CHAPTER X.
Curious Forgery.—Its Discovery.—Loan of 1796.—Its Management.—French Revolution and its Effect.—List of Subsidies to Foreign Powers.—Removal of Business from ’Change Alley.—Erection of the present Stock Exchange.—Loyalty Loan.—Preliminaries of Peace.—Its Effect.—Hoax on the Stock Exchange.—War renewed.—Great Fraud on the Jobbers.—Its Discovery.—Rights of Stock-brokers.
On the 2d of November, 1793, as Mr. Martin, broker of ’Change Alley, was occupied in his business, he was applied to by a young man of somewhat effeminate appearance and of good address, to sell £16,000 scrip. As Mr. Martin was explaining to the applicant that an introduction was necessary, a Mr. Lyons, also a member of the Alley, esteemed a reputable person, passed, and the young man, to remove Mr. Martin’s doubts, immediately pointed to Mr. Lyons, as thoroughly aware of his respectability. The latter, on being questioned, said he knew the stranger intimately, at the same time expressing his dissatisfaction at not being employed by him. The introduction was sufficient for Mr. Martin, and he sold that day £10,000 out of the £16,000 intrusted to his care. The seller, by some curious chance, or for some subtle reason, did not make his appearance to receive the proceeds, nor did he leave an address to which it might be sent. On the following morning, however, Mr. Martin received a visit from him at his private residence; but, on being informed that the whole of the stock was not sold, his demand for payment was delayed. The day on which the remainder of the scrip was disposed of was a holiday at the Bank, and from this simple circumstance arose the discovery of a curious fraud. The business at the Stock Exchange on public holidays is trifling, and the buyer, instead of hurriedly depositing the scrip in his pocketbook, had leisure to remark that there was some irregularity about it. Mr. Martin at once stepped over to the Bank, checked the document, and discovered the forgery.
The scheme to which this gentleman had so nearly fallen a prey was cunningly contrived. The effeminate applicant to Mr. Martin was the sister of Lyons, disguised in male attire,—Lyons having placed himself in the way at the proper moment to give the necessary character; and, had it not been for the chance circumstance alluded to, would have profited largely by the deceit. The scheme failed; Lyons was apprehended; and, rather than give his sister the affliction of appearing against him, he pleaded guilty; thus sacrificing the slight chance of life which remained, to spare the feelings of her whom he had betrayed into crime.
In 1796 a loan for eighteen millions was proposed. The usual inquiries were made by the interested parties, and the Chancellor of the Exchequer positively declared that it should be conducted upon principles of free and open competition. The day was appointed to arrange its preliminaries. Mr. Mellish, Mr. James Morgan, and Mr. Boyd, were competitors; and when they had assembled, Mr. Boyd requested a few words in private with the Chancellor. The request was granted; and the surprise of Messrs. Mellish and Morgan may be conceived, when the Chancellor, on returning, proposed, that, if the latter bid for the loan, Mr. Boyd should be at liberty to supersede them on paying half per cent. above the highest offer. This was decidedly and indignantly refused; and the Chancellor, without any other proposition, at once agreed to take the terms offered by Mr. Boyd, although it was fully understood by all that there should be no final settlement on that day. The real causes of this extraordinary proceeding are difficult to ascertain; but the excuse offered by the Chancellor was, that Boyd had some claim on government, in consideration of the previous loan not having entirely expired. Allowing this, the state had no right to remunerate Mr. Boyd at the expense of others; and as very little of the previous scrip remained in his possession, it was, whatever partisanship might allege in excuse, a gross dereliction of public duty, and a great misdirection of public interest, to allot a loan without competition, at a loss of £499,500 to the public. At any rate, the contract was notified as open, the Governor of the Bank was authorized to declare it so, and the Chancellor expressed no doubt upon the subject.
There was much comment at the time. There was also a curious story in circulation of bills to the amount of £700,000 having been drawn on the treasury in fictitious names, and with fictitious dates; and it was asserted that, when the loan was contracted, it was absolutely known by the Cabinet that the king’s speech would inevitably raise the funds, and add five per cent. to the gains of the contractor. Before the first payment, £2,160,000 was the profit on a contract for eighteen millions.
During the loans so frequently mentioned, it was curious to witness the bidders arising at early dawn; waiting from two until ten in the morning, and then see them rush, with all the eager impetuosity of gain, to grasp a share of the proffered good.
When it became known that, on the 12th of May, 1789, an insurrection had broken out at Paris, it was but little imagined that its effects would press upon the resources of England for ever, increase her taxation, and embarrass her councils; and as news came from time to time of the excesses of the mob, the destruction of the Bastille, and the murder of the monarch, it was received in accordance with the political principles of the listener.
The first effect of the revolution shook the state to its foundation. A strong democratic tendency passed through Europe, and England shared the peril. A feeling of public wrong was prevalent. A fierce movement convulsed the populace. Debating societies were established, and the misgovernment of the nation was exposed. The public-houses were filled with orators, and the cry for reform was incessant. The press teemed with warnings and appeals. Societies corresponding with the Jacobin clubs of Paris were established. Some of the first men in England welcomed the revolution with enthusiasm, while the masses hailed it with delight. The Convention was congratulated; and it is surprising that, with democratic principles, a democratic spirit, and a numerous array of men of rank on the popular side, England should have preserved her constitution.