The Day They Hanged a Banker

By Martin Hedges

A miscellany of tales of fraud from the 19th century onwards, which show that whatever we just lived through during the crisis of 2008, our forebears got shafted just the same. There have been Black Mondays, Tuesdays, Wednesdays -- there isn't a day of the week that does not have a shadow over it, as greedy bankers, money magicians and downy-faced chancers seek to fleece investors. From the man that invented a country in Central America just so that he could lure pioneers to buy plots in a swamp, to the humble clerk -- by day -- who was a millionaire in the evenings and the weekends, to the man who was Ponzi before Ponzi. British crooks, American crooks, French crooks -- they're all here. Many of the stories are amusing, some are poignant. One at least is tragic, when a society banker caught robbing his clients had the dubious honour of being the last banker hanged in England.

• Language: English
• Publisher: Martin Hedges
• Release date: Jun 10, 2014
• ISBN: 9781310563805

Martin Hedges

While London's Cockneys delight in telling you they were born “within the sound of Bow bells”Martin Hedges' international yearnings began as he was lulled to sleep by the sound of jets taking off at Heathrow.He is a business journalist though he latterly took a PR role when hired by the French government, trying to convince its oldest enemy, the British, to invest in business in France. The high points of his career include being hit with a golf club by Ted Turner and introducing Boomtown Rats frontman to British press baron Robert Maxwell with a “Bob, this is Bob...” Blackadder-styleHe trained as a lawyer, though he never practised. He trained as a private pilot though he thought that him flying a plane was like giving the keys to the highway to the worst learner in driver's ed.He lives in Acton, not that strip mine of the soul in West London, but a leafy village in the ancient English county of Suffolk, where the sound of woodpeckers on 'fully automatic, safety's off' attacking insects under the bark punctuates the relentlessly demented lowing of wood pigeons.

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THE DAY THEY HANGED A BANKER

CRASHES, PANICS, FELONS AND FRAUDS

MARTIN HEDGES

Copyright 2014 Martin Hedges

The author asserts his moral rights

Published by Acton Books UK: a Smashwords Edition

This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away. If you would like to share this book with another person,please purchase an additional copy for each recipient. If you are reading this book but did not purchase it, or it was not purchased for your use only, then please return to your ebook retailer and purchase your own copy. Thank you for respecting the hard work of this author.

If the moral improvement of a country bore an equal proportion to its material prosperity, we might well pride ourselves on the vast progress which has been made in England since the commencement of the present century... But unhappily recent events have only to clearly shown that, the greater the prize within reach of the active and honestly-enterprising, the greater the amount of fraud

The Great City Frauds of Cole Davidson & Gordon, Fully Exposed; Seton Laing; 1856

Money? It’s a crime

Once upon a time we hanged bad bankers

The profit and loss of Henry Fauntleroy

Painful to the feelings of an honourable man

Overend Gurney and Other People's Money

The Morris Dance of debt and dishonour

A million pound lifestyle on a clerk’s wage

Gone West

Of Clay and Wattle Made

I can not live; I have ruined too many

If you can't trust a trustee, who can you trust?

Welcome to Gregor Country

Diamonds on the Soles of his Shoes

Extended Credit

Hoax Ames; King of Spades and Extended Credit again

Mr 520 Per Cent; the Ponzi before Ponzi

Ponzi and his Postage Stamps

Money? What it Don't Get, I can't Use

How much was money really worth?

Other Books by Martin Hedges

About the author

Money? It’s a crime

Feeling shafted by the dispiritingly bad behaviour recently of bankers, MPs and oligarchs? Let it be a comfort of sorts to discover that they were doing exactly the same to our forebears. Panics, failures and frauds, like the poor, have always been with us.

In the early 19th century the stuffy world of bank partnerships exploded into the ‘light touch regulation’ of the joint stock bank. Out with partnerships went liability. In the very old days, if your partner messed up and the bank failed, every one of the partners could expect to have to fork out. It taught people to pick their partners carefully and to keep their enterprise as much as possible out of the riskier shores of business. Now they had been replaced by downy faced chancers who knew that the risks weren’t on them.

When the government robs Peter to pay Paul, it is called your taxes and someone else's pension. When private enterprise has a go, it’s called a Ponzi scheme. Pyramid schemes are probably as old as, well, the pyramids. Was the strenuously named Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi the first to try paying those who got in first from the money of those who got in last? Answer no.

From Tulipmania and the South Sea Bubble to dotcoms and suspiciously optimistic valuation of Twitter and Facebook, there have always been those who could spin a yarn. But it’s our fault for believing them. For every shyster there has to be a patsy, for every greedy act there are greedy people thinking that too-good-to-be-true will not be too good to be true this time round.

So put your cash under the mattress, turn off the news and sit down with a cup of strong coffee to cheer the days when they routinely hanged bankers for playing fast and loose with our money…

Once upon a time we hanged bad bankers

Why were we once so tough on bankers? Other trading nations such as France, Holland or Hamburg in the German Confederation did not have the death penalty for forgery. Those against it felt that its very harshness was counter productive; for if humanitarians detected a forgery or a forger they were loathe to prosecute if the outcome was the certain death of the miscreant. Even before the Fauntleroy fraud in 1824, the death penalty for forgery and a great number of other crimes of a lesser nature than homicide had been questioned by a numerous and respectable class of person.

Ironically, it was that same class of person less than 100 years before who had upped the penalty for forgery from the pillory, a massive fine and a couple of years in jail – to swinging from a knotted rope. Now they wanted to draw distinctions between the acts of those such as Fauntleroy who had privilege, but who inflicted a lifetime of misery on many of their own middle classes, with the small time trader who in extremis does a foolish thing and signs something that he shouldn’t. It wasn’t until 1832 that the law was changed.

The word swindler came from the rookeries of London where it had passed from the Yiddish of the émigré Jewish population from mitteleuropa into English criminal patois in the mid 18th century. It was not a word that polite society would use to accuse its own until The Times used it in 1786. Swindling as a craft flourished as coins were supplanted by credit.

In medieval times there was a great temptation to coin money, chip bits off gold and silver coins. Since the 18th century paper currency and paper documents that were as good as money filled the void that coins could not – the means of exchange had effectively been privatised. Forgers stepped into a niche in the ecosystem – as the act of forgery on paper was so much easier than the act of making metal coins. The law was both vague to define the crime and lax to punish. Just after the Napoleonic War the Bank of England was told that Bank of England note plates are more easily imitated than common engraved shop bills because they are of inferior execution; an apprentice to a writing engraver of two years standing, by three or four days work, is able to copy a Bank-note plate so that good judges cannot tell the genuine from the spurious. (The Times Nov 15 1817).

This was something the state could not tolerate. The paper exchange relied on utmost good faith in the legitimacy of the promise. Checking was often all but impossible. In England notes issued by country banks did not travel far from the town where they were drawn up. They were treated as good by the simple expedient that someone recognised the handwriting of the banker who wrote them. But with the way that English cities were growing during the early Industrial Revolution that was less likely to work in a metropolis. And as selling to the world expanded nor was it safe for international dealing.

The practicalities of payment across an ocean were almost un-policeable. When you received in Virginia a bill of exchange from a reputable London bank for £100 as payment for your tobacco and you took it to a correspondent banker in, say, Philadelphia, representing the London bank you and the Philadelphia bank both expected the bill to be eventually honoured in full. These documents were negotiable and as such were often endorsed and passed on. The tobacco farmer got the £100 less a small discount from whoever he passed it to and the new holder of the bill would use the bill like money to pay his debts and so on. The Bank of England underwrote the issuing bank’s credit and all was right