August 15: The Panama Canal Scandal

The Panama Canal was used for the first time on this date in 1914. Construction on the Canal had originally been in the hands of Augustin Solomon, a French Jew who lost his concession from the Colombian government (which then owned the Isthmus of Panama) in part because, as one French official expressed it in a cable, “The keys of the world are here, but the name of Senor Solomon does not seem to be sufficiently Christian to qualify him for the role of guardian of Saint Peter’s.” Construction on the Canal was finally begun by France in the 1890s, but a scandal involving at least 104 bribed French government officials and losses of more than 1.8 billion francs for some 800,000 French investors wiped out French participation and left the project in American hands. The Panama Canal Scandal involved two German-born Jewish financiers, Baron Jacques Reinach and Cornelius Herz, who helped distribute bribe money. Edouard Drumont’s anti-Semitic newspaper, La Libre Parole, used this story as a battering ram against Jews, sowing the seeds for the Dreyfus Affair. Drumont “accused Baron Jacques de Reinach of being the Jewish hand behind the outrage. De Reinach eventually committed suicide under the barrage.... Not all the money taken out of the Panama Canal company’s account by Baron de Reinach went to bribe politicians. Some went to the mysterious Cornelius Herz, a medical charlatan who offered electrical cures for various diseases and bilked investors in the United States. Fleeing to France after one particularly lucrative con job, he befriended the rich and the powerful. He invested money in Georges Clemenceau’s newspaper, thereby becoming an intimate of the future French prime minister.” —Donald H. Harrison