Cornelius Herz

Cornelius Herz: The Electrician at the Centre of the Panama Scandal

On 20 November 1892 Baron Jacques de Reinach was found dead in Paris. The financier had spent the previous evening in a desperate round of visits, and his death — recorded as suicide — detonated the largest corruption scandal of the French Third Republic. Within days a naturalised American physician and electrical entrepreneur named Cornelius Herz had left France for a hotel in Bournemouth. He never returned. What he was actually guilty of has been argued over for more than a century, and the argument is not settled.

Besançon to New York

Herz was born in Besançon in September 1845 to German-Jewish parents, Leopold Herz and Adelaide Friedmann, who had come from Hesse. In 1848 the family emigrated to America, settled in New York, and were naturalised by 1853. He entered the City College of New York in 1858, served as a lieutenant in the U.S. Army in 1861, and graduated with honours in 1864 with a bachelor's and a master's degree. He then studied at Heidelberg, at the University of Paris, and at the Paris School of Medicine.

The Franco-Prussian War found him in France. He served as a surgeon-major under General Antoine Chanzy and was made a Knight of the Legion of Honour in January 1871, then took a post at the maritime hospital at Berck-sur-Mer. He was back in America by the autumn of 1871, arriving in Chicago in time for the Great Fire and directing medical reconstruction work. In 1872 he became chief medical officer of Mount Sinai Hospital in New York. He married Bianca Saroni in Boston in 1873, moved to San Francisco, joined the Board of Health and specialised in nervous diseases.

The Electrical Years

This is the part of Herz's life that his notoriety has almost entirely erased. He founded the California Electrical Works, and in September 1877 signed an agreement with Thomas Edison, George Prescott and Stephen Field concerning European rights to the quadruplex telegraph patent — the invention that allowed four messages to travel simultaneously on a single wire.

He then moved to Paris with Bianca and their two daughters and became a central organiser of the French electrical industry at the moment of its birth. He founded the Electric-Force Transmission Company on Marcel Deprez's patents, and by the account of Sir Edward James Reed, writing in the *Fortnightly Review* in 1897, "In 1878 Cornelius created and was elected President of the well-known French syndicate of electricity." He was a champion of the 1881 International Exposition of Electricity in Paris — the event that introduced electric light to mass European attention. He founded two scientific journals, *La Lumière Électrique* and the *Journal d'Électricité*, and with the major Paris banks and the Rothschilds established electrical and telecommunications companies, among them a venture to run state telephonic and telegraphic trunk lines connecting France's 36,000 communes at half a penny per word.

The honours followed: Officer of the Legion of Honour in 1878; appointment by President Garfield as the United States representative to the 1881 International Congress of Electricians; Commander in 1881; Grand Officer in 1886; and from King Umberto I of Italy, the Grand Cross of the Order of Saints Maurice and Lazarus.

Panama

The Compagnie universelle du canal interocéanique de Panama, Ferdinand de Lesseps's attempt to repeat Suez in Central America, ran into financial crisis in 1888 and sought parliamentary authorisation for a lottery loan. The company collapsed in early 1889, and the subsequent investigation alleged that more than 150 parliamentarians had taken bribes to support the authorisation. Britannica identifies the key figures in the bribery scheme as Reinach, together with two intermediaries, Léopold Arton and Cornélius Herz, who fled the country. Charles Baïhaut, a former public works minister, admitted taking payments and received five years in 1893; most of the other implicated deputies were acquitted for want of evidence. Émile Loubet's government fell in November 1892.

Herz was wintering in England when the scandal broke. He returned to France, then left for the Tankerville Hotel in Bournemouth after Reinach's death. It was widely suspected that he held evidence against prominent politicians and financiers — which, if true, gave many powerful people an interest in his silence.

The charge eventually pressed against him was extortion from Reinach. Reed, in his 1897 defence, called it "a charge which was never adduced by the Baron himself in his lifetime and had no visible foundation in law or in fact," and alleged that the French state struck Herz from the rolls of the Legion of Honour without a hearing, suppressed evidence on technicalities, froze his assets and pursued extradition through the English courts while the press denounced him as a traitor, a spy in English pay, an incendiary and a murderer. That account is Herz's advocate speaking, and should be read as such. What is agreed is that Herz resisted extradition on grounds of terminal illness and remained in Bournemouth until his death on 6 July 1898.

Georges Clemenceau, whose friendship with Herz was notorious, was accused of taking British money, lost his parliamentary seat in 1893 and withdrew from politics for years. He blamed Herz for it. The scandal also became a major weapon for the enemies of the Republic, and the prominence of Jewish financiers in the affair was exploited relentlessly by the antisemitic press — the same current that would break out fully in the Dreyfus case two years later.

Why Cornelius Is Called a Genius

Herz's defenders and prosecutors agree on almost nothing, but they need not disagree about his abilities. Before Panama, he had built a substantial career at the intersection of medicine, electrical engineering and finance: a New York medical degree, a battlefield decoration, a hospital directorship, then a patent agreement with Edison and the presidency of the French electrical syndicate at the industry's founding moment. He launched two technical journals and organised companies with Rothschild backing to wire an entire country. To arrive in Paris as an American immigrant in 1877 and become, within a year, the organising figure of French electricity required an unusual combination of technical literacy, financial fluency and social nerve.

That last quality is where the case turns. Herz's talent was for standing at the junction between a new technology and the capital and political permissions it required — and that is precisely the position from which one can either build an industry or corrupt a parliament, using the same skills. Whether he did the second is unresolved. Britannica records him as an intermediary in the bribery scheme who fled; Reed maintained the charges were baseless and that France withdrew them, and reported that Herz was completely exonerated in 1906, eight years after his death. Neither account can simply be adopted.

What can honestly be said is this: the ability the sources demonstrate is brokerage — the assembling of technologists, bankers, ministers and journalists into arrangements that did not previously exist. In the electrical industry it produced real infrastructure. In the Panama affair, whatever his role, it produced a catastrophe. It is not an intellect one can safely admire without qualification, and the word genius, applied here, describes a capability rather than confers a verdict.

Legacy

The Panama scandal outlasted every individual in it, becoming shorthand in French for systemic political corruption. Herz died in an English seaside hotel, struck from the Legion of Honour he had climbed to Grand Officer, remembered as a fugitive rather than as the man who helped organise the electrification of France. Wellcome Collection holds watercolours from around 1897 satirising his Bournemouth exile — a physician taking his pulse, a newspaper announcing his pursuit. It is a strange monument: the last widely circulated images of the man are cartoons of him pretending to be ill.

Achievements

• Knight of the Legion of Honour