The Sun.
London, England, 1842-09-01 00:00:00

allowed by the borrowers to remain current, .
regard to the rate of interest charged upon than
compared with the rate of interest charged on the
chequer bills themselves.
These periods will also appear, from the talr
statements before referred to, and the considerat
that they suggest (a consideration aglicable in st
measure to the accounts of both parties in question.
that it was more for the interest of the borrov,.
th have sold his Exchequer bills in he first
stance than to have raised money upon loan, and tl
his constantly abstaining from sale was th,lrefore
circumstance calculated (after a time) to extite
tention. This position may be illustrated a 4 fc, flow:
•Assuming the Exchequer bills to bear hams 'st,
2-1-d. per cent. per diem (which was the rate as kla.
those now in question) a l "i'•l/
cent. upon them of 5 -1/
cent. p?r annum, implies a less of more than Id. p.
cent. per diem, in respect of difference of interest, •
But Vie expense of selling Exchequer bills (mat
they are always marketable) is only Is. per cent.
conunLsion, to which on repurchase
(supposing
the market to remain the same) is onlyto be
added another Is. per cent. fur commission, anti
2s. per cent. for the difliwence bef een the buying
and selling price, making altogether 4s. per cent.
-w
So that under the circumstances su,vo3ed, the
progressive loss on the loan would, after
i'6l-ty-eight
days or seven weeks, more than countervail fleewhole
expense of sale and repurchase ; and supposing
the loan
to continue from first-to last for six months, O. " sur-
plus of loss would amount to 11 s. per cent. Nt. ' fair
motive, therefore, can in general be suggested for re-
ferring a deposit to a sale, when the period of loan C. '-
eeeds seven weeks, and the rate of interest is as inuel'•
as five cont.,,unless it be supposed that on the parti-
cular occasion, the borrower may be speculating upon
a rise of premium, during the loan, which woul,ll.
oblige him in case of sale to repurchase at a loss, but
‘vill remunerate him in the case of loan for the dif-
ference of interest, and perhaps yield a profit besides.
But such a motive as this cannot be supposed where
there are frequent transactions extending through a
long period of time.
171"1 the question, however, how fits such a mode
of dealing may be reasonably expected to excite sus-
picion in the mind of the lender, considerable differ-
ence of opinion seems to prevail among the Nvitnesses
whom we have examined, and the evidence semis to
lead to the conclusion that it must be a ease very-
strongly marked, and more so, perhaps, than either-
of those now in discussion, which would be likely
to arouse the attention of a lender of ordinary
vigilance. Q. 6,300-7,74.5, 3,561-3,563, 3,498-
3,506, 3,217, 4,151-4,155. In reference to this
subject, too, Mr. lichens has again been able to give
proof of parallel cases occurring in his own business,
in which parties not concerned with the bills whkch
are the subject of our inquiry, borrowed money of
him on the deposit of. stock or Exchequer bills for
long p Hods of time, at the rate of 4i or 5 per cent.
Upon the whole, therefore, we think that no great:
weight can be attached in the case of either of the,
parties before named, to time • consideration thirdly
above adverted to, and that the evidence before us is
not such as to justify an imputation against either of
them on this, or any other ground, of want of proper
caution in their dealings.
CLASS II [.—As to the third class, consisting of Messrs.
Ransom and Co., Messrs. Price and Co.' Mr. John Wray
Scott, Mr. 11. Tomkins, and Mr. L. Levy, we also find
them upon the evidence to have become respectively the
holders of the bills with which they are connected in the
usual course of business, and without knowledge or sus-
picion that they were other than genuine, or had been
improperly obtained by any person whatever. But cir-
cumstances exist in the case of all these parties,
which appear to us to occasion more difficulty upon the
question with regard to want of proper caution, than
arises with respect to the second class; nod we feel too
much doubt upon that question as concerns the class
now under consideration, to be able to submit to your
Majesty any opinion of our own upon the subject.
The points of remark which occur with respect tot
the individuals of this cliss respectively are as follow :
1. As regards Messrs. Ransom and Co., and Messrs.
Price and Co., it is to be observed that the deposits
made with them are of the same general character in
point of number, frequency, and amount as with the
parties in the second class, but subject to this sub-
stantial difference, that the advances to secure which
these deposits were given, were not made to a broker,
but to Solari, a person of whose condition or pursuits
little was known, and who, though representing him-
self in the case of Messrs. and Co. to be act-
ing chiefly for another party, kept the name of that
party constantly concealed ; and after the death of
Solari they were made (in the case of Messrs. Price - •
and Co.) to Rapallo, to whom the suspicion that time .•
•
dealings of Solari might naturally tend to excite ought
as naturally to have been transferred. The loss oc-
casioned by deposit in reference to sale is also more
strongly exemplified in the accounts of both these
parties than in those of Class 11. An occasional charge
of interest at 6 and 7 per cent. also occurs in the case
of Messrs. Ransom and Co. during the year 1840.
The occurrence, however, is but rare ; and they have
proved on the evidence of Mr. lichens, that times,
charges did not exceed what was charged at the time
by the house of Messrs. P. and W. lichens and Har-
rison.

2. As regards Mr. John Wray Scott and Mr.
Tonikins, it appears to us that as far as tllO,O circum-
stances are concerned which relate,to thL c::tent of
the deposits and the loss sustained by the borrower,
from having recourse to deposit instead of sal:‘, they
are substantially in the same position as the parties in
the second class ; but we think it right. nevertheless,
to point out, that during a continued course of dealing
(which comprised, in the case of' Mr. Seott, nearly
two years, and in the case of Mr. 'l'►nnkins ten
months), there are very numerous instances of interest
paid to them at per cent., and that for very con-
siderable periods of time together, as will appear
more fully upon the tables exhibited by them. The
difference between this and 5 per cent. was the
remuneration payable to themselves as brokers,
and it might naturally have occurred to them
that as Mr. De Berckem, the party with whom
they were dealing, was a broker, he would
probably charge in turn (as, iu fact, he did)
6 per cent. in every one of these instances to
his principal ; and there can be no doubt, upon the
evidence; that six per cent. upon the deposit of Ex-
chequer Bills, for periods of such duration, was beyond
the common rate of interest in the money market. As
the point, however, to which we are now directing
attention, is, in our judgment, only so fair material as
it may tend to raise the question whether these parties
exercised the caution that might reasonably have
been expected from them, it is right. in reference to
that question, to remark that they are both young
men, and that neither of them has been many years
in business on his own account.

3. As regards Mr. Levy, also, we feel it our duty
to observe, that we have no doubt the interest paid to
him, from 5 to 64 per cent., as stated in his evidence,
p. 127, exceeded the current rate at the time. This ix
sufficiently apparent, from a consideration of the.
charges made at the same dates by Messrs. IL and W.
Hichens and Harrison. Indeed, Levy himself is
anxious to have it understood that these rates of in-
terest were not charged by him, but spontaneously
offered by Mr. De Berckem's clerk. On the other
hand, however, it is proper to remark, that the trans-
actions of Mr. Levy, now in evidence before us, are
by no moans of the same extensive character as those
of the other parties above particularised.
CLASS IV.—We now arrive at the consideration of
the fourth and last class, in which we place William
Mariner, Francis Towneley 1)e Berckem, William and
James Morgan, and Edward Lloyd Morgan : for of Ea-
pallo it is, of course, unnecessary to say anything further.
With respect to William Mariner, Francis Towneley
De Berckem, and William and James Morgan, it is our
duty to state that the evidence in relation to them, and
even that part of it (singly considered) which colsists or
their own stateinents, some of the most prominent re-
sults of which are noticed in the early part or this Re-
port, has impressed our minds tvith a doubt whether, at
the time when the bills with which they are respectively
connected, and which now torm part of the subject of
our
inquiry,thatsuchbills b
cam e their hand, hantl s, they did not all sus-
pect obtained
by
Eapallo through
the medium of some fraud. And, on the other hand, we
entertain no doubt that, supposing;
any of them to have
been ‘‘ithout such suspicion, he is at least chargeable
with want of proper caution in having become the holder
of the bills under the circumstances detailed in the evi-
dence. _

With respect to LdwArd Lloyd Morn ' we collect
that he had no personal interest in any of the transac-
tions in question, and negotiated the several bills which
he received front the firm of William and James Morgan
in the capacity of their clerk or agent only: though, as
between him and the several parties to whom he de-
livered the bills, he was the ostensible negotiator. His
subordinate position with respect to the firm, and the
filial relation in which he stood to the/senior partner,
entitle him in some measure to more favoin able cot),
struction titan the members of the firm themselves. But:
lie was, by his own admission, so well acquainted with
the nature and extent of their dealings with Solari and
Rapallo, and negotiated so many bills which he knew at
the time to have been received from those parties re-
spectively, that we feel ourselves obliged to express the
same doubt with regard to him that we have above ex-
pressed with regard to his employers. There is, how-
ever, one case differently circumstanced from the rest.
we mean Case 1., in which the first of William and
James Morgan appear to have had no concern wh,tever,
and in which he acted entirely on the private account
of Mr. Cook. In this particular case we feel no difficulty
in pronouncing Edward Lloyd Morgan clear from all
imputation either of fraud or negligence.
It only remains to advert to the bills which 'are nut
the subject of claim.
'.rhere are two different sets thus circumstanced,
and their numbers are 'us follow :
Nes.-6,404---6,413, 6,415, 6,433,6,460-6,464
6,494, 8,309-8,313, 8,324-8,353, 8,383... 54
Nos. 7,068, 8,377, 8,378
Total
The first set were delivered up to the Chancellor
of the Exchequer by Mr. F. De Berckem, under cir-
cumstances that are detailed in the evidence. They
had all been received by him from Rapallo its lk
• .