Fraudsters and Charlatans Read online

  During the morning, lack of confirmation of the news from Dover had caused the price of stocks to slide, but at the new sensation brought by Sandom’s French officers, prices soared even higher than before, eventually reaching 33, bringing a fresh frenzy of buying. As late as 2 p.m. the London Chronicle reported that it was still believed that Napoleon was dead and the Allies in possession of Paris, although it denied the rumour that the guns of the Tower of London had been fired. Meanwhile, large crowds had gathered outside Mansion House waiting impatiently for the Lord Mayor to appear with an official announcement.

  The announcement never came. There was no news. Napoleon, as messengers were able to confirm by the afternoon, was very much alive. Admiral Foley’s enquiries had revealed that the pound notes supposed to have been in du Bourg’s pockets for months had been endorsed in London only six days previously. Du Bourg was an impostor, and so, it appeared, were the two French officers who had ridden so triumphantly through London and carefully avoided any contact with government offices.

  To this scene of joy and of greedy expectation of gain, succeeded in a few hours, that of disappointment, shame at having been gulled, the clenching of fists, the grinding of teeth, the tearing of hair, all the outward and visible signs of the inward commotions of disappointed avarice in some, consciousness of ruin in others, and in all, boiling revenge, so strongly and beautifully, or rather so horribly depicted by the matchless pencil of Hogarth.5

  It was not only wealthy speculators who suffered, but many humbler investors who could ill-afford a loss. Purchases had also been made that day on behalf of the official trustee who managed the assets of charities devoted to the relief of the poor.

  As the crowds dispersed and the turbulent day ended, the Stock Exchange Committee quickly concluded that this was not simply a rumour that had got out of control but a conspiracy to defraud investors. The profits made that day were placed in the hands of trustees, and a subcommittee of ten men was assembled to investigate the affair. One of its first actions was to follow the trail of the mysterious Lt-Col du Bourg. This was easy enough, as he had travelled by post-chaise all the way to London, scattering the glad news and gold napoleons as he went. From the Ship Inn at Dover he had driven via the Fountain in Canterbury, the Rose, Sittingbourne, the Crown, Rochester, and the Granby at Dartford. Once in London du Bourg became suddenly less willing to draw attention to himself, and transferred to a hackney coach, in which he drove to 13 Green Street. After making some enquiries of the servant there, he was admitted, taking with him only his sword and a small leather case. His greatcoat was now buttoned firmly up to his chin, so only the dark collar and not the scarlet breast of his uniform was visible. Later enquiries revealed that 13 Green Street was the home of one of the greatest naval heroes in British history, Lord Thomas Cochrane.

  Thomas Cochrane was the eldest son of the 9th Earl of Dundonald. Born in 1776, Cochrane had established a naval career of outstanding brilliance in combat and command. A distinctive, rather than handsome, man, he was well over six feet in height, with red hair and a prominent nose. Popular both with the general public and the men who served with him, he had, however, made some dangerous enemies in high places by his bluntly outspoken efforts to expose corruption in the Admiralty. On the morning of 21 February 1814 he had been engaged in two important projects, the fitting-out of his new command, the Tonnant, and work on the invention of a new naval signalling lamp, for which he intended to register a patent.

  He had breakfasted at the Cumberland Street residence of his uncle, Andrew Cochrane Johnstone, a tall elegantly dressed man in his late forties with long powdered hair. Also at the table was 38-year-old Richard Gaythorne (sometimes spelt Gathorne) Butt, their stockbroker, a tall thin man in his late thirties with light hair and a florid complexion. At 10 a.m. the three men took a hackney carriage, but Thomas Cochrane alighted at Snows Hill to visit the workshop of Mr King, a lamp-maker, while the other two, as was their habit on weekdays, proceeded to the Stock Exchange. Shortly before 11 a.m., Cochrane’s servant Thomas Dewman arrived at Mr King’s with a barely legible note, saying that a military-looking gentleman had called on a matter of great urgency. Cochrane’s brother, William, who had been serving in Spain, was dangerously ill, so bracing himself for bad news and abandoning all thought of his lamp, Cochrane hurried home. To his surprise, he was met not by a messenger from abroad but a man he was already acquainted with, Charles Random de Berenger. (In Cochrane’s affidavit made three weeks later he stated that he had not expected the visit. De Berenger, on the other hand, claimed in 1816 that it was a pre-arranged visit and that Cochrane was a part of the conspiracy, but this was after he had unsuccessfully tried to extort money from Cochrane. De Berenger’s account of the meeting should therefore be regarded as suspect.)

  De Berenger was born in Prussia in 1772. His father, Baron de Beaufain, had owned lands in America worth over £30,000 (about £1.5 million today), but being a Loyalist opponent to the revolutionary war, his assets were confiscated by the State. In 1788 father and son came to England to try to obtain indemnity from the British Government. The Baron’s efforts failed and he died six years later, leaving his son with a worthless title and a strong sense of having been cheated of his inheritance. De Berenger was a man of many talents – a clever self-taught artist, amateur scientist and excellent rifle shot. In 1814 he had for some years been serving as an officer with the Duke of Cumberland’s sharpshooters, whose uniform included a dark green jacket. Always anxious to make money, he bombarded anyone he could think of with plans for improved methods of conducting warfare and inventions he was convinced would make his fortune. An attempt to start a charity for distressed artists had resulted in large personal losses and some bitterness, as an existing charity took the view that his intentions were untrustworthy. He had recently been making architectural drawings for Andrew Cochrane Johnstone, and as a result had dined at the latter’s house, where he had been introduced to Lord Cochrane.

  De Berenger’s new acquaintances had given him the prospect of better fortunes. Admiral Alexander Cochrane, another of Thomas Cochrane’s uncles, had offered to take him to America and had recommended him for the rank of lieutenant-colonel; but de Berenger had recently learned that, because of his status as an alien, the plan had not been approved. He was currently in debt to the tune of some £350 and had been committed to the King’s Bench debtors’ prison, although he was able to live within the ‘Rules’, that is, instead of being incarcerated he was permitted to lodge within a 3-mile radius of the prison itself. Despite these setbacks, he was still hopeful of being able to settle his debts and go to America. On 25 January Admiral Alexander had sailed without him, but he had recently approached Lord Cochrane suggesting that he might go out with him on the Tonnant instead.

  De Berenger, despite having waited indoors for some time, was still wearing his grey military greatcoat buttoned to his chin. His face was red with cold when he arrived, making his pock-marked skin appear blotchy, but both this and the redness had faded by the time Cochrane saw him. The only visible part of his uniform was the dark collar and drab breeches encased in dark-green overtrousers. He began with great uneasiness to apologise profusely to Cochrane for taking the liberty of summoning him, saying that only his personal difficulties and distressed state of mind had induced him to do so. To Cochrane’s astonishment he then launched into a tale of woe, saying that his last hope of obtaining an appointment in America had gone, that he had no prospects but only debts he was unable to pay. He hoped that with Cochrane’s approval he could at once board the Tonnant, where he could find honourable employment exercising the sharpshooters. Cochrane, still reeling with relief that his brother was not dead, was more inclined to be sympathetic than he might otherwise have been. He said that he would do everything in his power to help, but it was not possible for his visitor to go immediately to the Tonnant, where the cabin had no furniture, nor even a servant. De Berenger tried to brush this difficulty aside, but Cochrane added that he co
uld not take a foreigner without permission from the Admiralty. If de Berenger could get that permission he would be pleased to take him. De Berenger was deeply disconcerted at this response. He said he had not anticipated any objections, and indeed had come away fully prepared to board the Tonnant that day. Dressed as he was, he could neither return to his lodgings nor approach anyone he knew in official positions who might help him. He asked for a civilian hat to wear instead of his military cap. Cochrane lent him one, and when trying it on de Berenger commented that his uniform was visible under his greatcoat. Cochrane, who was some eight inches taller than de Berenger, was obliged to lend him a long black coat of his own. According to Cochrane, de Berenger removed the grey coat and put the black one on in a back room while he was not present. With the greatcoat and green overtrousers tied up in a bundle, de Berenger at last departed, clearly in some emotional distress.

  Cochrane gave no more thought to this strange visit, and during the next week completed his preparations, joining the Tonnant on 1 March. Meanwhile, the Stock Exchange Committee had been compiling a list of those it wished to interview. The trading records for 21 February were examined to see which substantial investors had made money by disposing of Omnium and other government stocks early that day. It was soon apparent that, while most investors had been eagerly buying up Omnium, only three had made large disposals. One of these was Thomas Cochrane; the others were his uncle, Andrew, and Richard Gaythorne Butt.

  Andrew Cochrane Johnstone, son of the 8th Earl of Dundonald, was born in 1767. He must have had considerable personal charm, enabling him to combine his military career with a series of successful schemes aimed at lining his pockets at the expense of others. In 1793 he married an heiress, Lady Georgiana Hope-Johnstone, and added her surname to his own. Four years later he became Governor of the Island of Dominica. His rule, according to the Dictionary of National Biography, ‘was marked by tyranny, extortion and vice’.6 He was recalled and court-martialled, but because of the complexities of the case he was given the benefit of the doubt and acquitted. His next move was to bribe his way into parliament as MP for the rotten borough of Grampound, a position he knew would exempt him from criminal prosecution. Georgiana had died in 1797, leaving him with a daughter, Elizabeth, and in 1803 he married a widow who was a cousin of Josephine Bonaparte. Two months later the resumption of hostilities with France necessitated a separation. His letters to his wife were returned unopened, and he never saw her again. Returning to the West Indies he was appointed auctioneer and agent to the Navy for its conquests there, which gave him ample opportunity to carry out some major financial swindles. Placed under house arrest, he escaped, returned to England and in 1812 was again elected to parliament. There he made a substantial sum of money offering to sell rifles to the Spanish allies. The rifles were never shipped, and his creditors found themselves barred from suing him: it must have stung somewhat when they found that the frigate they had placed at his disposal had been used for a lucrative sideline in smuggling. During his infamous career Cochrane Johnstone acted with supreme self-interest and a callous indifference to the fate of those unfortunate enough to cross his path, although he seems to have had both affection and admiration for his nephew Thomas.

  It was natural that Cochrane Johnstone should have been attracted to the Stock Exchange as a means of making money. With no expertise of his own, he engaged Richard Gaythorne Butt, a former naval clerk turned successful speculator, to manage his affairs. Thomas Cochrane, on the other hand, took little interest in the Stock Exchange, and it was not until October 1813 that he became a speculator. Butt had tried to induce him to invest in government securities, saying he could make gains without advancing any principal. Cochrane declined to enter into speculations he did not understand, but a few days later Butt brought him the sum of £430, saying it was the gain on investments he had made on Cochrane’s behalf. Cochrane still refused to take the offer seriously and told Butt to sport with the money until he lost it. Over the next few months Butt placed £4,200 to Cochrane’s account, and ultimately Thomas Cochrane, seeing that Butt could be as good as his word, and believing him to be an honourable man, agreed to let him handle his investments.

  On the day of the Stock Exchange fraud, Thomas Cochrane, Andrew Cochrane Johnstone and Richard Gaythorne Butt held between them stocks valued in excess of one million pounds, an amount which at today’s prices would be equivalent to £45.5 million. Selling virtually all their holdings on that day, they had netted profits of £10,500 (equivalent today to about half a million) in the course of one hour. Had the weather been fine and Admiral Foley more trusting, they might have gained up to ten times that amount.

  Of the three, Thomas Cochrane had been the smallest investor. The whole of his Omnium holdings at 21 February was valued at £139,000. He had bought it on 12 February and left a standing order for it to be sold if the price rose by 1 per cent. On the day of the fraud he had not attended the Stock Exchange, given any orders to sell, or indeed shown any interest in the markets. By contrast, Cochrane Johnstone and Richard Butt were enthusiastic players, their accounts showing numerous transactions through three different brokers.

  On 8 March, Cochrane discovered that his name was on the list of those men the Stock Exchange Committee wished to interview. Also on the list were his uncle Andrew, Richard Butt and three men who were unknown to him, John Peter Holloway, Ralph Sandom and Alexander McRae. Cochrane obtained leave to attend to his affairs in London and hurried home, where he made an affidavit describing to the best of his recollection all that had passed on 21 February.

  John Peter Holloway was a small investor, a wine and spirit merchant with stocks valued at £40,000. He had given instructions to his broker to sell on 21 February, but not until the afternoon. Questioned by the Stock Exchange Committee, he assured them he knew nothing of the fraud. He was allowed to depart. Ralph Sandom, who had accompanied the supposed French officers in the post-chaise, had no investments, and explained that he was an agent for a newspaper and had been duped like everyone else. He too, was not questioned further. Alexander McRae, a poor man with no interest in the Stock Exchange, had been accused by an informant of involvement in the post-chaise masquerade. He declined to come forward.

  The Stock Exchange list of suspects was supposed to be seen only by the Committee, but somehow it found its way into the popular press. Butt and Cochrane Johnstone immediately announced that they were innocent and were preparing to take action for libel, presumably against the newspapers, although neither of them did so. Lord Cochrane, believing that his affidavit would settle the matter, remained convinced that de Berenger and du Bourg could not be the same man, as du Bourg had been described by witnesses as having a red blotchy face. De Berenger was already a wanted man: a warrant had been out for his arrest for some days since he had been reported missing from the Rules of the King’s Bench.

  To an unprincipled rogue such as Andrew Cochrane Johnstone, Charles Random de Berenger was an ideal tool for one of his money-making schemes. A man of action, down on his luck and with a monstrous chip on his shoulder about his lost fortunes, de Berenger was flattered by the favour of the Cochrane family and hopeful that the connection would lead to advancement. Early in February 1814, an unfounded rumour of Napoleon’s death had set the Stock Exchange in a flurry and the Cochranes and Butt had all bought heavily in government stocks. With settlement day approaching, there was an urgent need for good news. According to de Berenger’s account of the plot,7 Cochrane Johnstone began sounding out de Berenger, taking care to introduce the fraudulent scheme in the guise of a joke. He said how easy it would be to bring a pretend messenger to London, laughingly suggesting a bearded Cossack warrior with a pike. De Berenger, failing to see the humour in this, only commented that such a figure would not be believed. Cochrane Johnstone persisted, asking de Berenger what he might propose, and after further conversation the idea emerged of an officer arriving at Dover. The subject was dropped, but the next time they met Cochrane Johnstone, all pr
etence of humour abandoned, asked de Berenger to draw up a plan of how the deception might be accomplished, representing it as a ‘stratagem … daily practised, never punished, never looked into and above all, one that could save Lord Cochrane and himself from ruin’.8

  De Berenger objected that it would ruin his prospects in America if he was found out, whereupon Cochrane Johnstone bit his lip, looked displeased and pointedly accused him of refusing to help those who had helped him, reminding him that it was to the Cochranes he owed the opportunity in America. Over the next few days, Cochrane Johnstone, who was adept at changing his tactics from oily persuasion to emotional blackmail without missing a beat, openly displayed great anxiety over his investments, claiming that he and his nephew stood to lose £150,000 (about £7 million today). De Berenger, still not convinced that his benefactor was serious, reluctantly agreed to draw up a plan. He was quite unaware that Cochrane Johnstone had already assigned him the role of the impostor.

  Invited to a meeting at the stockbroker’s office in Sweetings Alley on 19 February – at which de Berenger claimed that Cochrane Johnstone, Thomas Cochrane and Butt were all present (Cochrane and Butt were to deny they had been there) – there was much despondency and talk of serious losses. De Berenger, according to his own account, succumbed to an emotional appeal from Butt. ‘Baron, cannot YOU help us in some way or other: if you do not, WE ARE ALL RUINED.’9 Believing that he alone could save the Cochranes, to whose fates his own advancement was so closely connected, de Berenger consented. Provided with funds, he purchased the gold napoleons, a leather dispatch case and the military clothing he required, including an aide-de-camp’s uniform in scarlet with dark-blue collar and cuffs, and for decoration a Russian medal and a Masonic emblem. He travelled to Dover on 20 February with his costume in a trunk, and took a room at an inn, where, after careful preparation, he set out to play his part.