The Universal Bank

Founding of the Banque Universelle

Saccard, ruined for the second time and brooding at Champeaux', joins forces with the engineer Hamelin and his sister Madame Caroline. The new bank is launched with a capital of 25 million francs in 50,000 shares of 500 francs par, backed by a sweeping Eastern programme: the United Steam Navigation Company, the Carmel silver mine, the National Turkish Bank, and a future Asia Minor railway. The early operations are deliberately modest — small placements, short‑term paper — to build a reputation of "honest and correct" beginnings.

Since its foundation on October 5, until December 31, it had realised profits amounting to rather more than four hundred thousand francs.Chapter VI

End of year one — a respectable +20 %

The first ten weeks of trading bring a slow, "normal" rise from 500 to 600. The bank has covered a quarter of its preliminary expenses, paid 5 % to shareholders and 10 % to directors, and carried a modest surplus to the reserve. Nothing about it yet smells like a Saccard enterprise.

They had risen from five hundred to six hundred francs, not suddenly, but in a slow normal fashion, just like the shares of any respectable banking house.Chapter VI

First general meeting — capital doubled

At the Rue Blanche assembly hall, Hamelin presents the maiden balance‑sheet: 400,000 francs of profit in less than three months. The board has already agreed to double the capital from 25 to 50 million by issuing 50,000 new shares — reserved share-for-share for existing holders — at 520 francs (par 500 plus a 20-franc premium for the reserve). It is the first appearance of the device that will define the bank: each capital-raise is announced as a triumph and is in fact a vehicle for self-dealing. Some 3,000 of the new shares are not actually subscribed and end up parked in the Sabatani account on the bank's books — the original sin from which everything else grows.

Stationary at ~750 — the bank settles in

For more than a year the share drifts upward to about 750 francs and then sits there. Saccard moves into the Princess d'Orviedo's mansion on the Rue Saint‑Lazare, captures the Catholic newspaper L'Espérance through Jantrou, and quietly builds an advertising machine that purchases or subsidises a dozen petty financial sheets. Gundermann, the great Jewish banker, watches without yet acting.

I say, Dejoie, was it Monsieur Jantrou who just came in?... You know that Universal have reached 750.Chapter VI

The Sadowa coup — insider trading on a war's outcome

News of the Battle of Sadowa reaches Paris on the evening of July 4. Markets expect a long Austro-Prussian war; orders to sell rain on the corbeille. But the deputy Huret, having read on Rougon's desk a confidential dispatch announcing that Austria has ceded Venetia and accepted Napoleon III as mediator, runs straight to Saccard. They have less than a day before the news leaks. Saccard scatters buy orders across multiple brokers — Jacoby, Mazaud, Nathansohn — disguising the coordination by meeting them "by chance" on the boulevard, at a restaurant, through Delarocque's mistress. By midnight he is positioned long to the tune of more than 5 million francs.

It was a memorable Bourse, one of those great days of disaster — disaster caused by a totally unexpected rise — which are so rare that they remain legendary.Chapter VI

When the truth breaks at quarter to two on July 5, prices leap 40–50 francs across the board within minutes. Settlement reveals an 8 million franc loss for Gundermann alone; Saccard personally pockets ~2 million, and Hamelin's "share" is set at 1 million on the books. It is the moment the bank stops being a respectable house and becomes a battering ram aimed at the Jewish bankers.

Second capital doubling — 50M to 100M

Two months after Sadowa, Saccard pushes through a special shareholders' meeting that authorises a fresh capital doubling. 100,000 new shares, again reserved share-for-share, this time at 675 francs (par 500 + 175-franc premium). Hamelin, still in the East, writes anxiously: false declarations have once again been made at Maître Lelorrain's office. The Bank itself ends up holding nearly 30,000 of its own new shares — about 17.5 million francs' worth — concealed under the Sabatani account and various dummy names. A "financial establishment which speculates in its own stock," Zola tells us, "is lost." Caroline, infatuated, brushes her brother's warning aside.

Three days, +150 francs

The mechanical effect of the issue is immediate.

The shares, which for some months had remained stationary, their average quotation at the Bourse being seven hundred and fifty francs, rose to nine hundred francs in three days.Chapter VI

The Rue de Londres palace — first stone laid

Workmen begin demolishing an old building in the Rue de Londres so that Saccard can raise the temple-cum-music-hall in which he intends to enthrone the Universal. The same afternoon, Caroline learns from the porter Dejoie that Saccard is in his private room with the Baroness Sandorff. The personal and financial stories begin running on parallel rails toward the same crash.

Universal crosses 1,000 — Gundermann starts watching

By December the share commands more than 1,000 francs. Gundermann, who has paid his 8 million Sadowa loss "without complaint," now begins to think tactically about revenge — but with characteristic patience. His doctrine: a share is worth its issue price plus interest, no more. Anything above that must mean-revert. He decides he will begin selling Universals when they reach 1,500.

His theory was that no man could bring about events at the Bourse, that at the utmost one could foresee them and profit by them when they came to pass. Logic was sole ruler.Chapter VI

The Universal Exhibition opens

The Empire's "great season" begins. A procession of nearly a hundred sovereigns, princes and princesses descends on Paris. Two weeks later Saccard inaugurates the Rue de Londres palace — a façade "rich in flowery ornamentation, suggestive in some respects of a temple, in others of a music hall." The vaults, deliberately visible behind glass partitions, glitter with what look like the barrels of gold from a folk-tale. The staff has grown to 400; Saccard reigns "with the pomp of a tyrant who is both adored and obeyed."

The Beauvilliers ladies and Dejoie sell themselves on hope

In Saccard's gilded Louis Quatorze office, the ruined Comtesse de Beauvilliers and her daughter Alice resolve to sell the family farm — Les Aublets, valued at 400,000 francs in better days, now sold for 240,000 — and convert the proceeds entirely into Universal shares. Saccard quotes them an average market price of 1,300 francs and promises that the price "will be worth a million" by year-end. The porter Dejoie, who began with eight shares bought from his late wife's savings of 4,000 francs, now wonders whether to sell at 10,400 to dower his daughter Nathalie. Saccard tells him not to: "Do you think we are going to stop at thirteen hundred?"

Now they are quoted to-day at an average rate of thirteen hundred francs.Chapter VIII

Third capital raise — 100M to 150M, with a fictional balance-sheet

Hamelin returns from the East at the end of July and the special meeting is held in August. Saccard's "stroke of genius": issue 100,000 new shares at 850 francs (par 500 + 350-franc premium) and use a projected 36 million franc profit for full-year 1867 to "release" all 200,000 existing shares. From December 31, 1867, says Saccard, the bank will have 300,000 fully paid-up shares of par 500 — capital 150 million. Hamelin objects that the dividends are fictitious; Caroline asks why not just issue at 1,100 to raise the same money cleanly. Saccard explodes. The whole point, he argues, is "to take money out of people's pockets before it has even got into them" — to leave the imagination room to inflate. He confesses his real ambition for the first time:

Do you know what I want? Why, I want the shares to be quoted at three thousand francs!Chapter VIII

Hamelin warns that he will sell once they pass 2,000. The shareholders' meeting itself is a love-feast: thunderous applause, Sabatani planted in the front row shouting "Brava!" Lavignière's auditor's report endorses the imaginary 36-million figure. Jantrou (coached by Saccard) plants the question whether the Bank holds any of its own shares; Saccard, perched on tiptoe, replies "Not one!" — a lie. None of this is checked.

The Côte Financière bought — fortnight effect

Jantrou's coup, long held in reserve: the purchase of the Côte Financière, a financial sheet with twelve years of unblemished honesty behind it. The serious middle-class subscribers, the country priests, the prudent rentiers — all start buying. Within a fortnight the share is at 1,500.

"Dieu le veut!" — 2,000 in the last days of August

The salons take over the campaign. Pretty women, "with their little purses of chain gold," catechise their men: "What! you have no Universals?" The crusade-of-Asia rhetoric reaches its full pitch. Visions of Constantinople, Damascus, Bagdad, India, of the Pope eventually installed at Jerusalem and the Treasury of the Holy Sepulchre. The mania reaches "the small and humble," servants and shopkeepers, the tramping crowd that follows great armies.

In the last days of August, by successive leaps, the shares rose to two thousand.Chapter VIII

Gundermann begins selling, but quietly — never showing himself at the Bourse, never sending an official representative. He plays for the long mathematical certainty.

Hamelin's parting instruction

Hamelin leaves for Rome and the East after fulfilling the Lelorrain formalities (signing, again, false declarations that the new capital is fully subscribed). On the eve of departure he tells Caroline to sell their personal shares the moment the price exceeds 2,200, "deeming it both foolish and dangerous" to ride higher. The trigger is hit during the first week of November.

The shares reached the price of two thousand two hundred francs during the first week in November.Chapter IX

Caroline begins the secret betrayal

The "second fortnight of November" arrives. Quotations now show resistance — for the first time Saccard senses a coherent group of bears. He gives orders to buy under borrowed names: the Bank itself begins consuming itself. Caroline confronts him about the ethics of any quote above 2,000; he flies into a rage. She does not tell him that she has, the day before, sold a thousand of her own shares.

The quotation of two thousand three hundred francs had just been reached and he was delighted, albeit feeling that resistance was being offered at the Bourse.Chapter IX

The Baroness Sandorff, now no longer in Saccard's confidence, takes Jantrou's advice and offers herself as Gundermann's informant. The campaign of betrayal-from-within has begun.

The Maugendre breakfast — a +20 day

Marcelle Jordan visits her parents on a wet morning to beg for 500 francs and finds them transformed. Her mother, who once trembled at the very idea of speculation, now harangues her father for thinking of selling their 75 shares "at the unhoped-for figure of two thousand five hundred and twenty francs" — a profit over 100,000 francs. The price went up another 20 the day before. The Côte Financière is promising 3,000. Marcelle leaves empty-handed. Her own husband Paul will earn nothing from the price; her parents will lose everything to it.

Caroline sells her last 1,000 shares

"Reports were openly predicting catastrophe," but the price kept climbing. Caroline tells Saccard that morning she has just parted with their last thousand shares at 2,700, on Hamelin's written orders from Rome. He stares at her, "overcome, as though confronted by the blackest of treasons":

You have sold, you! You, my God! ... So it was you who were fighting me, you whom I felt in the dark!Chapter IX

She begs him to let the rise stop. He springs to his feet:

I mean that the quotations shall reach three thousand francs! I have bought, and I will buy again, even if it kills me. Yes! May I burst and all burst with me, if I do not reach the figure of three thousand francs.Chapter IX

After the December 15 settlement

The bears have been crushed at another fortnight's settlement. The price rises to 2,800, then 2,900. Word spreads that Gundermann's losses in this single campaign now run to dozens of millions and that "his back may be broken at last." All Paris speaks of nothing else.

"The uproar of an insane multitude"

The 3,000 line is breached.

And on the 21st the quotation of three thousand and twenty francs was proclaimed at the Bourse, amid the uproar of an insane multitude. There was no longer any truth or logic in it all; the idea of value was perverted to the point of losing all real significance.Chapter IX

That evening, when his carriage arrives at the Rue de Londres palace, a valet rolls a carpet from the vestibule steps to the gutter so that Saccard need not tread on the common pavement.

The Battle of Millions — Saccard's Austerlitz

The last day of the year, the December settlement, a brutal frost outside. The hall of the Bourse is full at 12:30. Mazaud at his post. Jacoby and Delarocque ranged across the corbeille basin against him. The morning quotation is 3,030; the price drifts down to 3,025, then 3,020, before a fictitious telegram from Lyons (a Saccard plant) triggers the final push. Mazaud bids 3,030, then 3,035, then 3,040, then 3,045. The hall heaves. The closing bell falls on:

Universals had reached three thousand and sixty, a rise of thirty francs.Chapter X

For Saccard it is total victory. The bears — Gundermann included — have been routed. Maugendre, Sédille, the Marquis de Bohain, the Beauvilliers ladies, Dejoie, the priests of provincial France, the duchesses of Paris all wake up rich. The whole bank is, in fact, as Saccard knows but they do not, sustained by 200 million francs of its own coffers spent supporting its own price.

The first crack — −50

The day after settlement balances are reckoned, Universals drop 50 francs. The general market has been weakening; two or three rotten ventures collapse with a bang. On the surface 50 francs is nothing — prices have moved hundreds of francs in a session. But everyone in the hall feels the tremor.

Eleven days of attrition

Day-by-day moves: +30 on the 4th (Saccard buys heavily), −40 on the 5th to 3,000 flat, + on the 6th, − on the 7th–8th, + on the 9th (a "signal advantage" — bears recoil briefly), − on the 10th. The dreaded option-response day on the 14th, against expectation, strengthens the price. The Bank's coffers have been emptied to fund all this.

Mid-month settlement — Saccard quietly loses for the first time

The 15th brings settlement and the official quote is 2,960 — only 100 francs below the December 31 peak. Saccard, in public, calls it a victory. Privately the books tell another story: for the first time the bears collect differences after months of paying them, Mazaud is now carrying Saccard's positions on credit, and the broker is dangerously over-extended. The Baroness Sandorff loses 10,000 francs. She decides — on Jantrou's advice — to take her treason to Gundermann directly the next morning.

Petite Bourse — wholesale defection

That evening, on the footway of the Boulevard des Italiens, the unofficial after-hours market reveals the truth. Universals fall 300 francs in a few hours; insiders are dumping. Daigremont — once Saccard's largest syndicate ally — has just told his broker Delarocque to abandon all positions and sell his three million's worth. The first quotation at the open the following day will be 2,800.

That evening nearly two thousand persons remained collected there… Universals were offered on all sides, and the quotations fell rapidly. Rumours soon became current, and anxiety set in.Chapter X

The cascade — eight hundred and thirty

Cold rain pours on Paris. The hall is a "cloaca, muddy like an ill-kept stable." Saccard at his pillar, smiling, telling everyone within earshot how worried he is about a camellia killed by frost in his courtyard. He still expects Daigremont's reinforcements at any moment. Jacoby opens the bidding at 2,800. Mazaud, with his last cartridges, briefly pushes the price up to 2,650. Then Delarocque reveals himself:

"I have Universals! I have Universals!" he called. And in a few minutes he had offered several millions' worth.Chapter X

The cascade through the last half-hour: 2,400 → 2,300 → 1,500 → 1,200 → 900. At the closing bell, in what Zola calls "a frightful silence":

The final quotation of eight hundred and thirty francs became known.Chapter X

Mazaud, in the brokers' room, drinks a glass of beer at the buffet and looks around the hall "like a man who had never had a good view of it before." He will shoot himself within the week. La Méchain, the rag-and-bone speculator, is already perched on the gallery rail with her old black leather bag.

Below par

Hamelin, summoned by telegram, arrives from Rome to find the share at 430 — seventy francs below par — and still falling. The books, finally read with eyes that want to see, reveal the scale of the rot: 27,000 shares concealed in the Sabatani account (~48 million francs); another 20,000 under employees' and directors' names (~48 million); 20,000 more bought on time during the second fortnight of January (67 million); 10,000 more bought at the Lyons Bourse (24 million). One quarter of all issued shares now sit in the Bank's own coffers, paid for with 200 million francs of the depositors' money.

The long tail — toward five francs

Saccard is arrested. The Bank declares failure. Caroline tells the Jordans her grim arithmetic about Dejoie's ruined holdings:

The shares are now at thirty francs, they will fall to twenty francs, to a hundred sous apiece. Ah, mon Dieu! What will become of those poor people, at their age, accustomed to comforts as they are?Chapter XI

Dejoie's daughter Nathalie has run off with the man across the street. The Maugendres are wiped out. The Beauvilliers ladies lose Les Aublets and the family mansion. Mazaud kills himself; Sédille's silk house collapses; the Baroness Sandorff returns to her husband. Saccard, broken but unconquerable in his own mind, leaves France for the Netherlands to begin the next scheme.