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
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