MONEY MARKET.

STOCK EXCHANGE, PRIME AFTERNOON.

The discovery of an extensive fraud in the issue of Exchequer Bills has engaged the attention of the monied public almost to the exclusion of every other subject. But before going into the details of this transaction, it would perhaps be as well to explain the mode in which thes securities circulate and are exchanged, in order that those of our readers who are not familiar with such affairs may the better comprehend the following narrative.

It is well known that Exchequer Bills are acknowledgments for money due to the holder from the public; that they are issued in sums of 1001., 2001., 3004 5004 and 1,0001. each ; bear an interest of 2id. per cent, per diem, or 31. 7s. 6d. per cent, per annum ; and are signed by the Comptroller-General of the Exchequer, whose signature guarantees their authenticity. These bills are issued under the authority of an act of Parliament, and are sold in the public money-market, generally at a premium of a few shilling's per cent.; and the interest is reckoned from the date of the bill to the day of purchase : this interest is paid by the purchaser to the seller, who on a resale receives in like manner the additional interest that has accrued from the day of his purchase to the period of such resale. It should be added, that the hills are all payable to bearer; and thus pass from hand to hand by mere delivery, without any transfer or en- dorsement. These securities are generally at a premium-; but as, when money is scarce, they sometimes fall below par, any great depreciation of them is pre- vented by a statemeut on the face of the bill that it will be received at par when of twelve months' date, in all payments made into the Exchequer. This clause, however, is practically inoperative, as the bills themselves are always called in annually and new ones issued. The periods for calling them in used to be four times a year ; but latterly it has been found convenient to call the bills in only twice a year—in March and June ; at which time Parliament is generally sitting. It will be seen that, from their nature, these securities are very eligible for persons who are occasionally in the temporary possession of sums of money ; and hence they are held largely by public companies, bankers, and capitalists, as, when any sudden call for money arises, it is easily obtainable by loan upon the security of Exchequer Bills—they have, in fact, nearly all the currency of bank-notes, and are nearly as available as money. It has been known for many months, that parties have been in the habit of bor- rowing large sums of money on the security of Exchequer Bills, which, it now appears, are all forged or spurious, at very high rates of interest, frequently pay- ing from 6 to 10 per cent. interest upon the loan, while it will be seen above that the securities themselves do not yield more than 3* per cent. A great anxiety was always manifested by the parties borrowing to secure the return of Me identical bills deposited as security ; and as they have always hitherto been enabled to pay off one loan by raising another, it is believed that none of the bills have ever been sold in the market. The multiplicity of the loans at length raised suspicion; and some of the capitalists becoming alarmed, refused to continue thew advances. It was therefore necessary that fresh lenders should be found, to prevent the necessity of the sale of the bills and probable discovery of the fraud. Among the persons so applied to, was a wealthy mem- ber of the Stock Exchange ; who upon being asked whether he was desirousof advancing money upon 20,006/. Exchequer Bills at .6 per cent. for three months, expressed his willingness to do so, provided he was sure of the respect- ability of the party requiring the loan. It was then proposed to extend the amount to 60,000/. ; at which he hesitated ; and finally declined, when, upon the name of the intended borrower being disclosed, he found that he also is a member of the Stock Exchange, between whom and himself an acquaintance

existed, and who, supposing the transaction to have been regular, needed not the intervention of a third party to conclude the arrangement. Suspicion being thus aroused, inquiry ensued ; and it appeared that many bankers and capitalists had advanced money upon Exchequer Bills, in sums varying from 2,000/. or 3,000/. to 20,000/. or even 40,0001.

The gentleman in question lost no time in communicating with the Chan- cellor of the Exchequer ; stating that, from the nature of the transactions

connected with these Exchequer Bills, there was a reasonable ground for sup- posing that some forgery or fraud had been committed in the issue. His com- munication was promptly attended to : Mr. GOULBDRN immediately granted him an interview ; and the result was the commencement of an investigation,

in which, after tracking the operations of several inferior agents, the bills were all traced to an individual filling a subordinate situation in one of the Mining Companies in the City ; and he without hesitation named as his employer, a gentleman who has been long known in the neighbourhood of the Stock Ex- change as an extensive speculator in Spanish Stock, and who gained some nd- toriety by his connexion with the mad attempt of Prince Louis Nazoixon in the August of last year. With the other links of the chain we are not at present acquainted ; but the ultimate result of the investigation has been the apprehension of one of the officers of the Exchequer, Mr. BEAU-

stony &trim, to whom the bills have been traced, for the forged or fraudu- lent issue of the bills in question. It is not yet certain to what extent the fraud has been carried ; the amount of bills issued being variously stated

at from 150,000/. to 350,000/. The parties through whom the loans have been chiefly raised are two brokers in the Stock Exchange, who have for some time been largely concerned in extensive speculation, in Spanish and

other Stocks. There is not, however, the slightest shadow of an imputation upon either of them ; as they have merely done what is the ordinary course of business — namely, to borrow money on securities. Many of the bills that were considered tainted were sent into the Bank in pay- ment of instalments upon the Scrip of the recent funding; and up to Wed- nesday all Exchequer Bills were indiscriminately received for that purpose ; but since yesterday, the Bank refuse to issue the new Stock until it has been ascertained by inquiry at the Exchequer that the bills tendered in payment are genuine; and have given notice to some of the parties who sent in bills to

the extent of 60,000/., that they have been impounded by the Exchequer as spurious. The alarm is consequently very great ; and one of the holders sold

two bills of 1,000/. each ler 1,8001., thus submitting to a sacrifice of 10 per cent A notice was yestrrday issued by the Bank, giving the numbers of the bills held by them received direct from the Exchequer; and it is intimated, though not broadly stated, that any duplicates of these numbers must be for-. genies. A notice has also been issued by the Government, but it is loosely worded, and leaves the subject nearly where it was.

It should be stated, that it has been the practice for the Comptrollers-Gene- ral of the Exchequer to allow the Assistant-Comptrollers to sign the bills in their names ; that Mr. EDEN used to sign the names of Lord GRENVILLE and Sir Jona NEWPORT, Lord MONTEAGLE'S predecessors ; and that he continued to sign Lord MONTEAGLE'S name until that duty was recently taken by Mr. PERCIVAL. Mr. SMITH, the officer implicated in the forgery, is the Senior Clerk in the Office for the Issue of Exchequer Bills.

The bills said to be spurious are to all appearance similar to the sTintine ones; being printed on the same paper, bearing the same stamp, and signed "Mown- EAGLE." Mr. SMITH, from his situation, had great facilities for the com-

mission of such a fraud; but the exact mode in which he procured the bills has not been discovered : it is not consequently known whether the signature is

forged, or whether it was obtained under a false representation. The party

above alluded to as an extensive speculator has declared, that he received the bills in a perfect state from Mr. Sara—that is, with the numbers filled in, and the signature complete. The mode of conducting the business at the Exchequer has been long known to be faulty ; but it would appear from what has recently transpired, that it is extremely so,—for, apart from thy irregularity of allowing a subordinate to sign the name of his principal instead

of signing by procuration, there can have been no sufficient custody of the engraved forms, which, when filled up, become Exchequer Bills; otherwise it would have been impossible for a clerk, who is only at the head of a depart- ment, to have got possession of them in sufficient number to have committed so extensive a fraud as the present.

In addition to the notice above referred to, another has appeared from the Exchequer, signed by the Comptroller-General; in which the holders of Ex- chequer Bills are requested to present them, under certain formalities, to be examined ; when the genuine bills will be stamped as such and returned to the owners. It is then stated with reference to the spurious bills, that "those in- struments purporting to be bills, which do not correspond with the contrefoils, will be retained, to await the directions of the Treasury; but for these a re- ceipt will be given." The prevailing opinion seems now to be, that the Govern- ment will ultimately find it necessary to adopt all the bills, as having been issued from the Exchequer and bearing the usual Exchequer stamp, which is acknowledged as genuine on all that have yet been exhibited, although the signature may be forged. Not a single bargain has occurred today in Exchequer Bills; and until the examination of the whole of the bills now in circulation be completed, the Committee of the Stock Exchange have determined not to allow any bargains to be quoted in the official list. The Funds were steady during the early part of the week, until Wednesday ; when a large purchase for Money of all the current descriptions of Stock caused a rise of per cent Consols for Money reached ssi ; while for Account the price was as high as 84. New Three-and-a-half per Cents.,

the scarcity of which we noticed last week, also improved on that day, in the face of a sale of 54,0004 to 981. The intelligence of the forgery of the Ex- chequer Bills, however, produced a decline; and when the notice of the num- bers held by the Bank was published yesterday afternoon, and it became known that some of the bills paid into the Bank had been impounded as forgeries, the alarm was excessive : Consols for Account fell to 88/, and have today been at 88. The market has improved, however, in the course of the afternoon, and closes at 881 1.

In the Foreign Market, the business has been on a very confined scale ; an prices have, with the exception of Brazilian Bonds, not varied ma- terially from those of last week. These latter have experienced a rise of more than 5 per cent., in consequence of some extensive purchases by an -emiaent capitalist, to whose previous sales of a large quantity of Stock a few months ago the depression of the market from 68 to 62 was mainly attribut- able. The price, which was on Satur lay 52, has been 57, but has since given way, and is now from 55 to 56. Dutch Two-and-a-half per Cents, rose to 511, with the improvement of the English Funds on Wednesday ; but have again de- clined about 1 per cent. The transactions in Portuguese Bonds have been few and unimportant. So have those in Columbian and Mexican : the latter are, however, at an improvement of / per cent. Spanish Active has not fluctuated materially ; and after being at 20/ and 201, closes today at 201 I. The intel- ligence from Spain is favourable ; but under the existing state of alarm in the money-market, all speculation is at an end.

The Railway Shares are heavy. A fall of a cutting near Merstbain, on the Brighton line, has caused a decline in the Shares, which have been as low as 16 discount : they have since improved slightly, and are now 15/ discount. Ssrcainty. Twzams o'cr.ocrr. The intelligence of the acquittal of APLEon and the release of Colonel GriocaN has caused a decided improvement in the Funds. Consols for Ac- count opened at 881, and have since been at 881; while for Money the first price was 881, and has since been 881: the present quotation is 881 1 for Money, and 881 1 for Account. No business doing in Exchequer Bills : it is difficult, nay almost impossible, now to borrow money upon these once favourite Se- curities.

The Foreign Funds are all higher. Mexican, 25 to 1, an improvement of nearly 1 per cent. ; Columbian, 191 ; Dutch Two-and-a-balf, 51/ ; Spanish Active have been 201, but are 201 a ; all these quotations being an improve- ment of from 1 to 1 per cent. Railway Shares are firmer. Birmingham, 65 67 prem.; Great Western, 12 to 14 prem.; South-Western, 52/. per Share ; Brighton, 35/. per Share, equiva- lent to 15 discount.

SATURDAY. Foca o'Cionr. The only circumstance that has transpired during the afternoon with respect to the Exchequer Bill fraud is, that little doubt can be entertained that it has been carried to the extent of 300,0001.; loans to that extent being known to have been made to the brokers and agents of the parties whose connexion with Mr. Surru is now established. The delay occasioned in testing the validity of the Exchequer Bills now current will produce the most disastrous consequences. Until this investigation be completed, upwards of 20,000,000/. of property will be locked up, as until that time it will be impossible to borrow money upon or sell Exchequer Bills, and the utter ruin of many persons must ensue. The business transacted this afternoon has not been important : prices gene- rally are the same as in the morning. Consols for Money close at 881 1, and for Account at 8.4 4. In the Foreign Market, also, prices are steady ; and also in the Railway Shares. Indeed business seems almost at a stand, in con- sequence of the uncertainty in which every thing like credit is placed under present circumstances.

.3 per Cent. Consols 881 4. Columbian 6 per Cents

19 4

Ditto for Account 884 4 Danish 3 per Cents 781 9 3 per Cent. Reduced ...

874 i Dutch 24 per Cents .

514 4 31 per Cent. Ditto 961 Mexican 5 per Cents. Cousd. 25 4 New 34 per Cents 984 4

PortugueseRegency b per Cts. 294 4

Bank Stock 163 4 Ditto New Spar Cents. 1811.. 25 Exchequer Bills — Ditto 3 per Cents 181

-India Stock

2444 Rassian 5 per Cents ..... ... 112 113 Brazilian 5 per Cents 55 7 Spanish (Active) 204 4 Belgian Spar Cents 1024 3

Every moment brings to light some circumstance more extraordinary than another connected with the Exchequer Bill fraud. It now appears that the spurious bills have been in circulation for three or four years; and during that period, at least three exchanges have occurred at the Exchequer Bill Office, and consequently one set of bills must have been as many times withdrawn from circulation and fresh ones issued. There is also little doubt that a great portion of the money employed in the expedition of Louts NAPOLEON was raised by way of loan upon the bills in question. The exposure of the mode of conducting business in the Exchequer Bill Office, consequent upon the discovery of this fraud, proves that the system is most absurd and prepos- terous. The forms for Exchequer Bills are, it appears, bound up in books in a manner similar to bankers' checks; and when numbered, signed, and filled up, are cut out with a knife of a peculiar form, which gives the margin a wavy outline. It appears that the only test of the accuracy of the bill is the correspondence of its number with that filled in on the margin of the book, and the fitting of the bill itself into the place from which It is cut—which is called, in Exchequer language, " agreeing with the contrefoil." From what fol- lows, and for the truth of which we pledge our:elves, it is clear that there exists scarcely any teat of the accuracy of the bills. Yesterday morning, a gentleman from a West-end banking-house attended at the Exchequer Bill Office, in ac- cordance with the first notice issued, and presented a number of bills for ex- amination, which, on being compared with the contrefoils, were found correct. He requested to have the bills stamped ; but was informed by the clerks that it could not be done. Ile then saw Lord MONTEAG LE, and reiterated his request : it was refused by his Lordship, on the ground that he had no instructions from the Chancellor of the Exchequer ; but, his Lordship remarked, there was no cause for uneasiness, as the bills corresponded with the contrefoils. The banker said, all he wanted was his Lordship's assurance that the bills were genuine. Lord MONTEAG LE replied, "I do not say that they are genuine; I only say that they agree with the contrefoil."