The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1841-10-29 00:00:00

IVE FRAUDS IN EXCIIEWER, BILV

Considerable sensation has been occasioned in London for
the last few clays, relative to a discovery of fraudulent issues
of exchequer bills. In many instances triplicates of these
documents are found to be in existence, and how they have
been created has given rise to a multitude of suspicions. As
may be imagined the business on the Stock Exchange is
much neglected. We take the following on the subject from
the Times of Wednesday :

It is understood to-day in the city that suspicion has at
length been directed to a particular individual relative to the
fraudulent issues of exchequer-bills, and that the party con-
nected with it has been taken into custody. He is said to
hold a high station in one of the government offices, but at
the
,present state of the proceedings it would perhaps be
scarcely right to mention his name, although it is pretty ge-
nerally spoken in the city ; moreover, it is scarcely necessary,
as it must of course transpire officially within a very short
period. Besides, it seems that the party apprehended is not
the only offender, as, according to a full confession which he
is said to have made, a great many other persons are impli-
catediinithe transaction. The amount of the frudulent issue
is said to be as high as £150,000 or £200,000 according to
the confession of the party. The bills do not appear to have
been strictly speaking a forgery, if we may trust the general
report, according to which the signature of Lord Monteagle
has been obtained in a surreptitious manner. At the same
time the practice which is suffered to have obtained in the
office, of allowing different persons actually to sign the name
of Lord Monteagle, and by his authority, was excessively
loose, and calculated to give great facilities to forgery, while
great difficulties would be thrown in the way of detection.
There is rather a curious anecdote which is told in connexion
with the affair, and one which is singularly illustrative of the
carelessness with which the business of the office has been
conducted. During the present investigation, one of the
bills is said to have been shown to Lord Monteagle, who
observed, that he really could not tell whether the signature
was his signature or not.
The circumstances which have transpired to-day would
seem to show that a great many of the rumours which were
afloat on the first discovery of an irregularity in the Exche-
quer-bill market were totally false, and had their source in
idle conjecture, or, what is more probable, in the endeavours
of the parties really implicated to turn suspicion into wrong
channels. So much, however, of the late rumours still ap-
pears to be true that the surreptitious issues are in some
manner connected with the sales of Spanish stock. Now
the chief anxiety in the city is, admitting the bills to be for-
geries, (for the case will hardly arise if they have actually
been signed by Lord Monteagle,) and also admitting the
forgeries to have had a sort of government currency, to know
what degree of liability will attach to the government itself
to make good any sums that may have been lost by the tran-
saction. Had the parties holding them received them imme-
diately from the Treasury, or with a due degree of caution
as to the parties from whom they took them, it would not be
the., same case as if, lured by a high rate of interest, they
took them of parties to whom they were utter strangers, or
whom, if they knew at all, they knew to be in such circum-
stances, that honest possession of the bills was almost impos-
sible. If, however, as I before observed, the bills are actually
signed by Lord Monteagle, it is pot likely this delicate ques-
tion will ever be practically discussed. At present it is the
opinion of many experienced persons in the city, that the
safe course on the part of the government will be to draw in
the hills of the present issues, and at once issue new ones, to
remove the complication which at present exists, and which,
whoever may be the parties actually implicated, results from
the grossest negligence and mismanagement under the Whig.
administration.

One of the latest rumours relative to this affair is the cap-
ture of a party in the city, who is supposed to have been the
next chief implicated to the one already in custody.
On this subject we have received the following communi-
cation from a source on which we have reason to rely :
"The frauds committed in regard to Exchequer-bills have
been committed through the agency of a person in the Ex-
chequer-bill-office. Whether the duplicate bills in circula-
tion are forgeries, or whether the bills, having been regularly
signed, have been fraudulently obtained, is vet uncertain.
The bills, whether forged or fraudulently obtained, were ap-
plied to speculations in foreign funds, chiefly Spanish stock.
A gentleman, who held a confidential appointment in the
Exchequer-bill-office, has been committed to prison.

The following we take from the Times of yesterday :
Though the events disclosed yesterday would seem to have
brought the affair of the fraudulent issue of Exchequer-bills
to something like a denouement. the interest excited by it
has hardly at all subsided. In fact, until some official an-
nouncement is made from the Treasury on the subject, there
is scarcely a holder of Exchequer-bills who feels entirely at
his ease respecting this part of his property. Besides this,
the credit of the government itself is mixed up in the ques-
tion to a degree which becomes more alarming the longer de-
lay takes place, and there can be no doubt that some very de-
cisive measure must soon be adopted at the Treasury to avert
the consequences of this uneasy feeling. It may be stated,
perhaps, as the more general wish, that an order should be
made, not only for immediately calling in the whole of those
in circulation, but for replacing them by others of a totally
different mark and colour, so as to prevent any possibility of
being confounded with them. With the arrangements that
are at the command of the Treasury this ought to be neither
a long nor a difficult affair, and even the fixing of a period
when all uncertainty would be removed would tend to some
extent to relieve the public mind. But, besides this, there is
another feeling on the part of the monied interest, which is
calculated to make a very strong impression at the Treasury,
and which is, that frauds like these, to so large an amount,
and continued for so long a period of time, could not have
happened without a system of management at the Treasury
utterly defective and vicious. Helace the Treasury will be
expected not only to remedy the present evil, but also to es-
tablish such reforms as will make the recurrence of it im-
possible. It is well known that in the offices where the re-
sponsible part of the exchequer-bill business is conducted
the attendance of the persons employed is very short and
very uncertain, and that the facilities, therefore, for fraud,
to any parties who are disposed to practise it, are very great;
and we fear it may be added that many of those servants of
the public are passing much of that time when they ought to
be on duty either on the Stock Exchange, engaged in ha-
zardous speculations, or at the offices of joint-stock compa-
nies, where many of them act as directors. With respect to
the party charged with the lead in this fraud, the name is not
yet publicly announced, though it is as freely mentioned
everywhere as if that had been the case. Much blame is at-
tached to the treasury for having allowed the whole of this
day to pass without making any official communication either
at the Bank or at the Stock Exchange. But, though they
have done nothing, a number of minor incidents have com e
to light which may be mentioned, as showing that the affair
has very extensive ramifications, and it is thought very pos-
sible that the party apprehended is but an instillment in the
hands of a confederacy, who have associated for the purpose
of conducting this enormous fraud. It has transpired that
the offices of various persons have to-day been searched,
under a warrant from the Secretary of State, and it is also
said that several individuals connected with the Stock
Exchange have had notice to attend at the Treasury for an
examination, supposed to be going on at the moment when
this paragraph was penned.

Several very important questions, too, have arisen in con-
nexion with this affair, the most material of which is, what
has been going on at the Bank relative to the operation of
funding Exchequer-bills, under the late notice from the Trea-
sury. We believe it may be stated that, until this day, no
precautions have been instituted there to test the genuineness
of the Exchequer-bills brought in to be funded, and yet such
is the nature of the proceeding that any party delivering Ex-
chequer-bills could obtain stock in exchange for them, and
dispose of that stock in the market, all within the period of
a couple of hours. Thus, if the parties had resorted to this
mode of obtaining a value for their Exchequer-bills, they
would have realized immense sums, and placed themselves
almost beyond the reach of detection.

Another most important question is how the Treasury will
deal with those parties who may be said to be innocent hold-
ers of these forged securities, and whether they will be repaid.
This point must, we imagine, remain very much in doubt
until the investigations relative to the fraud are complete ;
for the Chancellor of the Exchequer, it is said, conceives a
broad distinction to exist between a rand originating solely
with one of his own officers, and one concocted out of doors,
of which that officer is made the tool. Something, it is clear,
must be done to bring the whole circulation of the Exchequer-
bills under observation, without which it could not be known,
even at the Treasury, what extent of responsibility they
would have to incur by adopting the fraudulent as well as the
genuine issue.

These disclosures have brought to mind many circum-
stances in the money-market for months and even for years
past, which wore thought at the time mysterious and unac-
countable, but which, in the hurry of business, passed away
without further observation. As to the speculations in
Spanish stock, for example, it is recollected that the parties
ostensibly engaged in them were persons of inferior note and
standing, who yet carried on their time-bargains to such an
extent that their differences on the settlement of the foreign
account, which only lasts for a fortnight, were often from
£20,000 to £30,000. ; and yet it was found: that they always
contrived, in some way or other, to make good their engage-
ments. Hence they acquired, of course, the confidence of
the jobbers in the Stock-Exchange, and were believed to act,
not for themselves, but for principals of real wealth, who, for
some cause or other, chose, as is not uncommonly the case,
to keep aloof from observation. It was contrived, also, to
let it be believed that the funds raised by these different ope-
rations had some political object, and even as far back as the
mad expedition of Louis Napoleon, they were connected with
that expedition, as they have been latterly with the insurrec-
tion in Spain. Most of the speculations in Spanish stock, it
should be observed, are usually unsuccessful, political cir-
cumstances and the state of the money-market turning con-
stantly against them ; and hence, some people suppose that
the mode of raising money by false Exchequer-bills was an
after-thought, devised to rescue them from a situation other-
wise irretrievable; and it is by no means thought improbable
that a participation in these losses by the official person im-
plicated at the Treasury facilitated their employment of him
as their instrument for getting out of their mutual difficulties.
It may truly be said, we believe, that since the first issue
of the document called an " Exchequer-bill," there never
has existed so much excitement respecting that securiety as
at the present moment.

It is proper to mention, in order to save many innocent
persons from suspicion, that the person now in custody is
Mr. E. Bowman Smith, of the Exchequer-office.

LONDON MONEY MARKET AND TRADE REPORT

The business in Exchequer-bills continues for the while
suspended. One or two small transactions under guarantee
have been effected at the lower premium of 9s. They are
quoted almost nominally at 9 to 11 premium. This inter-
ruption to the regular mode of dealing increases the business
in the permanent stocks, which are quoted nearly :1 per cent.
better than yesterday. Consols for money were at one period
of the day quoted at 881, but closed at 881., and for the ac-
count, 881 to ; three per cents. reduced closed at 861 ;
three and a half per cents. reduced, 96i ; new three and a
half per cents., 981; long annuities (expiring the sth of Ja-
nuary, 1860), 12 5-16ths to 7-16ths ; bank stock, 162 to 163 ;
and India Stock, 242 to 243.
As the explosion of the exchequer-bill fraud will implicate
parties who have for a long time past been the supporters of
the Spanish market, the news from Spain, although of a fa-
vourable character, makes but trifling impression. It is not
likely that business in any of the markets will take its wonted
course till the public mind is relieved by a full disclosure.
Spanish actives closed at 201 to ; Portuguese five per cents.,
294- to *; Dutch two and a half per cents., 51 to ; Danish,
78 to 79 ; Brazilian, 55 to 57 ; Belgian, 1021 to 1033 ; Co-
lombian, 181 ; and Mexican, 24 to A.
TEA.—Very little business done in the market, in conse-
quence of the public sales advertised for Friday. Company's
congous remain the same—ls. 10W. per lb. cash.
SUGAR.—The market was quieter to-day, and the sales of
British plantation limited ; 71 casks of St. Lucia and 65 hhds.
of Trinidad were offered by public sale, and fetched lower
prices. 2700 bags of Bengal were offered; white sugars went
about 6d. lower, middling to good white fetching 68s. 6d. to
71s. 6d. ; low to middling ditto, 645. to 675. 6d. ; Khaur, 425.
to 455. 6d.

COFFEE.--140 casks of Jamaica were offered, and nearly
all sold, from 70s. to 116 s. 6d. for ordinary to good middling.
Cocoa-560 bags and barrels of British plantation, partly
sold ; ordinary to good, 40s. to 455. ; and 2500 bags of Guay-
aquil, 335. 6d. to 31s.

-Rica.-660 bags of ordinary broken yellowish Bengal sold
at Ils. to 11s. 6d., which is rather dearer.
PEPPER.-960 bags of good brown Eastern, partly sold at
34d.

At the last meeting, at Wells, of the Bath and Wells Dio-
cesan Church Building Society, nearly £7OO was contributed
to its funds.