The Sun.
London, England, 1842-08-20 00:00:00

(which is rarely the case), they pass by mere
very; like a bank note, the title* of a person.who gives
valuable consideration for them,: without notice or
suspicion of fraud, is complete, although they should
have been fraudulently obtained by the party from
whom he receives theni...
The bills.. of each successive issue are numbered in
regular prOgression, and in no instance are there two
in the same issue which bear the same number. They
are also signed with the ',name of the Comptroller
General of the .Exchequer (though th‘ft signature
might, by the established custom which prevailed at
the time of the fraud in question, be subsCribed either
by himself or by the Deputy COmptroller-General) ;
and as the principal check against forgery, it is the
practice ipr.issuing these instruments always to cut
them from a counterfoil by comparison with' which
their genuineness may at any time be ascertained. .
The bills which are the subject of our inquiry
under the Act of Parliament (being 377 in number,
of which 365 are in the schedule to the Act itself and
12 have been referred to us since the Act passed) all
purport to-be bills of the description above stated, and
all emanated through E: ,Rapallo from Beaumont
Smith. .The former' is . a foreigner, but was long
resident in this country, 'and during that period, viz.,
from the' spring of 1836 to the middle of 1.841, was in
the habit of receiving from, Smith (then senior clerk
in the Issuing Office of thei. Exchequer) instruments
purporting to be Exchequer bills, for the purpose of
raising money upon them. The bills now the sub •
ject of inquiry are of. the number of those so received,
and, being among the later issues, were still in circu-
lation at the time of the discovery of the fraud ; the
remainder having (as it would seem) been all de-
stroyed (after they had served their purpose) by the
Parties who issued them.
The bills so received from Smith were all (as con-
fessed by him after his apprehension) forged ; and
upon his indictment for the forgery of some of them,
he pleaded guilty to the charge, was convicted, and
has since undergone the ,punishment of transporta-
tion. With
,respect to the particular bills now the
subject of inquiry (though, as 'already observed, we
have no direct concern with the point of forgery), it
may be proper to add, that all those enumerated in
the schedule to the Act of Parliament, as detained at
' the Exchequer, and alio' those which have been
ferred to us since the Act passed, have been eom.-i,
pared with the counterfoils, and found not to coin-
cide with them ; that the Comptroller-General has
also inspected the whole of the former class, and. the
late Deputy Comptroller a large number, and that
both these officers have, on their examination before
us, declared the signature not to be theirs.
The bills now the subject of inquiry all purport to
be of the issues of March and June, 1841, and are
made out, in every case, for the sum of 1,0001., They
are, as to the paper, stamp, and every other particu-
lar, genuine, with the exception only of the signature,
and that is, in every instance, an imitation, more or
less successful, of the signature of the late Deputy-
Comptroller-General. We may stop, therefore, to re-
mark here, that it was almost impossible that any of
those instruments should have awakened (so far as their
external appearance was concerned) the suspicion of
those to whom they were offered. We are directed by
the Act of Parliament to report "whether the holders
employed any and what means of inquiry into the
genuineness of such documents :" and in obedience
to this, we may here take occasion to state, that
though, when suspicion arose from collateral circum-
stances, the documents were in several instances- car-
ried up to the Exchequer. for examination about the
time of the discovery of the fraud, . yet in other
cases (no suspicion heir)? excited) the holders em-
ployed no means of inquiry into genuineness beyond
that cursory inspection which was usual on receiving
an Exchequer bill. On the other hand, however, no
inspection, though of the closest kind, would, in our
opinion, have had any tendency to excite doubt as to
the genuineness of the document.
Each of the bills in question is also a duplicate,
-agreeing in number, as well as other particulars; with
some other bill; which last has, in many instances,
been compared with the counterfoil, and in every such
instance has been found to coincide. All the other
bills received from Smith were also (as there is ground
to believe) duplicates • and the reason for so manag-
ing the forgery. is evident, for an instrument bearing
a wrong number was likely to encounter immediate
detection, while, on the other hand, the danger of the
alternative plan arose only in the event of duplicates
happening to come into possesion of the same party.
There were, however, other precautions to which
it was equally necessary for the contrivers of the fraud
to attend. In raising money on'these instruments it
was essential to abstain from sale ; because, when
thus brought into general circulation, there would
not only be a great risk of their falling into the hands
of persons' who had duplicates, but there was a
certainty of their being carried at the regular
periods of exchange to the office of the pay-
masters, where the duplicates also would
_of course
make their appearance, and lead infallibly to detection.
The plan adopted, therefore, was to raise the money
in every case by the deposit of the bill upon loan,
and before the next period of exchange came round
to redeem it by payment of the money, or to sub-
stitute for it another forged bill of more recent date.
This method, it is true, made it necessary to 'repay in
every case (sooner or later) the amount of the money
procured, as well as to pay the interest due upon the
loan ; but the advantage in the meantime derived was ,
the present use of large sums of money, which the
confederates endeavoured to employ with advantage
in extensive speculations in the stock market,
actuated, probably, by the hope of realising (after the
repayment of every loan) large fortunes in the result.
In carrying this scheme into effect, the mode of
operation was as follows :—At the commencement of
the transactions, and for some years afterwards, Ra-
pallo delivered over the bills received from B.' Smith
to 'Angelo Solari, another foreigner, resident in this
country,'between whom and .Rapallo there had ex-
isted long previously some connexions ; and Solari
performed the service of raising money upon the bills.
This he effected in part' through connections formed
by the assistance of Messrs. 'William and James
Morgan, stockbrokers. They introduced him (at a
time when• their own acquaintance with him, accord-
ing to their evidence, was • but slight and recent)
to the banking houses of Messrs. Ransom and Com-
pany, and Jones, Loyd and Company; and from
the former he obtained large sums of money from
time to time on the deposit of bills purporting to be
Exchequer bills,-but which, in fact, had been received
from Smith. He obtained, besides, similar loans
from Messrs. Price and Co., bankers, but the precise
medium of his introduction to them does not appear.
He formed, also about the same period, a connection
with Messrs. 'William and James Morgan them-
selves, in the course of which he obtained, through
their agency as brokers, very numerous, frequent,
and large advances, the dates and amounts of which,
and the average rates of 'interest charged by the len-
ders (exclusive of any commission to Messrs. 'W. and
J. Morgan), are set forth in the account, pp. 315 to
321. The nature of those dealings (which are explained
at large in the evidence of Mr. W. Morgan, Mr
E. Morgan, and Mr. Cook (pp. 339 to 355) may be
compendiously stated as follows :—Solari brought
them from time to time instruments purporting to be
Exchequer bills (but, in fact, received from Smith);
and on the deposit of these in their own names, as the
apparent borrowers (according to the usual custom of
stockbrokers employed to procure loans), they ob-
tained large sums of money, out of which, as from
time to time directed by Solari, they purchased for
him foreign bonds or shares, or paid losses incurred by
him in the stock market.' They also from
time' to time, paid over to him large sums
of money, and paid off the principal and
interest which became due on the loans ; and
received from him, on the other hand, large sums of
money, and, sold foreign bonds for him, and credited
the same in his account. For these Services they
charged the usual commission or brokerage, so far as
the stock transactions were concerned,
and were en-
titled by agreement, as Mr. W. Morgan asserts, to
have al.() received a commission on the loans ; but
this latter commission was, in point of fact, never
charged or paid, owing, as he alleges, to a laxity' in
the mode of carrying on * the account. the
dealings lasted until the death of Solari, which
took plane in October, 1840, after which Rapallo
himself (who had previously done business. with
Messrs. W. and J. Morgan for some time as Solari's
deputy during his illness) was introduced to them by
his widow and executrix
.as her friend, whom ,she
wished to continue the transactions carried on by her
husband ; and between Rapallo, as her agent, and
Messrs. W. and J. Morgan, the same course of deal-
ing was from that time accordingly purSued that has
been already described in relation to Solari, and it
terminated only on the public discovery of the fraud,
which took fhi-Ce, as hereafter more particularly
stated, in October 1841. During the whole of these
transactions with Solari and Rapallo, Messrs. W. and
J. Morgan profess theniselves to have had no know-
ledge whatever (beyond the slight introduction of
Solari above noticed) of the mode of life, property,
or connections, of either of these parties, and to
have received no specific account from them of the
person or persons for whom they were acting ;
though it is stated by Mr. W. Morgan that he was
told at the outset by Solari that "he had friend
who was a large capitalist, and who would lend him'
meas."- They also admit that they were never em-
ployed anther' by Solari or Rapallo to buy or to sell
an Exchequer bill and allege that they themselves
it.ved the whole of the 'bills on which the loans
belong.t to_ the rich friend of whom
hu of whose name they were
apoken, .
statement,
of course,
never informed. This latter
were Solar.
also believed the confidence reposed
implies that they.
in Solari by his rich friend to have been transferred,
upon his death, to his Wiclow ; fgr g. TRY profess to
have considered Rapallo as having alwip WO in
the' capacity of her agent only, .
iobhtaaidnL,l„to
Messrs. IV. and J. Morgan, howevor, were not the
only parties with whom Solari and Rapallo d carried on