy. ...
Bankruptcy is the most ingenious and shameless villainy that has ever
existed; it guarantees every merchant the ability to rob the public of a
sum proportionate to his fortune or his credit, so that a rich man can
say: ‘I set up as a tradesman in 1808; on such and such a day in the
year 1810 I will steal so and so many minions, whoever they may belong
to.’
Let us leave aside a present development, the new French code and its
intention to punish bankruptcy. There is no unanimity in respect of the
success of this intention and means of evading the new laws are already
being suggested. Therefore we shall first let practice decide and
meanwhile base our arguments on already known facts; consider the
disorders which result from the philosophical system and the principle:
Leave the merchants complete freedom, without demanding any guarantee of
the cleverness, the honesty or the solvency of each individual.
From these arises, alongside other abuses, bankruptcy, a still more
heinous robbery than highway robbery. However, people have become
accustomed to it and put up with it so well that they even recognise
honest bankruptcies — those in which the speculator steals only half.
Let us go on to a detailed description of this kind of heroism, which
was little known in antiquity. Since then it has experienced a brilliant
upswing. It presents analysts with a series of developments which
testify to our progress towards perfectibility.
Series in Three Orders, Nine Genera, and Thirty-Six Species
“Right or ascending wing. Light hues.
I. The Innocent.
1) Child bankruptcy.
2) Dare-devil bankruptcy.
3) Stealthy bankruptcy. .
4) Posthumous bankruptcy.
II. The Honourable.
5) Goose bankruptcy.
6) Ecstatic bankruptcy.
7) Unprincipled bankruptcy.
III. The Seductive.
8) Amiability bankruptcy.
9) Bankruptcy de bon ton.
10) Amorous bankruptcy.
11) Bankruptcy by favour.
12) Sentimental bankruptcy.
“Centre of the Series. Grandiose Hues.
IV. The Tacticians.
13) Fat bankruptcy.
14) Cosmopolitan bankruptcy.
15) Hopeful bankruptcy.
16) Transcendent bankruptcy.
17) Graded bankruptcy.
V. The Manoeuvrers.
18) Running fire bankruptcy.
19) Close-column bankruptcy.
20) Marching-in-file bankruptcy.
21) Skirmisher bankruptcy.
VI. The Agitators.
22) Bankruptcy in grand style.
23) Large-scale bankruptcy.
24) Attila bankruptcy.
“Left or Descending Wing. Dirty Hues.
VII. The Cunning Sneakers.
25) Compensation bankruptcy.
26) Bankruptcy out of rank.
27) Crescendo bankruptcy.
28) Godly bankruptcy.
VIII. The Bunglers
29) Fools’ bankruptcy.
30) Invalids’ bankruptcy.
31) Crushing bankruptcy.
32) Swinish bankruptcy.
IX. The False Brothers.
33) Villains’ bankruptcy.
34) Gallows-bird bankruptcy.
35) Fugitive bankruptcy..
36) Bankruptcy for fun.
In a very depraved, very grasping century one would be a general
laughing-stock if one declaimed in a schoolmaster’s tone against the
accredited vices, against bankruptcy. It is much more sensible to chime
in the dominant tone and to see the funny side of social crimes. So I
shall try to prove that bankruptcy is an even much more laughable
villainy than it is believed to be by its promoters and protectors, who
see nothing but well-behaved trifles in its mercantile plunder.
Everything is relative, in vice as in virtue. Even robbers have their
standards of justice and honour. It is therefore no wonder that among
themselves bankrupts admit principles and degrees in rascality. I have
sought to use these as a basis for my division. I have divided them
according to the custom in three corps, the first of which contains the
light, graceful hues, the second the imposing, lofty characters, and the
third the rather inconspicuous, trivial genera. The right wing will open
the rnarch-past.
1. Child bankruptcy is that of the greenhorn who is making his debut in
the career, and inconsiderately, without any preparatory tactics,
indulges in the mad prank of going bankrupt. The notary easily puts the
affair in order. He presents it as a folly of youth and says: ‘Youth
counts on your indulgence, Messieurs the Creditors.’ The annoying
business is wound up to the merriment of the public, for these greenhorn
bankruptcies are always interlarded with amusing incidents: duped
usurers, mystified skinflints, etc.
The bankrupt of this genus can risk masses of shabby affairs:
appropriation of goods, scandalous loans, thefts from relatives,
friends, neighbours — everything is washed away by the argument of a
relative who says to the irate creditors: ‘What can you expect — he is a
child without any knowledge of business; one must close one’s eyes where
young people are concerned, he will improve with time.’
These child bankrupts have a strong support on their side, namely
mockery. One likes to mock in trade; one is inclined to mock at those
who are duped rather than to censure the villains, and when a bankrupt
has the laughers on his side he is sure to see the majority of his
creditors capitulate immediately and to win his composition by assault.
2. Daredevil bankruptcy; that of certain beginners who play double or
quits, people who gallop off at full speed, speculate and manage their
affairs like mad, make ducks and drakes with huge sums of money and play
the grand gentleman to achieve by storm a temporary credit which they
manage to secure by some secret sacrifice. When these daredevils once
get going they heap blunder on blunder and usually end up in flight. The
affair will be excused as botch work and easily arranged, for it
provides material for mockery like the preceding one.
These daredevils are extremely common in France and are here honoured
with the title of speculators. They are very sure of their game if they
hasten the discovery so that they can turn their somersault at the very
moment when they are believed to have hardly got going, when everybody
is ready to grant them credit for a first. deal and thinks: ‘he will
certainly not come a cropper in the very first year.’
3. Stealthy bankruptcy, the type carried out underhand, is one in which
the embarrassed debtor proposes ‘a small arrangement’, a rebate of 25
per cent or coverage in goods to he over-assessed by 25 per cent. The
mediator remarks to the creditors that this is very advantageous for
them, for if they press the debtor and oblige him to go bankrupt they
will lose at least 50 per cent.
This kind of relative calculation is very much insisted upon in trade.
One often comes across villains who, after they have robbed you of 30
per cent, try to prove that you are making an enormous profit because
they are not fleecing you of 50 per cent. Others maintain that they have
to bear heavy losses because they are earning no more than 40 per cent
on you and actually should be earning 60 per cent. This apparently
ridiculous way of reckoning is recognised everywhere in commerce; it has
its greatest triumph in underhand bankruptcy. People insist that this
small rebate of 25 per cent is a clear net profit compared with the 50
per cent that bankruptcy would cost. Shaken by the force of this
argument, the creditors agree to the ‘small arrangement’. He who was to
receive 4,000 francs gets 3,000, and that is by no means called
bankruptcy.
4. Posthumous bankruptcy, which is adjudicated after the hero’s death;
it becomes a plea in defence of the deceased who hoped to set his
business in order again and would certainly have been a credit to it if
he had but lived. After that his excellent qualities are praised and his
poor orphans sincerely pitied. Surely the creditors will not wish to
worry a tearful widow! If she is beautiful that would be altogether
barbaric! Meanwhile, the widow, with the help of a few persons of trust,
has managed some sizeable defalcations before the sealing. The
deficiencies will be charged to the deceased, who did not have time to
put his affairs in order and who will not come back to disprove this
little fib. If there was a deficit of 25 per cent it will easily be
increased to 50 per cent, it does not cost any more once one has made a
beginning; besides, how stupid it would he to go bankrupt with a 25 per
cent deficit when people with one of 50 per cent are still considered
honest-especially when the fault lies with a highly respectable deceased
person, whose memory it would be abominable to discredit!
The four species mentioned are those of fictitious innocence. We no w
let those of real innocence pass in review. It would be unfair to brand
bankrupts en masse because nine-tenths of them are scoundrels. I shall
adduce three truly excusable classes. We shall have but too many guilty
ones to accuse; so let us first seek some hone t people among this
confraternity, which has become so numerous since the revolution that in
some towns one no longer asks who has, but who has not gone bankrupt.
5. Goose bankruptcy is that of an unfortunate one who does not peculate
a mite, hands everything over to the creditors and throws himself on
their mercy without any deception. The other bankrupts mock at him and
declare him to be a simpletons for not at least feathering his nest; and
in fact such a loyal man is unworthy of our century of perfectibility.
6. Ecstatic bankruptcy is the work of a man who is desperate, considers
himself dishonoured and sometimes shoots himself or jumps into the
water. it means one is well behind the times if one wishes to be an
honest man in the 19th century, and moreover in trade!
All the same it is a pleasure for me to have to say that one still comes
across such people in trade. but they are few and far between — rari
nautes in gurgite vasto [Rare swimmers in a vast gulf, Virgil, Aeneid].
Everybody foretells them their fate, so well known is the fact that out
of ten villains that plunge into trade nine make their fortune, whereas
out of ten honest people nine are ruined.
7. Unprincipled bankruptcy is that of a booby who lets justice intervene
and pronounce sentence branding him and stripping him naked instead of
doing as so many clever people do, who manage to emerge from this
predicament with honour and profit.-These three honest knights are so
little worthy of the exalted confraternity that I pass over them
quickly. We now come to a sort which is more capable of earning the
applause of experts.
Why should one not let oneself be seduced by bankrupts as one is by so
many other wicked classes? We shall now inspect a clique which possesses
every kind of charm and is made to conquer all hearts.
8. Amiability bankruptcy, economical bankruptcy, is that of a little man
as sweet as honey who desires nothing but the good of his creditors,
would be desperate if he had to put them out of pocket, and presses them
to negotiate for 50 per cent in order to avoid the intervention of
justice which would devour the lot. He has the creditors notified that
he wants to treat them as friends whose interests are dear to him. Full
of gratitude for the friendly services they have rendered him, he
trembles at the thought of having to cause them lawsuit costs. These
smooth words and other guiles seduce some while others yield for fear of
justice swallowing up the lot.
9. Bankruptcy de bon ton is that of people who are very much liked in
refined society and maintain their household on an excellent footing
till the last moment. As they are comme ii faut in all respects, they
have abundant protection and when they are not at more than 60 per cent
in deficit they easily get a composition; especially when the lady and
the daughters of the house can he used as pleaders and avail themselves
of the decision of a Sanchez who allows them to wear a very transparent
scarf when they go soliciting in important matters.
10. Amorous bankruptcy is that of pretty ladies; it is not decent to
complain about it, the fair sex is entitled to consideration. A pretty
woman has a business, goes bankrupts robs you of a thousand talers; if
you pester her it only goes to show that you have no savoir vivre; she
is right when she has no patience with the intractable. I heard one such
lady say about a creditor: ‘What a manl They even say he is still
grumbling; I advise him, indeed, to complain about his fifty louis, I
should have chalked him up for twice as much!’ He had had certain
intimacies with the lady, she had the right to treat him as ungrateful.
11. Bankruptcy by favour, in the case of which it is obvious that the
creditors derive profit — and how does that happen? When the bankrupt
steals only a little, 40 per cent, and provides security, a very
substantial caution, for the rest. This is considered so fortunate that
the notary congratulates the assembled creditors, congratulates them on
an excellent piece of business, a ‘real favour’. To lose only four
thousand francs out of ten thousand and to get six thousand paid back is
a real advantage. Somebody not accustomed to commerce would be unable to
appreciate this favour; he would want to have all of his ten thousand
and would think he had been robbed of four thousand. What bad manners!
To claim that a man robs you when he deducts 40 per cent discount and
otherwise treats you in a friendly way!
12. Sentimental bankruptcy occurs with certain people who deliver
speeches to break your heart and pour out such floods of feeling and
virtue over the creditor that he would be a barbarian if he did not
instantly surrender, did not esteem himself happy to oblige such fine
people who tenderly love all those whose money they cause to disappear.
People of this kind pay with excellent excuses and very flattering
eulogies, they catch the creditor by his feelings, converse with him
only about his and their virtues; you feel so much improved when the
conversation is over: you discover in yourself ‘a multitude of virtues
which amply outweigh the sum abstracted. You have a few thousand francs
less but all the more virtues: it is a clear profit for beautiful souls.
One of those actors said to me one day: ‘I was so sorry for the
gentlemen, they are very fine, very respectable people’ — and the good
young man, as proof of his respect, robbed them at once in the first
deal with a bill of exchange which he gave them as a present and a token
of welcome. He had drawn the sum in order to come into contact with
them, and a month later he went bankrupt. What a joy for these gentlemen
to have received his respect as a security for ten thousand francs!
I have kept my word, I had promised a seductive company. There is
nothing but friendship, favour, bon ton, and tender feelings in all
bankruptcies of this truly amiable series. But if it is calculated to
win hearts. others will command wonder, give rise to brilliant upswings,
transcendent characters, and represent the heroes of their genus.
We now come to the magnificent manifestations of the spirit of commerce,
to the extensive operations which demonstrate the century’s immense
progress towards rebirth and perfectibility. Bankruptcy will here unfold
its mastery and operate according to far-reaching plans, the exposition
of which win prove the wisdom of the principle: Let the merchants do
their job, leave them complete freedom for their lofty conceptions of
deceit and plunder.
13. Fat bankruptcy is that of speculators of high standing who possess
the genius of trade. Banker Dorante has two million and wishes to
achieve as soon as possible by some means a fortune of four to five
million. By virtue of his known capital he receives credit amounting to
eight million in bills of exchange, goods, etc., so he has a fund of ten
million to play with. He plunges into grand speculation and deals in
goods and state securities. At the end of the year he may have lost his
two million instead of doubling them; you consider him as ruined — not
at all, he will have the four million just as if he had transacted good
business; for he still has the eight million that he has received and by
means of an ‘honest’ bankruptcy he arranges to pay half of this over
several years. SO it happens that after losing his own two million he
finds himself in possession of four million that he has abstracted from
the public. What a wonderful thing, this free trade! Do you now grasp
why one hears it said every day of a merchant: ‘He is doing very well
since his bankruptcy’?
A further opportunity for the bankrupt: Dorante, after a peculation of
four million, retains intact his honour and public respect, not as a
lucky villain, but as an unlucky merchant. Let us explain this.
Dorante obtained control over public opinion while he was pondering his
bankruptcy: his fêtes in town, his country parties secured him warm
supporters; the gilded youth is for him; the belles sympathise with his
misfortune — misfortune today is a synonym for bankruptcy; there is
praise for his noble character, which deserves a better lot. It almost
seems, according to what his defenders say, that the bankrupt has come
off worse than those whose fortune he has destroyed. It is all blamed on
political events, the unfavourable conditions and other verbiage current
among notaries who are adepts at holding off attacks by irate creditors.
After the first storm Dorante brings in a few middlemen, a few
opportunely distributed wads of money, and soon public opinion is so
well hedged in that anybody who dares to speak against Dorante is
declared to be a cannibal. And besides, those whom he robbed of the
biggest sums are a hundred or two hundred miles away, in Hamburg or in
Amsterdam; they will cool down in time, they do not matter much, their
distant yapping does not affect opinion in Paris. Moreover, Dorante only
causes them to lose half of their money, and custom has it that he who
steals only half is more unfortunate than guilty; so that in the public
mind Dorante stands clean from the start. After a month public attention
is diverted by other bankruptcies which create a bigger sensation and in
which between two-thirds and three-quarters went west. New splendour for
Dorante, who took only half, and then it is an old forgotten story.
Dorante’s house begins gradually to open to the public again, his cook
recovers his old sway over hearts and minds and unheeded are the cries
of some black-galled creditors who have no sympathy for misfortune and
have no regard for the consideration due to good society.
Thus in less than six months ends the operation by which Dorante and
those of his kind rob the public of millions, ruin families whose
fortunes they hold in their hands, hurl honest merchants into bankruptcy
which assimilates them to villains. Bankruptcy is the only social crime
which spreads epidemically and plunges the honest man into the same
disgrace as the rascal. The more honest merchant who has suffered from
the bankruptcies of twenty knaves is himself forced in the end to cease
his payments.
Hence it comes that the villainous bankrupts, i.e., nine-tenths of the
tribe, claim to be honest people who have been unfortunate and shout in
chorus: We are to be pitied more than blamed. If you listen to them,
they are all little saints, like galley-slaves, who all claim to have
done nothing wrong.
To this the supporters of free commerce will retort with talk of
repressive laws, of tribunals; yes, indeed! Tribunals for people who
steal several million at one go! incidentally, the saying that petty
thieves are hanged while [the big ones go scot-free] is false as regards
trade, for even the smallest bankruptcy evades justice under the
protection of the merchants.
14. Cosmopolitan bankruptcy. This is an alliance of the commercial mind
with the philosophical. A bankrupt is a true cosmopolite if after
exploiting one kingdom he goes through a series of bankruptcies in
several others. This is a safe speculation. On arrival one is unknown,
if necessary one changes one’s name, as Jews do, and receives credit at
once on the strength of the capital amassed as a result of an earlier
bankruptcy. it is a delightful idea of modern politics to hand over the
general administration of the industrial product to people who are not
tied by any solid link, any big landed estate to their native country
and who, as cosmopolites, can reckon on half a dozen successive
bankruptcies in Paris, London, Hamburg, Trieste, Naples and Cadiz. I
shall depict this bankruptcy under the heading of running fire, which
has a cosmopolite as the pivotal point of its manoeuvre.
15. Hopeful bankruptcy. This dates really from after the revolution and
is hardly half a century old. Young people formerly did not make their
debut in commerce so early, they were never chiefs before their
thirtieth year. Now at the age of eighteen they run a house and at
twenty they can have their first bankruptcy, which justifies great hopes
for the future. There are some who before they are thirty have already
been bankrupt three times and more than once got through one hundred
talers belonging to their sleeping partner. When one sees them one says:
‘he is very young to have such fame, but we are living in the age of
young people.’
16. Transcendent bankruptcy requires a far-reaching plan, an immense
upswing, an office with thirty to forty clerks, numerous ships, colossal
interests in all countries, then a sudden crash, a terrible somersault
the counterblasts of which echo in the four corners of the world, and a
chaos of liquidations on the fat of which businessmen can thrive for ten
years. It is an operation in which the mercantile genius is unfolded in
all its brilliance; it must entail a loss of at least three-quarters,
for in this mighty picture everything must he laid out magnificently.
17. Graded bankruptcy is that of a speculator who, by wisely directing
his operation, can achieve a career of seven or eight successive
bankruptcies. In this case he must adopt a different course than the one
who aims at only one or two.
The principles are:
1) in the first bankruptcy to plunder only with measure; 50 per cent is
sufficient, one must not make the people wild from the start, and the
second bankruptcy would be too difficult if one discredited oneself at
the first trial stroke through too great covetousness;
2) in the second bankruptcy to plunder only very little, not more than
30 per cent, in order to prove that the bankrupt has learned something,
that he already operates more skilfully and cautiously, and that he will
become an accomplished merchant, a worthy ‘friend of trade’ , when he
has recovered from this second blow;
3) in the third to plunder abundantly, at least 80 per cent, claiming
that it is no ordinary deficit, but one caused by extraordinary
mischance; to see it through by pleading some critical circumstances, to
draw attention to one’s good behaviour in the second bankruptcy in order
to prove that the blame lies entirely with events;
4) in the fourth to plunder only 50 per cent in order to prove that one
is a cautious man and knows how to remain within the appropriate bounds
when not swept away by circumstances;
5) in the fifth one can go as far as 60 per cent, because the public is
accustomed to it; 10 per cent more or less spoils no speculation of this
kind when public opinion has become accustomed to it; for it is known
that whoever has had four bankruptcies will also have a fifth and a
sixth. I have seen one bankrupt who was laughed at after his fourth
bankruptcy because he wore a clerical hat as a sign of piety and good
morals; he did not let himself be put off and prepared the fifth.
The sixth and seventh are ad libitum, one has them only as age draws on
and when one thinks of resting on one’s laurels. Nothing is easier than
to excuse a sixth bankruptcy; one is too old to change, nobody is
surprised any longer. For the rest, it is argued that the government
refuses to protect trade and is the cause of these little setbacks of
honest businessmen.
Let no one be surprised if I give here a few principles to he used in
bankruptcy; it is a quite new art which, like economics, from which it
sprang, has as yet no fixed principles, nor even a methodical
nomenclature. For instance, titles have been given only to she first
four stages in graded bankruptcy.
The man who has had his first bankruptcy is simply a ‘Knight’, ‘At the
second he receives the title of ‘Prince’,
At the third the title of ‘King’,
At the fourth ‘Emperor’.
For the fifth, sixth and seventh grade there are not yet any names among
the members of the trade. A true ‘friend of trade’ must rise to the full
octave. In order to be a ‘harmonious’ bankrupt one must have had seven
‘honest’ bankruptcies with average losses of 50 per cent, and then a
reinforced, a complete bankruptcy, as the pivotal point in the series;
it is then allowed to plunder to the extent of at least 80 per cent as
an indemnity for the moderation shown in the others; the fifty per cent
of earlier bankruptcies is only the honest tariff, a quite small slice,
giving nobody the right to censure, because it is the accepted rate for
bankruptcies, a fixed price, exactly like the price of tartlets or coach
fares.
In this item we deal with the mass evolutions which require co-operation
of different bankrupts for the good of trade and the triumph of lofty
truth. These collective manoeuvres will show us four sorts of evolution
artists.
18. Running fire bankruptcy. This is generally caused by counterblasts,
through a concatenation of bankruptcies, one caused by another. I shall
describe one of the medium sort, the bourgeois kind, because they are
most understandable for the bulk of readers. We shall take one of the
cosmopolitan artists, whose definition I have postponed, as the pivotal
point of the running fire manoeuvre.
Judas Iscariot arrives in France with 100,000 francs capital, which he
earned in his first bankruptcy; he establishes himself as a merchant in
a town their clientele and their good reputation, Iscariot immediately
begins to sell his where he has six respected and accredited houses as
rivals. In order to take away wares at cost price, a sure way of
attracting the multitude. Soon his rivals clamour in a most pitiful way
about him; he laughs at their complaints and continues all the more to
sell off everything at cost price.
Thereupon the people shout so that it is a pleasure to hear them: Long
live competition, long five the Jews, long live philosophy and
fraternity All commodities have become cheaper since Iscariot’s arrival,
and the public say to his rivals: You, Gentlemen, are the real Jews, you
want to earn too much; Iscariot alone is an honest man, he is content
with a moderate profit, because he runs no brilliant household as you
do. — Vain are all the representations made by the old houses that
Iscariot is a villain in disguise who sooner or later will come to
grief; the public accuse them of jealousy and calumny and crowd more and
more to the Jew.
The calculation that this thief makes is as follows: By selling at cost
price he loses only the interest on his capital, let it come to 10,000
francs annually, but ensures a good outlet for himself, makes a name for
himself in the maritime towns as a good consumer and by prompt payment
gets big credit. This trick is pursued for two years, after which
Iscariot has earned nothing, though he has sold enormous quantities. His
manoeuvre remains undetected, because Jews have only Jewish office
staff, people who are the secret enemies of all nations and will never
betray a villainy thought up by their ‘own’ people.
When all is ripe for development, Iscariot puts in his whole credit,
places giant orders in all maritime towns, buys goods on credit for the
sum of 5-600,000 francs. He sends his wares abroad and sells his whole
stock dirt cheap. When he has exchanged everything for money the good
Iscariot vanishes with his briefcase and returns to Germany, where he
has despatched the goods he bought on credit, sells them quickly and is
four times as rich when he leaves France as he was on his arrival; he
has 400,000 francs, and he goes to London or Leghorn to get a third
bankruptcy under way.
Now the veil suddenly falls and people come to their senses in the town
where he struck his blow. People realise how dangerous it is to permit
Jews to trade, those vagabonds who are not tied to anything. But this
bankruptcy of Iscariot is only the first act of the farce; let us follow
the running fire.
The Jew has six rivals; we shall call them A, B, C, D, E, F.
A had been in straits for a long time, he held out without capital, only
by virtue of his good reputation; but through the arrival of the Jew he
is robbed of all his clients, he could pursue the race only for a year,
and, not mature for these new philosophical systems which protect
vagabonds, he finds himself compelled to bow down before Iscariot’s
tactics and to declare himself bankrupt.
B endured the blow longer; he already saw the Jew’s villainy from afar
and waited for the storm to pass in order to win back his clientele
which the rascal Iscariot had taken away. But meanwhile he is involved
in a bankruptcy abroad; that ugh to accelerate his fall; he thought he
could hold out for two years but he is is obliged to go bankrupt after
only fifteen months.
C was associated with a foreign house which is ruined by another
Iscariot — for they are to be found in all towns; C is brought down by
the fall of his associate, and after making sacrifices for eighteen
months to hold out against the competition from the Jewish blackguard,
he finds himself forced to go bankrupt.
D seems more honest than he is in reality. He still has the means to
hold out, although he has been suffering from the Jew’s competition for
twenty months; but embittered by the losses which the latter has caused
him, he lets himself be carried away by the vice of which he sees so
many examples. He realiws that three of his confraternity have opened up
the march and that he will pass as a fourth in the alliance, pretexting
real or fictitious misfortunes. Thus D, wearied by twenty months of
struggle against Iscariot, sees that there is nothing cleverer for him
than to go bankrupt.
E had advanced considerable sums to his four successively bankrupt
colleagues; he thought they were all solvent, and they were indeed,
until Iscariot’s manoeuvre spoilt their business for them. E finds
himself stripped by the bankruptcies of these four houses; besides, he
himself has no more clients; the entire public crowd to Iscariot, who
sells off goods at cost price. E sees his funds annihilated, his credit
destroyed, he is pressed, and as he can no more meet his commitments, he
puts an end to it by going bankrupt.
F has sufficient means, but as a result of the five previous
bankruptcies, which warrant the conclusion that his will soon follow, he
has lost his credit in all the maritime towns. Moreover, some of the
bankrupts, having achieved a composition, are now selling at very low
prices to he able to afford their payments when the first terms expire.
In order to accelerate their sales, they lose orie-tenth of the value
and yet earn four-tenths, because they settled at 50 per cent. This
entirely crushes F, and there is nothing left for him but to go bankrupt
like his rivals.
So the establishment of one vagabond or one Jew is sufficient to
disorganise the whole merchant body of a large town and to draw the most
honest people into crime; for every bankruptcy is more or less a crime,
no matter how much it is extenuated by excellent pretexts such as those
with which I have tinted these six bankruptcies, and there is hardly
ever a word of truth in any of them. The truth of the matter is that
everybody avidly seizes the opportunity to commit a theft if it remains
unpunished.
Occasionally running fire takes the form of ricochet fire, which is
effective at a distance and involves a dozen houses in different
countries simultaneously. They have common interests and the fall of the
main house causes all the subsidiary houses concerned to crash, like a
row of tin soldiers when the man at the end of the row is pushed.’ This
is a serious combination, worthy of figuring among the great manoeuvres,
and in any case this ricochetting at a distance will have to form a
special genus in a more accurate classification.
19. Close-column bankruptcy requires favourable circumstances which
serve as excuses, and prompt masses of merchants to risk the fateful
leap. In this case they find support one in the other and are saved
because of their number, like a regiment in close-column formation
forces a way for itself with bayonets. Thus, when a favourable
opportunity presents itself, bankrupts must close their ranks and post
up a column of bankruptcies every day at the Stock Exchange; they must
have them succeeding one another so quickly that public opinion is
confused and compositions become easy to achieve in consideration of the
difficult circumstances. These bankruptcies are seen occurring
periodically in London; Paris too made a very beautiful attempt in close
column in 1800, and it ended very happily for many ‘friends of trade’.
20. March-in-file bankruptcy is a series of bankruptcies which are
linked together, but break out at suitable intervals of two to three
months. Contrary to the close columns, which follow one another day
after day, marching-in-file bankruptcies require mutual agreement so
that one goes bankrupt when one’s turn comes, at the very instant when
the predecessor has squared his composition. For instance, A has
achieved his composition three months after bankruptcy and B must
instantaneously declare himself insolvent because the mediators now find
the public well disposed and can say: it is the same story as in the
case of A, one was bound to lead to the other, the same composition must
be made. Just the same for C, who will go bankrupt three months later,
then D, E, F, and G; if they maintain their co-operation properly and
succeed in keeping to the interval, they achieve the same composition
for all. Marching in file is a very safe manoeuvre when it is cleverly
directed; but it does not fit all circumstances, and only the genius of
the prospective bankrupt can determine in which cases it is applicable.
21. Skirmisher bankruptcy involves at the start those starving wretches
who initiate a great movement and here and there cause small
bankruptcies in their retail trade. From this one concludes that
business will be difficult and the campaign a fierce one. And indeed
soon after that the heavy artillery is heard, bankruptcies involving
millions break out and hold public attention for a long time. Then the
movement ends with the rearguard skirmishers, the retailer bankrupts,
the grocers in small towns, who bring the session to an end with their
plunges.
What! Is there not yet enough vexation and can you show us something
still worse than the litany already described?
I have only named the most honest. We are approaching the descending,
despicable wing and can place here the bankrupts who operate according
to far-reaching plans but disregard moral methods and compromise the
lofty corporation.
22. Bankruptcy in grand style affects all classes of society down to the
smallest people, domestics and others, who deposit their modest savings
with a hypocrite. Soon bankruptcy plunders landowners, the smaller
middle class and the goodnatured people in their hundreds. An entire
town becomes involved. In general this type of bankruptcy affects
particularly the non-trading classes of society and does significant
harm to the corporation by arousing in the people and the petty
bourgeoisie reflections which are hardly flattering for the respectable
confraternity of the merchants.
23. Large-scale bankruptcy is that of some obscure upstart who, without
funds or backing, succeeds in breaking into big business and pulls off
just as enormous a bankruptcy as the high and mighty bankers. It is
generally wondered how this camp-follower could manage to strike up such
acquaintances and to organise such a fat bankruptcy.
This individual is the opposite of the preceding one; he takes a
different road to attain the same goal, namely to excite public opinion
against the tricks of the merchants and the preposterous laws which
leave this scum complete freedom.
24. Attila bankruptcy raises the fame of the bankrupts to the clouds and
lays a country waste as if a whole army of vandals had swept across it.
One can cite in this genus a brilliant bankruptcy pulled off in 1810 in
Orleans by an amateur named T. He went bankrupt with a deficit of 16
million so excellently distributed over Orleans that the whole
unfortunate town was laid low by it. All classes of citizens suffered
from the devastation. Fugitives went as far as Lyons and spread the
tidings: Orleans is destroyed, we are all ruined, T. is plunging
everything into the abyss.
According to detailed reports, he had carried out his scheme so well
that he had hoodwinked and plundered all classes, from rich capitalists
to poor domestics who had saved a few talers in their whole life and
deposited them with the mercantile dealer and let themselves he robbed
by him — under the protection of the fine principle: Let the merchants
do their job, they know best what is in their interest.
What robberies! What multiformity of crime in a single branch of
commercial heroism! A single one, for let it be noted that bankruptcy is
only the thirty-first feature of this lying trade for which science
demands complete freedom under the pretext that the merchants know best
what is in their interest-they know that indeed all too well, but they
know only too little what is in the interest of the state and of
industry, and so we are mystified by science and its theories on the
absolute freedom of merchants.
From the description of great feats of heroism we go on to more modest
trophies. Not everything is great in bankruptcy like the three
categories of the centre. Still, in the left wing too we shall bring
together a remarkable collection, bankrupts in softened shades, people
whose more burgherly virtues and failings will do good to the eye after
the vivid brilliance of so many heroic deeds; we shall still find
cohorts capable of cheering the reader — especially the last, that of
the false brothers, who bring ill fame ‘on the corps of bankrupts. — Let
us begin with a more serious hue.
25. Compensation bankruptcy is declared to obtain compensation for some
accident. For instance, a speculator loses a lawsuit today which costs
him 100,000 francs. So tomorrow he declares himself bankrupt, and this
brings him 200,000. Thus he wins the sum in litigation instead of losing
it. This capacity of trade to compensate itself for the disfavour of
circumstances is one of its finest qualities; it can find its interest
in every mishap [on land and sea]. If a shipowner experiences a
shipwreck, he rehabilitates himself the next day by a good bankruptcy;
and this type of bankruptcy is accepted without any contradiction
because the notary says: ‘It is not his fault, events forced him to it,
he is more to be pitied than blamed.’
To this a landowner whose deposit thus goes west will answer: ‘I cannot
get compensation when hail or a flood ruin my crops, I have nobody to
fall back on.! — A fine argument! Should not landowners know that under
the present order of things they are a dependent class, dependent on the
unproductive people called merchants who dig their claws into every
product of industry to get themselves paid at the expense of the masses
like a volunteer corps which, for lack of an enemy to plunder, strips
its own friends And the good people? Such is the merchant, a veritable
cossack of industry whose motto is: ‘I do not work pour la gloire, I
must have something to rake in.’ Every merchant wants to rake in, and if
somebody hopes to rake anything in from him by a lawsuit or otherwise,
the merchant has his resources at hand and rakes in from others by means
of a compensation bankruptcy.
26. Bankruptcy out of rank is that of a wise man who has foreseen
everything and put something aside with which he can face the storm and
tame the intractable. if he wants to earn 200,000 francs by bankruptcy,
he puts 300,000 aside, placing a third of it in useful hand-outs,
presents, etc.; he knows how to quieten the most loud-mouthed, how to
paralyse justice; a wad here, a wad there, and his case is briskly
carried through. His bankruptcy brings him in the end a good number of
friends, who get their piece of the cake and say that he is a man comma
if faut who knows business inside out.
27. Crescendo bankruptcy plays a farce in several acts which increase in
interest as they develop. To start with, the affair is presented as a
slight embarrassment, a case of shortage of disposable capital with a
discount of 30 per cent necessary to prevent a crash. ‘ne creditors
become worried and negotiate on the quiet, for they have been given to
understand that things could take a bad turn and that the man in
question must be supported. Meanwhile, in three months he is tottering
again. Again the creditors are visited and made to fear his ruin; it is
admitted that things are worse than was thought and that 50 per cent
must be agreed to. Some of the creditors are vexed, the matter becomes
entangled and bankruptcy is declared — and indeed on such terms that
80-90 per cent is lost instead of 50 per cent and the rest can be paid
up only after some years. But the composition is still easy to bring
about because the creditors, who have been skilfully handled and have
successively become accustomed to a loss of 30, then 50, then 70 per
cent, are weary of war; they sign and give the cursed business up as
altogether lost, although it was said at the beginning that only 30 per
cent was going to be lost. This method is not the worst and can he
recommended to speculators who stick to principles.
28. Godly bankruptcy is that of a holy man who belongs to all the
confraternities and holds the cordon of the canopy at processions. He
easily finds credit and depositors and can prepare a far-reaching
bankruptcy underhand. I have seen some bankruptcies of this type when
the loss was 90 per cent. The advantage in such a case is that the
bankrupt finds enough people who excuse him: ‘Ah, he is a very pious
man; if he has had no luck in business it Is because he sets no store by
the goods of this world. — This piety is held up in order to hasten the
composition, by which the pious apostle retains a good part of the goods
of this world, together with the prospects of those of the other.
In every profession one finds ignoramuses who work without any
principles and can produce only a bad job with the best material. So
among bankrupts too there are dunces who can do nothing else but change
gold into copper and ruin themselves in a very stupid manner where
others would do splendid business. I want to adduce and deal briefly
with four genera, for this really honest category has nothing
entertaining. I only let them march past for the sake of completeness of
our analysis.
29. Fools’ bankruptcy is that of those befooled people who, enticed by
fashionable catchwords, venture into trade without knowing its tricks
and naturally scorch their wings like moths in the candlelight. Since
1789 there have been many big property-owners who had no need whatever
to get involved in this turmoil; they have been seen to lose a rich
heritage and end up in bankruptcy by which they parted with their
fortune and their honour. It must be noted incidentally that only the
honest man loses his honour in bankruptcy, whereas the rascal, who knows
the great principles of trade, can manage his bankruptcies in such a way
that he acquires wealth and honour. But the great gentlemen who found
themselves in this wasps’ nest of trade wanted to negotiate honestly;
they were surrounded by intriguers, played with like a ball and forced
to end up with the bankruptcy of their illusions. Many small landowners
have made the same mistake. Swept along by the mercantile race, they
have abandoned their field, sold their small plot of land to set up a
shop in town and meet their inevitable ruin.
30. Invalids’ bankruptcy is that of an incorrigible who wants to die
with arms in hand. One sees many who ought to retire and who, weakened
by age, can do nothing but bungle, are ignorant of the latest
achievements and in their old age lose a slowly amassed fortune and
obstinately hold out until repeated blunders make bankruptcy inevitable.
How is one to describe a man of eighty who is a bachelor and has a
fortune of two million, indeed sufficient for a single and aged man, and
still obstinately continues huckstering at an age when he should retire
and weep over his sins? When such a man gets himself ruined and loses
his brilliant fortune in his eightieth year he is truly a mercantile
fanatic. Such a man was the invalid bankrupt who is the prototype of
this paragraph; for I have a prototype to show for all these species* so
that I shall not be accused of exaggerating. Incidentally, many of these
aged fanatics are to he found in every town; because they insist on
continuing their trade, they deserve to be shamefully ruined, for today,
when everything is raised to its quintessence, the need, in trade as in
war, is for young people educated in modern tactics; and if bankruptcy
is regarded as a harmless game for young people, it is indeed shameful
for wealthy old men who should have thought of retiring twenty years
ago.
31. Crushing bankruptcy is that of enraged competitors who consciously
rush towards ruin and indeed ruin themselves to dispute a small share of
profit from a rival. One sees a great number of these who work at a loss
in the hope that their rival will be ruined before they are, and that
they themselves win remain masters of the battlefield. This disorder is
prevalent particularly in the carrying trade and in the cloth markets
such as Beaucaire, and it leads to the ‘crushed’ being forced to go
bankrupt.
32. Swinish bankruptcy is that of a greenhorn who, instead of operating
according to the principles, ruins himself, his wife and children and
moreover exposes himself to the talons of justice and the contempt of
the ‘friends of trade’, who respect only fat bankrupts who conform to
the principles. In the jargon of commercial knaves they say of a
bankrupt who thus ruins himself, his wife and children: That is indeed
really swinish.-If he had had a fat bankruptcy, they would have called
him a smart young man, a clever brain.
I give the name of false brothers to those who expose the honourable
clan of the bankrupts to the contempt of the public. Some of them
provoke indignation, others laughter. I do not include in this class the
transcendents, who steal by the million — these are always respectable
and never compromise the clan; a great thief has never been contemptible
in civilisation, whereas the small ones are the people to be hanged, and
when they excite public opinion against villains and small bankruptcies
they are unworthy of admission to the corporation and deserve to be
styled as false brothers.
33. Villains’ bankruptcy is that of small-scale blackguards who commit
such obnoxious petty thefts in their bankruptcy that the neighbourhood
says they ought to be hanged. That would not be the case with thefts of
100,000 talers; but thefts of 100 talers” suggest the idea of the
gallows. incidentally these ideas are not dangerous for the knave,
because the confraternity of the bankruptsb never allows its colleagues
to he molested; otherwise justice would soon feel authorised to pass on
from the petty thieves to the big ones, which would be very awkward for
those who act according to great principles and have found a place in
good society after an ‘honest’ bankruptcy.
34. Gallows-bird bankruptcy is that by which besides dirty tricks, the
man concerned commits also learned acts of perfidy, for instance, robs
himself to provide an occasion for sentimental tactics.
Scapin, a petty crook indulges in a scaramouch bankruptcy involving only
40,000 francs; he steals 30,000 francs, which constitutes the profit on
the operation, and then offers the creditors the remainder, amounting to
10,000 francs. When he is asked about the deficit of 30,000 francs, he
says that he does not know book-keeping like big merchants, and that he
has been ‘unlucky’. Perhaps you believe Scapin will be punished because
he is a petty thief who steals only 30,000 francs — but do not the
creditors know that if justice intervenes it will eat up the remaining
10,000 francs just for breakfast? And even when these 10,000 francs have
disappeared, nothing will he settled; if they want to have Scapin
hanged, it will cost them perhaps an additional 10,000 francs and it is
still not known whether they will succeed. It is therefore better in any
case to accept the moderate sum of 10,000 francs than to lose it and
still have to pay just as much over and above. Through his notary Scapin
puts forward this argument, so that the bankrupt himself threaten his
creditors with justice. And why should Scapin’s creditors he furious
with him? Some of them think of following his noble example, the others
are already ahead of him in their career. So, as wolf does not eat wolf,
Scapin soon finds a number of signatories who declare themselves
satisfied with his proposals; others sign for fear that justice may
intervene; others again are intractable and speak of sacrificing all to
have a blackguard sent to the galleys. Then Scapin sends them his wife
and children, who implore his mercy with well-practised wailings, and so
in a few days Scapin and his notary receive the majority of signatures.
Thereupon the obstreperous, who are no longer needed, are made fun of.
Their rage is laughed at. Scapin answers them with ingratiating words
and profound bows, and immediately after the happy issue of the first
bankruptcy, he starts to think of a new one.
35. Fugitive bankruptcy is customary among small tenants in large towns.
As the date of payment approaches they bolt and bring their wretched
movables to safety ,under cover of the night.’ It is very much in vogue
among the silk weavers in Lyons; it is also resorted to by all elegant
individuals of both sexes who order the very best things at restaurants,
the tailor’s and the shoe-maker’s, and are very accommodating as far as
the price goes because they intend to pay with fine words and to bolt as
soon as their creditors begin to get unpleasant.
This kind of bankruptcy is droll and shows the corporation in a bad
light. When one scoffs at a man who has cheated twenty petty
shopkeepers, one easily becomes accustomed to scoffing at a man comme il
faut whose bankruptcy ruins twenty families. These freedoms of criticism
must be suppressed in order not to imperil the respect due to the
honourable bankrupts among the ‘friends of trade’.
36. Bankruptcy for fun is that of a small retailer who goes bankrupt
according to the very best form just like the high and mighty bankers
and does not give his creditors more than five per cent. Among others, a
Lyons actor, distinguished for his comical roles and therefore very much
loved by the public, went bankrupt in this way. In all due form he
offered his creditors the sum of three per cent. Some of them were vexed
and wanted to send the bailiff to him; but he mystified justice as he
mystified it on the stage in the Avocat Patelin, and all the public were
on his side. His bankruptcy was a highly amusing comedy, which afforded
many a priceless scene. The creditors could swear, the public only
laughed at them as they did at Guillaume in the Avocat Patelin.
I have now gone rapidly through all these definitions. However, my list
is so incomplete that it can be considered as a mere outline to which
everybody can supply the missing features.’ There are masses of
remarkable ones. Only a few days ago the Paris papers reported a
brilliant bankruptcy, that of a certain Y., who established a pompously
publicised agency with no more than 10,000 francs. I believe it was an
office for the regeneration of trade or some other pompous title, by
means of ‘ which he obtained a million from a few jackanapes, whom he
paid as usual with a good bankruptcy. In a word, the number of
bankruptcy genera which I have collected here can easily be doubled.
When one reflects that bankruptcy is only a single one of the thirty-six
features of trade, one finds difficulty in explaining why this so
fearful mine of crimes, this mechanism of trade, has not yet been
analysed; and that in this century, which is so uncompromising towards
the crimes of all classes in society and has made public the crimes of
kings and popes.
When one reads this collection of merchants’ filth, one cannot help
wondering how it comes that a century which calls itself the friend of
lofty truth has been able in all seriousness to grow enthusiastic over
this lying trade, arguing that after all one cannot do without trade; as
if for that reason one must accept fraud and theft such as those which
we have listed in one single crime of trade, namely bankruptcy.
However, let us finish what we have to say about this.
The saying that justice sends only petty thieves to the gallows is
proved false in trade. The bankrupt, even the smallest, evades
prosecution, protected by the merchants themselves. We saw that under
the last category (false brothers), which is that of miniature
bankrupts.
It would be vain to quote the punishment of a few fraudulent bankrupts;
ninety-nine manage to get away with it, and if the hundredth fails he
must be a stupid devil and not know how to pursue his intrigue. For the
operation is so simple nowadays that the old precautionary measures have
long ago been forgotten. Formerly a bankrupt used to flee to Trient,
Liège or Carouge, but since the rebirth of 1789 this custom has been
abandoned. Everybody now goes bankrupt en famille. The matter is quietly
prepared, and when it explodes, one goes for a month to the country, to
the intimacy of one’s relatives and friends; the notary meanwhile puts
everything in order. After a few weeks one reappears, and the public is
so accustomed to this kind of story that it regards it as a pleasant
joke; it is called ‘being confined’ and one says quite dispassionately:
‘So-and-so is back, he has just had his confinement.’
I have noted that bankruptcy is the only social crime which becomes
epidemical and forcibly carries the honest man along the road of the
scoundrel. If to bankruptcy we add stockjobbing and so many other
infamies, we shall find that I was right when I affirmed that civilised
people had never committed so many political follies as since they
plunged into trade. Never have the philosophers, who dream of nothing
but counterbalance and guarantees, thought of providing the social body
with the guarantee which governments, judiciously enough, demand of
their fiscal agents! A prince assures himself of the rectitude of his
treasurer by means of a cash security and the prospect of inevitable
punishment if he were to dare risk or squander the public monies
deposited with him. Why does it not happen that the collectors of public
monies appropriate the revenues from taxes and write letters of
lamentation to the government saying: The misfortunes of the times, the
critical circumstances, the deplorable accidents, etc., in a word, I
have gone bankrupt, insolvent, or whatever you call it. Your treasury
should contain ten million; I offer you half of that sum, five million,
payable in five years. Allow yourself to be moved by the misfortune of a
lamentable treasurer, maintain me in your confidence and the
administration of your treasury, without which I am not even able to pay
you the half which I now offer you; but if you leave me my position and
my income, I shall endeavour to discharge my obligations towards you
honourably, that is, to treat you to a second bankruptcy as soon as the
treasury is full again.
Such in brief is the content of all bankrupts’ letters. If treasurers do
not follow this example, it is because they know that no philosophical
theory can save them from the punishment which the bankrupt evades-under
the protection of the principle: ‘Leave the merchants complete freedom
without demanding any guarantee against their machinations.’