The British Wild-cats
London, May 1, 1857
The inquiry of the Court of Bankruptcy into the mysteries of the Royal British Bank is well nigh drawing to a close, and a more complete exposure of the recklessness, the hypocrisy, the shams and the infamies that lie hidden under the gilded outside of respectable society, has perhaps not been made since the days of Hudson the railway king's downfall. One of the gentlemen last summoned to the pillory of public opinion is Mr. Humphrey Brown, late M. P. for Tewkesbury, described in Dodd's Parliamentary Companion for 1855 "as a merchant," an "active promoter of railways," a "known railway statist and traffic taker," a "supporter of free-trade principles in the fullest sense," and a "Liberal to boot." Immediately after the burst of the Royal British Bank bubble, it became known that this influential personage had used his position as a Director of the Bank for swindling the latter out of some £70,000 sterling—which revelation, however, was not allowed to interfere any way with his customary State functions. Humphrey Brown quietly continued to make his appearance in the House of Commons, as well as on the benches of the "Great Unpaid." He even gave public vent to his high sense of social responsibility by inflicting, in his quality as a county magistrate, the most severe punishment allowed by law on a poor carrier, who had happened to embezzle a small quantity of potatoes, and by administering to the culprit an unctuous sermon about the atrociousness of a breach of trust. A Tewkesbury paper thought itself warranted to improve the opportunity for finding fault with that peculiarity of the British institutions which makes great thieves the judges of small ones. Mr. Brown then threatened not only to bring the unhappy journalist to trial, but forever to turn his back on the good town of Tewkesbury, should its inhabitants fail in expiating the crime of insulted innocence by some solemn act of contrition. Accordingly there was a triumphal procession offered to the "victim of an unscrupulous conspiracy," a testimonial which, to judge by the descriptions printed at the time in the public papers, made up for its artistic shortcomings by metallic heaviness. Mr. Brown harangued the multitude from his balcony, pocketed the testimonial, declared, but for the oath binding him to secrecy in respect to the affairs of the British Bank, his innocence would appear clear as the sun at noon-day, and wound up his oration by calling himself a man more sinned against than sinning. During the last general election he stepped forward anew, as a parliamentary candidate for his snug borough, but the Cabinet, of which he had always proved a staunch partisan, was ungrateful enough to drop him.
On the 29th of April this pompous gentleman felt rescued at last from the thraldom of the oath which till now had sealed his lips, and condemned him to endure the obloquy of disgraceful slander; the Commissioner of the Court of Bankruptcy acting as his confessor. It is a general rule with joint-stock companies that their directors should possess a certain number of their shares. Mr. Brown, inverting the common order of things, became first a director and then a stockholder; but, if he held the shares, he dispensed with paying for them. He got at their possession by the following very simple method: Mr. Cameron, the fugitive manager of the British Bank, handed over to him twenty shares, of the amount of £1,000, while he (Brown) handed over to Mr. Cameron a promissory note for the amount of £1,000, on account of which he took great care never to pay one single shilling. Having become a director in the month of February, 1853, he began his banking operations in the month of March. He deposited in the Bank the handy sum of £18 14s., and on the very same day borrowed from it on a note of hand the sum of £2,000, thus proving himself at once to be no new hand in the directorial management of joint-stock companies. In fact, before and after his connection with the Royal British Bank, he honored with his directorial management the chartered Australian Importing and Refining Company, the Patent Waterproof Brick and Tile and Common Brick and Tile Company, the Wandle Water-Works Company, a Land Company, a Dock Company—in one word, companies for all the four elements. On the question of Linklater, the solicitor for the assignees, as to what had become of all these companies, Brown pertinently answered, "They are defunct, so far as this." His account with the British Bank, which began with £18 14s. paid in to his credit, ended in £77,000 standing to his debit. All these advances were made through Mr. Cameron, without the consent of the "other Directors being asked for."
"The executive officer of the Company," says Mr. Brown, "is the person through whom all the business is done. Such was the practice of this Bank, and," as he adds doctorally, "a very wholesome one it is."[a]
The truth seems to be, that the whole concern, governors, directors, managers, solicitors and accountants, were, after a preconcerted plan, playing into each other's hands, and that every one affected to ignore the share of the booty accruing to each partner. Ay, Mr. Brown is not very far from intimating that, as a Director of the Bank, he was hardly aware of his own doings as its customer. As to the customers not belonging to the managing staff, Mr. Brown seems, during his examination, still to labor under the painful impression that some of them dared encroach upon the directorial immunities. Thus he declares in respect to a Mr. Oliver:
"I have no hesitation in saying Oliver swindled the Bank out of £20,000. It is a very strong term to use, but I have no doubt about its correctness. He was a swindler."
On Mr. Linklater's asking "What were you?" he composedly replies, "Unfortunately a director, much in the dark." All his answers- go this same calm way. The ridiculous disproportion, for instance, between his deposits and his discounts, gives occasion for the following curious dialogue between himself and Mr. Linklater:
Mr. Linklater—Was it not one of the regular terms of the business of the Bank, that no person should have a discount account who had not also a drawing account; and on the drawing account ,there should always be kept a balance of one fourth of the bills current upon your discount?
Mr. Brown—It was so, and that was the Scotch system, as they told me.
Mr. Linklater—It was a system that you did not adopt?
Mr. Brown—I did not, because it was unsound.
Whenever Mr. Brown condescended to tender securities to the Bank, they consisted of notes of hand, or of ships which he took good care at the same time to have mortgaged to other people, as he generally quite freely disposed of the securities, by what the Commissioner had the hardihood to call most "fraudulent transactions." On the first of March, 1856, Mr. Brown had virtually closed his account with the Bank; that is to say, the Board of Directors had decided upon no longer allowing him to run up his debts. Yet, on the 7th of June, we find him again getting £1,020 out of it. To Mr. Linklater's question, "by what hocus-pocus he had managed that affair?" he coolly replies, "There was no difficulty."
From the following letter, addressed by him to his bosom friend Mr. Cameron, may be inferred his general opinion about the storm of indignation the Royal British Bank disclosures roused in the public press:
"LITTLE SMITH STREET, WESTMINSTER. Oct. 5. 1855.
"DEAR MR. CAMERON: Not knowing your whereabouts at the time, I take the chance of sending this through some member of your family. As sorry news travels fast, I conclude you are no stranger to the vituperation heaped upon us in all the papers, both great and small, myself and you having the lion's share. I have some reason for believing that the very violent articles in the Times have been instigated by one or two of our associates, through the accountant. I am quite in ignorance of what is going on, except through the public reports, the reading of which makes me almost conclude that no one ever owed a bank any money before, and that all former intimations were made in error, and that the whole wrath of The Times was reserved for our individual injury.... I have not seen any other directors since the Bank stopped, which was a bungling piece of work.
As if "no one ever owed a bank any money before!" Mr. Brown apparently considers all the moral indignation washed on him and his associates as mere conventional cant. "Each thing's a thief!" So says Timon[b], and so Mr. Brown, and seems persuaded, in the depth of his soul, that every member of what is called respectable society says so. The only important thing is to be no petty thief.
Written on May 1, 1857
First published in the New-York Daily Tribune, No. 5015, May 16, 1857
Reprinted in the New-York Semi-Weekly Tribune, No. 1250, May 19, 1857
Reproduced from the New-York Daily Tribune
Here and below Marx quotes from the report on the inquiry into the causes of bankruptcy of the Royal British Bank published in The Times, No. 22668, April 30, 1857.—Ed.
Shakespeare, Timon of Athens, Act IV, Scene 3.—Ed.
The "Great Unpaid"-magistrates or justices.
Source: Marx and Engels Collected Works, Volume 15
(pp.266-269), Progress Publishers, Moscow 1980