It’s pretty easy to hoax people. We all want to be deceived, but only up to a point. Some hoaxes are fun and pleasant, others malicious and unpleasant. We’d like a way to tell the difference (Robert Carroll).



Oct 9, 2014

Napoleon is Dead - Great Stock Exchange Fraud of 1814


Historical Background

In early February 1814, the war on the Continent against the French was proceeding on two fronts. Wellington was driving north out of Spain into southern France to engage the French divisions under the command of Marshal Soult. In Eastern Europe, the Russians and their European allies were pushing west across France toward Paris, to take on the French forces under the command of Napoleon himself. By 19 February, rumors were flying that the Cossacks and the Prussians were within fifteen or twenty miles of the French capital and still pushing inexorably westward. In England, it was widely and eagerly believed that it was only a matter of time before Bonaparte and the French would finally be defeated.



The du Bourg hoax

In the pre-dawn hours of Monday morning, 21 February 1814, a man claiming to be Colonel du Bourg, an aid-de-camp to Lord Cathcart, the British ambassador to Russia, arrived in Dover. The faux Colonel du Bourg claimed that Napoleon Bonaparte had been captured on the outskirts of Paris by a troop of Cossacks, and hacked to death. He further reported that the Bourbon family had reclaimed the throne of France and the war was over.

Thus began what came to be known as the Great Stock Exchange Fraud. About 1:00am, the man claiming to be du Bourg told his story to the inkeeper at the Ship Inn, demanded writing materials and a horse and rider, to carry the urgent message he was about to write to Admiral Foley, the port admiral at Deal. Once the rider was on his way to Deal, du Bourg immediately departed for London in a chaise-and-four, for which he paid with a handful of gold Napoleons. Admiral Foley was awakened upon the arrival of the messenger, and after reading the message, he spoke to the rider, seeking some kind of confirmation for the extraordinary story he had carried. The man knew nothing more than what du Bourg had told him, adding that he believed du Bourg was already on his way to London. Though Foley was not prepared to take the message at face value, he was aware that in late January, Napoleon had nearly been killed by a group of Cossacks who attacked the patrol with which he was riding. According to reports, one of the Cossacks had come within a yard of the French Emperor before he was cut down. As dawn approached, Foley decided he must relay the message to the Admiralty in London by the semaphore telegraph system. However, when the sun rose, that part of Kent was heavily shrouded with fog and the semaphore telegraph was useless.



Effects on the stock market

As du Bourg traveled to London, still dressed in the red uniform of an officer of the general staff, he stopped along the way at every inn and post house to spread the news. When he reached the outskirts of London, he paid off the post-chaise and hired a hackney carriage to take him directly to Green Street. The news du Bourg brought and his claim he had been sent to England by the Tsar himself, added credibility to his tale, and it was not long before the value of government securities was soaring on the Stock Exchange. A few hours later, as the stocks began to falter without corroboration of du Bourg’s story, three conferates of the false Colonel, all dressed in the uniforms of French officers, made a show of celebrating the supposed victory over Napoleon. They arrived in London in a chaise-and-four drawn by horses decorated with laurels while they all wore the white cockade of the House of Bourbon in their hats. As they drove through the streets of the city, they periodically tossed handbills from the chaise which read "Vive le Roi! Vivent les Bourbons!" Once again, the prices of government securities rose, to even greater heights. However, by the end of the day, government officials announced that the news of Napoleon’s death and the Bourbon restoration to power were totally false and the prices of government securities quickly fell back to below their original levels. But by then, the conspirators had taken their profits.


Investigation

The Committee of the Stock Exchange, suspecting deliberate stock manipulation, launched an investigation into the hoax. It was soon discovered that there had been a sale that Monday of more than £1.1 million of two government-based stocks, most of it purchased the previous week. Three people connected with that purchase were charged with the fraud: Lord Cochrane, a Radical member of Parliament and well-known naval hero, his uncle the Hon. Andrew Cochrane-Johnstone, and Richard Butt, Lord Cochrane's financial advisor. Captain Random de Berenger, who had posed both as du Bourg and as one of the French officers, was soon arrested, and a guilty verdict was returned against all three charged in the case. The chief conspirators were sentenced to twelve months of prison time, a fine of £1,000 each, and an hour in the public pillory. Lord Cochrane was also stripped of his naval rank and expelled from the Order of the Bath.

Culpability of Lord Cochrane

Though convicted of the fraud, Lord Cochrane continued to assert his innocence. In 1816, he brought an (unsuccessful) charge of "partiality, misrepresentation, injustice and oppression" against Lord Ellenborough, the presiding judge in his case. Popular opinion certainly backed Cochrane; his sentencing was followed by his re-election to the House of Commons for Westminster, and, due to public outcry over his treatment, the punishment of the pillory was officially discontinued in Britain.

Lord Cochrane continued to petition the government for redress; in 1832, he was granted a free pardon, including reinstatement to his rank of Rear Admiral. Restoration of the Order of the Bath and other honors followed in the subsequent decades, and, in 1877, a Select Committee found that his treatment since 1832 constituted "nothing less than a public recognition by those Governments of his innocence."



Napoleon Fate

As for Napoleon? Paris was captured by the coalition in March 1814, and Napoleon was forced to abdicate in April, and later he has been exiled to Elba.

As the fraudsters had claimed just a couple of months too early, the Bourbon Monarchy was restored. Government bonds rose on the news.



Sources and Additional Information:



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