New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-12-22
RIGGING TIE PARIS BOURSE.

The &c nyictlOn OF two OF the managers Oktne
| Union GGnerale is an unexpected sequel to one
of the most startling episodes in the history OF
finance. When the year opened the shares OF
that eompany were among the highest quoted
at the Paris Bourse. This was not one OF tile
vulgar speculations of the republican iabble'
IL was religious aud aristocratic finance. Inc
Pope was reputed to have blessed 1t with his APP
uroval cardinals were represented 10 nave sane
toned it as a convenient schemes for amasslng
and investing the wealth OF the Catholic
world; emperors, Bourbon princes, dukes,
commits. and the flower of the aristocracy of tue
Continent had undoubtedly invested heavily in
tbe shares In France the Legitimist mobiles
had We'd with UltramOntanism in the credulity
and greed with which they had engaged in a
speculation as wild as any of John Laws
schemes. Imbued with an artificial sanctity as
an enterprise in which the capital of good
Catholics was primarily interested, it had no
other characteristic features. 1t was banking
company which invested its resources III
various railroad aud commercial undertakings
involving extraordinary risks, and conse-
ouently the dividends which would be declared
if those investments were fortunate would
necessarily be large. On the other hand, II It's
deposits and capital were sunk in ruinOus ven
lures, its collapse after period of uDwoDted
prosperity would be inevitable. That collapse
occurred during the third week of January.
The investors and those who had purchased
the shares at fict ,tious values were ruined.
France narrowly escaped general panic.
The managers of tbs specious scheme of re-
ligious banking were accused OF enrichlng
themselves at the expense of their victims. I'm
the indictment on which Bontoux and FEEDER
have been tried before the Paris Correctional
Tribunal they are charged with manipulating
the market by various dishonest devices. For
example, when the capital was increased in
April, 1879, from $5,000,000 TO 100000
they passed of a fictitious investor named
Balensi AS the owner of 1858 shares which
had never been taken, and published in bis
name a fictitious application. In November,
1850, when the capital was doubled second
time, the unallotted shares were disposed of in
the same manner in order that the formalites
of the banking laws might be complied with
In addition to the unallotted shares, Posts
shares deposited by customers as security for
loans were arbitrarily assigned to fictitious per-
sons, and applications were made in their
names for the same number Of new shares
When the capital was increased third time, in
November, 1881, FEEDER and one of Bontoux's
confederates applied for new shares as the
owners of nearly $1,000 shares which had
never been allotted In like manner there
were fictitious balance-sheets and dividends,
heavy losses being represented as enormous
profits and when a large number of unsub-
snribed shares remained in bank the managers
speculated with them ON the BOurse, the rise
caused by fictitious purchases at exaggerated
prices benefling them individually and event
ually overwhelming the Union Generate with
disaster.
These charges seem to have been fully sup
ported by the evidence. At the time of the col
lapse only 500 shares were nonllnally unsub-
scribed, but the transfer lists revealed as many
as 10000 shares assigned to fictitious persons.
Bontoux's favorite dummy. Hoard, admitted that
he had made $40, 800 by pocketing a franc for
every fictitious application signed at the request
of the managers, and the head bOCkkeeper of
the company testified that he had been ordered
by the presiding director to draw up "a bal
ance- sheet which would show a profit of
1900, 900, when there was an actual loss.
The evidence must have been conclusive, for
even under an elastic code of banking laws the
managers of the Union Ger erale have each
been sentenced to five years. Imprisonment
with fine.