Old and New London, Volume I / A Narrative of Its History, Its People, and Its Places

by Walter Thornbury

One of the most extraordinary Stock Exchange conspiracies ever devised was that carried out by De Berenger and Cochrane Johnstone in 1814. It was a time when Bonaparte's military operations against the allies had depressed the funds, and great national anxiety prevailed. The conspiracy was dramatically carried out. On the 21st of February, 1824, about one a.m., a violent knocking was heard at the door of the "Ship Inn," then the principal hotel of Dover. On the door being opened, a person in richly embroidered scarlet uniform, wet with spray, announced himself as Lieutenant-Colonel De Bourg, aide-de-camp of Lord Cathcart. He had a star and silver medals on his breast, and wore a dark fur travelling cap, banded with gold. He said he had been brought over by a French vessel from Calais, the master of which, afraid of touching at Dover, had landed him about two miles off, along the coast. He was the bearer of important news—the allies had gained a great victory and had entered Paris. Bonaparte had been overtaken by a detachment of Sachen's Cossacks, who had slain and cut him into a thousand pieces. General Platoff had saved Paris from being reduced to ashes. The white cockade was worn everywhere, and an immediate peace was now certain. He immediately ordered out a post-chaise and four, but first wrote the news to Admiral Foley, the port-admiral at Deal. The letter reached the admiral about four a.m., but the morning proving foggy, the telegraph would not work. Off dashed De Bourg (really De Berenger, an adventurer, afterwards a livery-stable keeper), throwing napoleons to the post-boys every time he changed horses. At Bexley Heath, finding the telegraph could not have worked, he moderated his pace and spread the news of the Cossacks fighting for Napoleon's body. At the Marsh Gate, Lambeth, he entered a hackney coach, telling the post-boys to spread the news on their return. By a little after ten, the rumours reached the Stock Exchange, and the funds rose; but on its being found that the Lord Mayor had had no intelligence, they soon went down again.

In the meantime other artful confederates were at work. The same day, about an hour before daylight, two men, dressed as foreigners, landed from a six-oar galley, and called on a gentleman of Northfleet, and handed him a letter from an old friend, begging him to take the bearers to London, as they had great public news to communicate; they were accordingly taken. About twelve or one the same afternoon, three persons (two of whom were dressed as French officers) drove slowly over London Bridge in a post-chaise, the horses of which were bedecked with laurel. The officers scattered billets to the crowd, announcing the death of Napoleon and the fall of Paris. They then paraded through Cheapside and Fleet Street, passed over Blackfriars Bridge, drove rapidly to the Marsh Gate, Lambeth, got out, changed their cocked hats for round ones, and disappeared as De Bourg had done.

The funds once more rose, and long bargains were made; but still some doubt was felt by the less sanguine, as the ministers as yet denied all knowledge of the news. Hour after hour passed by, and the certainty of the falsity of the news gradually developed itself. "To these scenes of joy," says a witness, "and of greedy expectations of gain, succeeded, in a few hours, disappointment and shame at having been gulled, the clenching of fists, the grinding of teeth, the tearing of hair, all the outward and visible signs of those inward commotions of disappointed avarice in some, consciousness of ruin in others, and in all boiling revenge." A committee was appointed by the Stock Exchange to track out the conspiracy, as on the two days before Consols and Omnium, to the amount of £826,000, had been purchased by persons implicated. Because one of the gang had for a blind called on the celebrated Lord Cochrane, and because a relation of his engaged in the affair had purchased Consols for him, that he might unconsciously benefit by the fraud, the Tories, eager to destroy a bitter political enemy, concentrated all their rage on as high-minded, pure, and chivalrous a man as ever trod a frigate's deck. He was tried June 21, 1817, at the Court of Queen's Bench, fined £1,000, and sentenced ignominiously to stand one hour in the pillory. This latter part of his sentence the Government was, however, afraid to carry out, as Sir Francis Burdett had declared that if it was done, he would stand beside his friend on the scaffold of shame. To crown all, Cochrane's political enemies had him stripped of his knighthood, and the escutcheon of his order disgracefully kicked down the steps of the chapel in Westminster Abbey. For some years this true successor of Nelson remained a branded exile, devoting his courage to the cause of universal liberty, lost to the country which he loved so much. In his old age tardy justice restored to him his unsoiled coronet, and finally awarded him a grave among her heroes.

The ticket pocketing of 1821 is thus described by the author of "An Exposé of the Mysteries of the Stock Exchange:"—"Of all the tricks," he says, "practised against Goldschmidt, the ticket pocketing scheme was, perhaps, the most iniquitous: it was to prevent the buying in on a settling day the balance of the account, and to defeat the consequent rise, thereby making the real bear a fictitious bull account. To give the reader a conception of this, and of the practices as well as the interior of the Stock Exchange, the following attempted delineation is submitted:—The doors open before ten, and at the minute of ten the spirit-stirring rattle grates to action. Consols are, suppose, 69 to 69-1/8—that is, buyers at the lower and sellers at the higher price. Trifling manœuvres and puffing up till twelve, as neither party wish the Government broker to buy under the highest price; the sinking-fund purchaser being the point of diurnal altitude, as the period before a loan is the annually depressed point of price, when the Stock Exchange have the orbit of these revolutions under their own control.

"At twelve the broker mounts the rostrum and opens: 'Gentlemen, I am a buyer of £60,000 Consols for Government, at 69.' 'At 1/8th, sir,' the jobbers resound; 'ten thousand of me—five of me—two of me,' holding up as many fingers. Nathan, Goldschmidt's agent, says, 'You may have them all of me at your own bidding, 69.' In ten minutes this commission is earned from the public, and this state sinking-fund joint stock jobbed. Nathan is hustled, his hat and wig thrown upon the commissioner's sounding-board, and he must stand bareheaded until the porter can bring a ladder to get it down. Out squalls a ticket-carrier, 'Done at 7/8;' again, 'At 3/4, all a-going;' and the contractors must go, too; they have served the commissioners at 69, when the market was full one-eighth. All must come to market before next omnium payment; they cannot keep it up (yet this operation might have suited the positions of the market). Nathan cries out, 'Where done at 3/4ths?' 'Here—there, there, there!' Mr. Doubleface, going out at the door, meets Mr. Ambush, a brother bear, with a wink, 'Sir, they are 3/4ths, I believe, sellers; you may have £2,000 thereat, and £10,000 at 5/8ths.' This is called fiddling: it is allowable to jobbers thus to bring the turn to 1/16th, or a 32nd, but not to brokers, as thereby the public would not be fleeced 1/8th, to the house benefit. 'Sir, I would not take them at 1/4th,' replies Mr. Ambush. 'Offered at 3/4ths and 5/8ths,' bawls out an urchin scout, holding up his face to the ceiling, that by the re-echo his spot may not be discovered."

The system of business at the Stock Exchange is thus described by an accomplished writer on the subject: "Bargains are made in the presence of a third person. The terms are simply entered in a pocket-book, but are checked the next day; and the jobber's clerk (also a member of the house) pays or receives the money, and sees that the securities are correct. There are but three or four dealers in Exchequer bills. Most members of the Stock Exchange keep their money in convertible securities, so that it can be changed from hand to hand almost at a moment's notice. The brokers execute the orders of bankers, merchants, and private individuals; and the jobbers are the persons with whom they deal. When the broker appears in the market, he is at once surrounded by eager jobbers. One of the cries of the Stock Exchange is, 'Borrow money? borrow money?'—a singular cry to general apprehension, but it of course implies that the credit of the borrower must be first-rate, or his security of the most satisfactory nature, and that it is not the principal who goes into the market, but only the principal's broker. 'Have you money to lend to-day?' is a startling question often asked with perfect nonchalance in the Stock Exchange. If the answer is 'Yes,' the borrower says, 'I want £10,000 or £20,000.'—'At what security?' is the vital question that soon follows.

"Another mode of doing business is to conceal the object of the borrower or lender, who asks, 'What are Exchequer?' The answer may be, 'Forty and forty-two.' That is, the party addressed will buy £1,000 at 40 shillings, and sell £1,000 at 42 shillings. The jobbers cluster round the broker, who perhaps says, 'I must have a price in £5,000.' If it suits them, they will say, 'Five with me,' 'Five with me,' 'Five with me,' making fifteen; or they will say, 'Ten with me;' and it is the broker's business to get these parties pledged to buy of him at 40, or to sell to him at 42, they not knowing whether he is a buyer or a seller. The broker then declares his purpose, saying, for example, 'Gentlemen, I sell to you £20,000 at 40;' and the sum is then apportioned among them. If the money were wanted only for a month, and the Exchequer market remained the same during the time, the buyer would have to give 42 in the market for what he sold at 40, being the difference between the buying and the selling price, besides which he would have to pay the broker 1s. per cent. commission on the sale, and 1s. per cent. on the purchase, again on the bills, which would make altogether 4s. per cent. If the object of the broker be to buy Consols, the jobber offers to buy his £10,000 at 96, or to sell him that amount at 96-1/8, without being at all aware which he is engaging himself to do. The same person may not know on any particular day whether he will be a borrower or a lender. If he has sold stock, and has not re-purchased about one or two o'clock in the day, he would be a lender of money; but if he has bought stock, and not sold, he would be a borrower. Immense sums are lent on condition of being recalled on the short notice of a few hours."

The uninitiated wonder that any man should borrow £10,000 or £20,000 for a day, or at most a fortnight, when it is liable to be called for at the shortest notice. The directors of a railway company, instead of locking up their money, send the £12,000 or £14,000 a week to a broker, to be lent on proper securities. Persons who pay large duties to Government at fixed periods, lend the sums for a week or two. A person intending to lay out his capital in mortgage or real property, lends out the sum till he meets with a suitable offer. The great bankers lend their surplus cash on the Stock Exchange. A jobber, at the close of the day, will lend his money at 1 per cent., rather than not employ it at all. The extraordinary fluctuations in the rate of interest even in a single day are a great temptation to the money-lender to resort to the Stock Exchange. "Instances have occurred," says our authority, "when in the morning everybody has been anxious to lend money at 4 per cent., when about two o'clock money has become so scarce that it could with difficulty be borrowed at 10 per cent. If the price of Consols be low, persons who are desirous of raising money will give a high rate of interest rather than sell stock."

The famous Pop-gun Plot was generally supposed to have been a Stock Exchange trick. A writer on stockbroking says: "The Pop-gun Plot, in Palace Yard, on a memorable occasion of the King going to the Parliament House, was never understood or traced home. It is said to have originated in a Stock Exchange hoax. 'Popgun John' was at the time a low republican in the Stock Exchange, and had a house in or near Palace Yard, from which a missile had been projected. He subsequently grew rich."