CAUGHT AT LAST.

New Zealand Herald, Volume XXXI, Issue 9455, 10 March 1894, Page 2 (Supplement)

CAUGHT AT LAST.

THE END OF AN EXCITING CHAPTER. FLIGHT AND CAPTURE OF JABEZ BALFOUR. Ok Monday evening, January 22, London was startled by the sensational news fcbafc i Jabez Spencer Balfour had ab lasb been i captured by the English police. His arrest 1 concludes one of the most adventurous chapters in an extraordinary career, and the method in which it was effected is thus described by a correspondent of a London paper:—Mr. Bridgete, the British Consul ab Buenos Ayres, left there last Monday, and arrested Mr. Jabez Spencer Balfour in the province of Jujuy, where ho had purchased a brewery. Before Mr. Balfour's extradition is granted, he must meet the obligations) ho has contracted at Buenos Ayres. The British case Jabez Balfour was set out and arranged in May last, when it was almost certain that the Argentine Republic would allow the arrest. Th« documents were sent to Buenos Ayres, and the British Consul can act upon them without special assistance from home.

HIS LIFE IN ARGENTINA. It is very probable that had it nob been for the interest manifested in the matter by an Argontine paper, .this hypocrite of tho century wonld be still at large. When he first took up his residence in Buenos Ayres the proprietors of that journal, acting on information suppliod to them from London, ferreted out Balfour, and exercised such a strict surveillance over his every movement that he began to suspact he was shadowed, and that Buenos Ayres was not quite the correct place for him to live in, notwithstanding the non-existence of any extradition between Argentina and Great Britain. It is problematical, however, whether any capture would ever have been effected had he chosen to live quietly and comfortably—as he could have done—at some comparatively unknown town, instead of ostentatiously and, regardless of precautionary measures, within easy distance of the capital. The tales thab had been circulated that Balfour was dwelling in a mansion

GUARDED BY A TOSSK OF POLIOK are, I believe, pure fabrications, and are highly improbable. At any rate, no confirmation of them lias been forwarded to me, though the most recent statement that he has been living in semi-Sultanic luxury appears to contain some substratum of truth, especially if the torni " semi-Sultanic luxury" is to be interpreted " ostentatious." Since Balfour took a regretful leave of Buenos Ayres, he has exercised littlo care to conceal either his identity or his whereabouts, and though various places have been suggested as his retreat, he really transferred his effects to Jujuy. where, as stated, ho purchased a brewery. By whatever name he may be called, he certainly does not merit- the epithet " lazy," and seeing a brewery which was by no means a large concern, and which, when transferred, was not in a very flourishing condition, lie took the opportunity of becoming possessed of it. He quickly discerned its capabilities, and turned his attention to working it in order to replenish his steadily diminishing exchequer. A copy of the Christmas Number of the Review of Reviews, dealing with the Balfour group of companies, was sent to him at Jujuy.

THE HISTORY OF THE CRASH. Jabez Spencer Balfour is in his fifty-first year. He was born in London, his father, Mr. James Balfour, being a marine storedealer in Chelsea, but much more widely known as a teetotaller and an advocate ot temperance not only in this country, but in the Channel Islands, and among English navvies in Franco and in the south of England ; wnile his mother, Miss Clara Lucas Balfour, earned no small reputation both as a speaker and writer on temperance and religion. It was their son's affected deep interest in these causes tnat to a large extent secured for him the confidence of the many thousands who wore afterwards ruined by his schemes. He entered Parliament as a Radical, sitting first for Tamworth from ISSO to ISSS, was subsequent}* unsuccessful at Croydon and Newington, was then returned unopposed for Burnley ».b a byeelection in 1889, and lastly, by a large majority, headed the poll for the same borough in 1892. He had in the meantime been elected as the first mayor of the new borough of Croydon, and when he entered the House of Commons it was as the

"CHAMWON DIRECTOR," having a Beat on the boards of no fower than 13 companies. Astounding as ib may seem, ib is nevertheless true that Mr. Balfour, M.P., had found his opportunity in the ruin of a group of societies as like his own as two peas. The Liberator was a phoenix that sprang from the ashes of the Alliance National Land, Building, and Investment Society, with which two of his later colloaguos, the Rev. Dawson Burns and Mr. Dibley, were associated—the former having acted as auditor —and the Estates Bank, and a number of other allied concerns known as tho Alliance Group. These undertakings were popularly associated with the United Kingdom Alliance, though after the crash the latter body very emphatically declared that the companies had no connection with its organisation. Tho bank closed its doors in 18GG, and widespread distress was the result, attracting too little attention amid the more colossal failures of that disastrous year. Yeb the whole Alliance Group had been formed to afford safe investment for the funds of thrifty temperance adherents, and Jabez Balfour, so far from being discouraged by its fate, found in it the idea of all his future operations. The Alliance Group had ingeniously suggested temperance, and the Alliance of Manchester, therefore, said Jabez, we must revive this principle :

JOIN TEMPERANCE AND RELIGION, and appeal to the same saving classes. Having previously had some experience in the office of a firm of Parliamentary agents, he cams modestly before the world in 1807 as the virtual founder of the Lands Allot-

menb Company, from which seven months later was developed the Liberator Building Society. In starting these companies it was, of course, declared that, they were essentially safe, because their main business was " the legitimate one of a building society." In 1875 another association was hatched, the " Lands Allotment Company," with practically the same directorate, and Mr. Jabez Spencer Balfour as the controlling genius. The relations between these were extensive and peculiar ; in five years the Liberator had financed the other two to the extent of £192,000; its shareholders and depositors knew little, if anything, of tho state of affairs, while according to the examination in the Bankruptcy Court, its leading directors and officials were equally innocent; of all knowledge—the one thing in which they all agreed being implicit and unlimited confidence in

MR. BALFOUR."

From this period onward there was a regular succession of new companies. Jb has been well said that the secret of

Balfourian finance was, " When in difficulty start a new company." Thus there followed in succession Hobbs and Co., the London and General Bank, the Building Securities Company, George Newman and Company, the Real Estates Company, and the Sheringham Development Company. In most of these concerns there was a regularly paid dividend of 5 per cent, to the shareholders, and 4 per cent, to depositors. The recklessness of financing was norer surpassed. Balfour discovered a progressive builder at Croydon named Hobbs, a man in a comparatively small way of business in 1878, and a member of the House and Lands Trust. Such large amounts wore advanced to Hobbs that in 1885, when he was practically insolvent, he owed the Liberator £700,000, and the Building Securities Company and Hobbs and Co. (Limited) were successfully started to take up the concern. Finally, when Hobbs failed—having in the meantime constructed those huge blocks, the Whitehall Court on the Thames embankment, Hyde Park Court, the Salisbury Estate building, Carlisle Mansions, and others—this limited concern was indebted to the Liberator to the extent of £2,000, From 1885 onward there was no choice but to make, fresh and ever fresh advances to Hobbs, and the parent company had to forego its claims and negotiate fir3t, second, and third mortgages in from; of its own. The system on which this Was done was simplicity itself. Each new company took over some of the liabilities of the old ones, and these were put down as so many successful transactions, severally yielding a handsome profit and splendid security—or, as the phrase went,

V A LARGE AND NOBLE PROPERTY? —to the Liberator. Apart) from these transactions, " the Balfour , Group" were financing properties of a more or leas speculative character all over the country. There were the Ilford, Tilbury, and the Romford estates, Meerebrook Park, the Billiter-streeb property, the Hockley Hall, Colliery, and sundry chemical works. All these involved scores of thousands of pounds, paid apparently with a magnificent disregard to real value. The advances to friends were on an equally liberal scale. The sum of £47,000 was allowed to a Mr. Kenyon Benham, who alleged thab he had an interest in a will said to have been lost on the underground railway, but never legally proved. Mr. Richard Kenyon Benhaln and Mr. Albert Bennett Benham, for their share in these proceedings, including the forgery of the will, are undergoing terms of 14 and five years' penal servitude respectively. Space would fail to tell of the manner in which the Balfour Group financed Newman,

ANOTHER PROGRESSIVE BUILDER, who was also formed, like Hobbs, into a limited company. Newman has been sentenced to five years' Hobbs bo 12 years', and Henry Granville Wright;, a solicitor, intimately mixed up with all these proceedings, to 12years' penal servitude. Though disaster followed these concerns from first to last, dividends were always found in the new subscriptions and deposits, and directors' remuneration never failed. Under the latter head Jabez Balfour and his colleagues divided among thorn from the seven leading companies a total of £178,554. Tho subjoined capital account of these concerns will show the amounb of rum which their collapse involved • Liberator — Shareholders ... „ £1,661,005 Depositors 1,052, m £3,313,357 Lands Allotment Company, subscribed capita ... .. 763,210 House and Lands Trust— Shareholders .. _ £72,145 Depositors .. .. 1,631,346 1,053,190 Building Securities Company, subscribed capital .. 263,735 Hobbs and Co., subscribed capital _ 61,162 Total „ .. „ _ „ £0,057,954 This is not, indeed, the whole account. With some subsidiary items, it has been reckoned in connection with the liquidation proceedings, thab the total in question siightlyoxcoeds seven millions. Not in the present generation has there been a financial failure bringing in its train such

PROFOUND AND WIDESPREAD MISERY a3 that of the Balfour Group. The shareholders and depositors were largely of the middle and lower middle-class, who had trusted the savings of a lifetime in these rotten societies. Thousands of these have been absolutely impoverished, and have applied for relief from the funds generously raided for tho purpose. Of these 1414 were women. The following table of Balfour's women victims may bo of interest):— Married... — 161 .Single .. _ .. ... .. t's2 Widows.. _ „ _ GUI 1411 Tho ages of tho male and female applicants for charity ran thus :— Under sixty .. ... _ .. 1070 . Sixty to seventy .. .. „ 63a Seventy to eighty 37i! Over eighty .. .. _ ... 57 2035 The total loss of those victims for relief was £5'J5,345; and these, it is to bo remembered, represented only a twelfth of the total savings engulfed in the companies financed and managed by .Mr. Jabez Spencer Balfour, ex-M.P. for Burnley !