The Sun.
London, England, 1841-12-23 00:00:00

THE EXCHEQUER BILLS FRAUD.
An able pamphlet on this mysterious subject has just
been published by A. IL Bailey and Co., of Cornhill,
and as it is of great importance to many thousands that
a conspiracy which has caused such excitement, and
which may be attended with disastrous consequence,
should be thoroughly investigated without delay, we
shall make no excuse for quoting largely from its columns.
The author properly observes at the commencement,
" that all which the public know with certainly is, that
to private individuals it has caused loss of money, to
the nation loss of credit, to the Government loss of
character, and to the public loss of confidence." After
adverting to the disappointment caused by the unex-
pected result of Smith's trial, and the escape of Rapallo,
he thus proceeds :
It was therefore a great object with the Government
to quash every proceeding against Rapallo, the fact
being, that they had not a shadow of a case against him;
they were perfectly aware that Smith's first statement of
having given the bills to him unsigned was false; and the
result has proved that it was, Smith having pleaded
" Guilty" to all the counts of the indictment.
But the anxiety of the public is to ascertain who signed
the bills. Smith's pleading " Guilty "by no means
makes it certain that he signed them ; indeed, every one
who has examined the figures, which he admitted to be
his, declare that they are not in the same hand-writing
as the signatures; and moreover, that the signatures on
the bills fraudulently issued are the same as those at-
tached to every other Exchequer bill in circulation.
The Government, however, by Smith having pleaded
guilty to the forgery, has effected two objocts.
lstly. They have prevented an • exposee of that gross
negligence which has been the cause of this fraud being
perpetrated on the public.
2ndly. They have placed the holders of the fraudulent
Exchequer bills at their mercy, because, were an action
brought against the Government, the case would be met
by the plea of admitted forgery, which would nonsuit the
plaintiffs
_ _

He then adds, that the public had no possible means
of guarding themselves against the fraud—nay, to the
utter disgrace of the officials at the Exchequer-bill
(Vice, the Government either would not, or could not,
distinguish the .false from the genuine bills.
Let us proceed, therefore, to examine the case in a
fair and impartial manner. The loss which has fallen
on the public has arisen from their having placed implicit
confidence in the vigilance of the Government and the in-
tegrity of its officers.

The public implicitly relied on being secured against
fraud by the following legal precautions, which are di-
rected to be observed at the Exchequer, viz. :
lstly. That no more paper would be manufactured
and printed than was actually required for the bills
voted by Parliament for the public service, the more es-
pecially as it is known that both the paper and the
printing are manufactured and executed under the roof
of the Exchequer, for the still greater security of the
public.

2dly. That the seal with which they are stamped
would be kept in the custody of three parties, and never
used except in their presence.
3dly. That no Exchequer bills would be signed except
at the Exchequer.
Is it the fault of the public that these precautions have
been neglected ? and could the fraud have taken place
if they had been observed ?
On the 22d of October last, three distinct parties, at
three distinct times, took up various bills to have them
examined ; these bills amounted to 25,0001. ; they were
all examined by different parties in the Exchequer, were
compared with the counterfoils, anti pronounced genuine.
16,0001. of these bills have been siuce received by the
Bank of England in payment for scrip, and the other
9,0001. are marked with the initials of an indifferent
part, who was present at the examination.
It can also be proved that 40,0001. other bills (now
the
eoncoleurnkcs of pronounced to
Eexchg
forgeries),euer wbuetrethnaot tmonr.l3 r, eerxcaimvailn,edb
com-
ing in at the time, was requested to examine the signa-
tures, and state whether he could reject any as being
foreign to his writing ; he turned them all carefully over
one by one, and said h could not.
These examinations (with one exception), took place,
be it remembered, after a slur had been thrown on Ex-
chequer bills, and they were consequently subjected to
the most minute examination.
The author thus describes the manner in which Smith
was detected, and naturally expresses some anxiety to
know what has become of the book containing the coun-
terfoils with which these bills were compared. On the
25th of October the following disclosures took place :
Duplicate numbers of Exchequer bills were brought
up to the Exchequer, one set belonging either to the
London and Westminster Bank, or to Messrs. Barclay
and Co., and the other to one of the brokers who had
received them from Rapallo. It was proved that the
bills held by the Bank had never been out of its posses-
sion, yet they were so exactly like the duplicates, both
in respect to figures and signature, that it was impossible
to distinguish the one from the other ; consequently the
Manager of the Bank, who was present, very acutely ob-
served, that as nobody out of doors could have had the
one bill from which to make a copy of the other, the
figures of both must have been filled in by one and the
same person. On this Mr. Smith became very agitated,
and requested to speak to Mr. Maule, the solicitor of the
Treasury, in a private room, when he made his confession.
It appears that all the bills surreptitiously issued are
running numbers, although deposited at various times.
Great importance is to be attached to this fact, as it
throws a glimmering of light as to the manner in which
the signatures of the bills have been obtained. It would
therefore be most satisfactory for the public to know in
what state the unissued bills are—whether signed or un-
signed, and whether the counterfoils are witnessed in
the same manner as those of every other book ; because,
if the bills are signed, and the counterfoils are wiinessed,
no other conclusion can be arrived at than that Smith
must have abused the confidence of Lord Monteagle and
Mr. Percival, by placing a book of Exchequer bills be-
fore them and that they signed it in the full reliance
that nothing would be so placed unless it were right
and proper.
He then contends that the holders of the bills could
not by any means distinguish between good and bad
bills, and as a proof states that persons of all classes of
the greatest experience, from the Directors of the Bank
of England to money brokers, advanced money on them
for these very good reasons, that the paper, the print-
ing, the stamp, and the figures were the same as every
ether Exchequer bill in circulation. The fraud, it ap-
pears, commenced in 1836, soon after Sir John Newport
became Comptroller, and great losses since that period,
he infers, must have occurred. But let not (says he)
the public delude themselves with the notion, that be-
cause the brokers who have raised the money have deli-
vered large quantities of Stock to Solari and Rapallo,
that that Stock may riot have been disposed of, and that
large losses may not have occurred. Those who are
acquainted with the nature of Stock transactions, and
who have unfortunately dabbled in shares, can easily
imagine that 300,0001. has been sunk during the space of
five years ; and from the best information that can be
gathered, it seems that every share they dealt in is now
utterly without value. Take British Iron shares, for
instance, which Smith mentions as having speculated in
before the Chancellor's decision : these shares were then
between 401. and 501. per share ; they are now worth
nothing—and worse than nothing. This one speculation
may be but as a sample of the rest ; and when to such
speculations is added the loss sustained in interest alone,
the manner in which the money is gone ceases to be
marvellous.

However it may disappoint public curiosity, which is
led to believe that there are some powerful delinquents
behind the scenes, it may be observed, that utterly de-
void of truth as Smith's statements are, the more especi-
ally as to issuing the bills unsigned, and to his never
having received any part of the moneys raised on them,
still from his own statements may be gathered the most
reasonable explanation of the whole fraud.
Let us now turn to that part of the case by far the
most interesting to the public, viz., what is to be the
future fate of the unfortunate holders of the bills.
It is almost impossible to imagine that the Govern-
ment, composed as it is of souse of the most honourable
and high-minded men in the kingdom, can do otherwise
than recommend the payment of the bills when Parlia-
ment meets. But the manner in which the trial has been
conducted, stifling as it has every fact favourable to the
holders of the bills, and placing them, so far as legal re-
dress goes, at the mercy of Government, shakes the con-
fidence of the public as to their future intentions.
It behoves then the holders of the bills to remember
that " union is strength." Let them in the first place
memorialise the Treasury, and respectfully request to
know their decision in regard to the impounded bills. If
they are wise they will not be satisfied with any. eva-
sive answer, for if the battle of "right against might"
is to be fought, they must be prepared to take the
field before the March bills are called in and the new
ones issued.

The Bank of England should be foremost in support-
ing the cause of the holders ; for, it is stated that, on
the 21st of October upwards of 57,0001. of the bills said
to be forged were redeemed from the Bank, by monies
raised from the present holders.
The Bank of England can come forward with a pecu-
liar grace in support of the public, and cite its own con-
duct under nearly similar circumstances : viz., some
Bank clerks once obtained possession of several bank
notes, which were perfect in every respect save the signa••
ture ; the signature they forged, and issued the notes to
the public. What was the conduct of the Bank on the
occasion ? They justly said, how were the public to
know that the notes were forgeries, when they are the
same in every respect as every other bank note in circu-
lation, and it is the general appearance of the note,
and not the signature, which the public trust.. The
Bank, therefore, hanged the delinquents, but they paid
the notes.

After adding that the East India Company and other
moneyed interests should press on Government the pay-
ment of these bills, the writer thus concludes :
The public very justly ask—Who appointed the offi-
cers of the Exchequer, through whose neglect this fraud
has occurred? Who ordered more Exchequer bills to be
manufactured and printed* than were necessary for the
public service? Who filled in the numbers of the Ex-
chequer bills? Whd stamped them? Who issued them?
Who signed Exchequer bills in other places than at the
Exchequer-office, thereby (however unconsciously) giv-
ing facilities to this fraud being effected? The answer
to all these questions is—the Government, or those ap-
pointed by the Government. The rejoinder of the pub-
lic then is—that the Government must pay them.
The foregoing observations are submitted to the con-
sideration of every candid mind; their object is to prove
that the fraud could never have occurred if due caution
had been observed on the part of the Government; and
that from the circumstance of the fraud centering in the
individual selected by Government to fill the important
post of Chief Issuing Clerk of the Exchequer, it was mo-
rally impossible for the public to guard against, or to
detect it.

There are upwards of 6,000 persons now re-
ceiving parochial relief in St. Maryleboune.