In Toulouse, the failure of a stockbroker is not measured solely by the columns of a balance sheet. It is read in the claims of those who demanded the return of a security entrusted to be sold, of an annuity deposited as collateral, or of modest savings placed in the hands of the man whose office required him to safeguard them. When Pierre-Zéphirin Gauja appeared before the Assize Court of Haute-Garonne on November 14 and 15, 1872, the Gazette des Tribunaux framed the trial as that of a ministerial officer who had turned funds intended for other ends to his own private speculations.
The newspaper assigns the accused two different ages: forty years in its prefatory remarks, forty-one in the text of the indictment it reproduces. It depicts him as a dark-haired man, plainly dressed, whose answers, delivered in an undertone, appeared embarrassed. Prior to becoming a stockbroker in Toulouse, he had been educated at the seminary, had received minor orders, taught school, and subsequently clerked in a notary’s office. The courtroom, according to the correspondent, was crowded; among the witnesses seated before the court were numerous priests, for the impaired savings belonged, in significant measure, to persons of modest means and members of the clergy. The journal notes their presence, but does not record the depositions one by one.
The indictment dates Gauja’s entry into office to the month of July 1862, at a time when he commanded few resources of his own. It reckons at 38,000 francs the loan contracted to finance the purchase of the office, his share of the common fund, and the required surety bond; yet the very same passage itemizes 25,000 francs for the office, 4,765 francs for the common fund, and 12,000 francs for the surety bond, amounting to 41,765 francs. The printed figures thus fail to tally: these three items exceed the stated amount of the loan by 3,765 francs. Further on, the journal dates his partnership with François Sage, a financial backer, to March 5, 1866; this partnership was formed well after his accession to office in 1862.
Sage is reported to have contributed 42,151 francs and 43 centimes to a company whose capital was fixed at 84,302 francs and 86 centimes. Gauja’s refusal, the prosecution continued, to produce the books or permit an audit of the cashbox aroused his partner’s suspicions. The latter demanded the dissolution of the partnership at the close of 1866. On the first day of 1867, the younger Sieur Hénault is said to have taken his place, reimbursing the firm’s treasury for the capital withdrawn by Sage. The judicial narrative thus sketches the portrait of a house whose capital was supplied by external partners, while their trust evaporated the moment the ledgers remained closed.
A preliminary imprudence had already been laid to Gauja’s charge: he had reportedly endorsed, to the extent of 30,000 francs, commercial paper belonging to three individuals who were soon declared bankrupt. The indictment distinguishes this professional misconduct from what ensued. Beginning in January 1867, the broker is alleged to have engaged, on his own account, in stock market operations strictly forbidden to his profession. To conceal these maneuvers from his clerks, he entered them under assumed names: Carbonne, his father-in-law; Pagnon, his brother-in-law; and an abbé designated only by an initial.
For more than three years, until the settlement of June 30, 1870, the losses thus imputed to these three fictitious clients reportedly mounted to 189,278 francs and 65 centimes. The mechanism is laid bare in the indictment: Gauja paid the differences due at settlement dates with cash and securities entrusted by his clients for entirely different purposes. Monies remitted for the purchase of securities, sums left on deposit or as collateral, government annuities, stocks, and bonds destined to be liquidated or converted—all these assets entered the narrative as so much property for which an accounting was owed.
The summer of 1870 momentarily reversed the tide of losses. The Gazette reports that the spread in prices between sales and buybacks enabled Gauja to realize a profit of 157,587 francs in July and August; the bankruptcies of two correspondents, Saunier and Legendre, reduced this profit to 112,289 francs. According to the prosecution, this reprieve allowed him to satisfy his most pressing creditors, preserve the confidence of a portion of his clientele, and maintain his business. The subsequent financial stagnation suspended speculation until trading resumed on the major bourses; Gauja then reportedly resumed his operations under the same assumed names.
This second series of transactions, pursued until January 15, 1872, ended in losses of 92,182 francs and 62 centimes. Yet the detailed amounts—losses of 189,278 francs and 65 centimes, minus the net profit of 112,289 francs, then increased by the 92,182 francs and 62 centimes of the second series—produce a balance of 169,172 francs and 27 centimes, whereas the indictment prints a total of 169,772 francs: an unresolved discrepancy of 599 francs and 73 centimes remains between the published figures. The accounting expert drew up the balance sheet with Gauja’s participation and concurrence: 335,667 francs and 50 centimes in liabilities against 136,547 francs in assets. The report states that the dividend to be distributed “will barely reach 40 per cent,” projecting an eventual payout in the neighborhood of forty percent rather than an unattainable ceiling. These are the figures of the prosecution as reported by the journal; the article reproduces neither the ledgers nor the precise details of the expert’s audit.
The effective suspension of payments dated back, according to the same text, to January 1872. Clients demanded the money intended for the purchase of securities, the sums deposited or pledged, and the restitution of their paper. On January 17, Gauja reportedly convened his creditors to lay before them his situation and propose an amicable settlement. Formal complaints soon followed. Called upon to explain the breaches of trust, he admitted, according to the indictment, having employed for his stock-market operations the securities and specie delivered to him on the express condition of returning them or putting them to a specific use.
Fifty-five clients were said to have suffered damages assessed at nearly 200,000 francs. The prosecution laid great stress upon the fact that most of the dissipated assets had been placed in his hands during the year 1871, at a time when, it contended, he could no longer harbor any illusions regarding the state of his affairs. It pointed as well to ledger entries which, from January 1870 onward, bore no trace of certain remittances of cash or receipts of securities. The court report announces an enumeration of the sums entrusted and squandered, yet prints no detailed list. It notes the hearing of witnesses summoned to substantiate the charges, without preserving their testimony. The reader receives the overarching architecture of the accusation, not the verbatim transcript of the proceedings.
M. Legeard de la Dyriais, the advocate general, maintained the accusation. Maître Piou appeared for the defense. The correspondent does not summarize his speech; he passes directly to the brief rejoinders, the summing-up of the debates, and the jury, called upon to answer one hundred and ten questions. This journalistic restraint forbids attributing to Gauja, his counsel, or the witnesses arguments and utterances that the published report has not preserved. In these columns, the transactions, the figures, and the reported admission belong entirely to the indictment; the judicial scene closes upon the final outcome recorded by the Gazette.
The verdict returned affirmative on all counts of breach of trust and negative on the charge of bankruptcy. The court sentenced Gauja to three years’ imprisonment and a fine of one hundred francs. The article concludes upon the accused, deathly pale, well-nigh fainting. The figures had described the ruin of a brokerage house; the verdict, for its part, drew a line between the acts the jury held criminal and the statutory qualification of fraudulent bankruptcy it chose to dismiss. Between the two remained the fifty-five clients and the assets they still hoped to recover, while the journal, having recorded the sentence, tells us nothing of the ultimate fate of their claims.