Shilly or Chalet Man?

The Diogenes Club is a strange collection of enquiring minds and often encourages its members to follow their noses wherever their occupations or interests take them. Stories from the Diogenes Club otherwise would be merely coffee table affairs. We are drawn to the world of intriguing phenomena and one arm of our collective enquiries is trying to piece together what has happened, from the traces that are left for those with eyes to see them.

A few years ago a reader of my own newspaper, a Mr Derek Stuart, prevailed upon me to investigate injustices he claimed to have suffered, and this led to this guarded publication here, following a couple of months activity:

http://web.mac.com/beachhutman/Beachhutman/Blog/Entries/2007/7/23_THIS_IS_ENGLAND!.html

The matter has never been resolved to my or his satisfaction, but it involved a steep learning curve, that has had Diogenes Club members open mouthed in disbelief.

Mr Stuart has since been accused of various misdeeds but my take on events is that whilst he has found himself in hot water for fighting the system and taking on extraordinary challenges, the required element of mens rea is not there to justify the claims of his accusers. Long may I be Sancho Panza to his adventures, for if only a tenth of what he claims is true, he is a hero of sorts. The clue, the thread, is Don Quixote, yet the reality is nearer “The Trial” by Franz Kafka. Maybe.

In the process of getting to this pass I have undergone training in investigative journalism, given evidence in court, seen a protagonist go to jail (twice) yet seen an innocent dupe go to prison too.

I have met some very interesting people and earned and actually enjoy a ‘certain’ reputation with the United Kingdom’s Police CID (amongst other agencies of the state no doubt).

All this without any detriments, arrests or convictions for myself, but possibly at the expense of the loss of a few civil liberties and a naiive confidence in the system one might expect to enjoy in a less threatening world.

I have come to realise there is a pecking order in the security world, and one’s span of activity is closely watched by others higher up the ‘chain’. Thank God this is England, and it is possible for a Quixotic animal like myself to learn what I have learned in safety and whilst ‘under the eye’ of a sympathetic
state that allows you a rope long enough to hang yourself if you do not act appropriately. Similarly the Diogenes Club, for they have kept a safe distance from events, looking for the clear blue sky others seek to preserve their thresholds for comfort and their reputations for fair dealing.

I may even have gained a certain reputation for fair dealing in certain quarters. At least three people think I work for the Security Services nowadays. So perhaps I was doing something right?

Anyway, here is a published example of the so called evidence gleaned from my enquiries using my (Chartered) Librarianship skills. I even hazarded a court appearance as a kind of expert witness, at least in the eyes of the litigant Mr Derek Stuart even if the noble judge could not restrain himself from a moment of astonishment. Otherwise, the Judge, Lord Meston, showed admirable restraint as I gave my evidence, and I hope he would not add a new sentence of his own (for contempt of court ) to my sentences repeated here. t I had furnished the court with my reportage both before the hearing in a “bundle” of evidence and after the hearing because the official record became lost.

My research was published contemporaneously yet has disappeared from its previous location without explanation. At least I can now publish it here, I believe, quite legally: on my own site.

For the avoidance of any doubt the reader of my Mudeford Sandbank Newspaper was Derek Stuart, former owner of one of the best houses overlooking Christchurch harbour, and Mr A L R (Bob) Morton was the buyer of said house, Mulberry Cottage.

I was paid £400 for this research. Which covered the expenses at the time.

Mr Stuart had been impressed by my grasp of another story, which happily remains in print here:

http://www.msbnews.co.uk/archives/msn7p1.html

...this was about a beach hut story involving in passing a couple of local estate agents he felt some irritation towards in his own world.

Anyway, enough about that minor story, here is something upon which I cut my journalistic teeth:... or so I thought...


Bournemouth County Court Claim No: BH303238

Background information on defendant Mr ("Bob") A L R Morton from public sources....(or why claimant Derek Graham Stuart is not paranoid).

Author Tim Baber, editor: www.msbnews.co.uk 26.08.2003


Arthur Leonard Robert (Bob) Morton, born February 11, 1942 and now aged 61, has as his main residence Wappenbury Hall, Wappenbury, Near Royal Leamington Spa, Warwickshire CV33 9DW. This mansion (a "stately pile" according to the Times on 30/07/02) was formerly the residence of Sir William Lyons, founder of Jaguar Motor Cars. Mr Morton is regarded as a successful serial entrepreneur, having at least a score of directorships (including several as Chairman) in areas involving and including computer security, physical security, military technology and nuclear contracting .

Notwithstanding Mr Morton's access to private security measures or other affiliations, including allegedly Masonic ones, that Mr Stuart believes have obstructed justice, I should at this early stage perhaps state I now personally believe that Mr Morton, is of sufficient importance to the national interest to be considered a "national asset" worthy of appropriate protection by the state. A far as I am aware Mr Stuart has done nothing illegal and my concerns extend to his alleged persecution being for inappropriate reasons connected with a cover up of an alleged fraud.

I also can legitimately ask whether he has adequate motives, means or opportunities to protect his own interests at the expense of the claimant, through his "empire"; or even suggest he is likely to be similarly protected by others, including even the state.
When the claimant argues he has been frustrated in seeking justice in the matter of Mulberry Cottage I see this as possible evidence for others conspiring on behalf of Mr Morton resulting in Mr Stuart finding at the very least evidence stolen, his human rights threatened and his reputation slandered leaving Mr Morton appearing to be "untouchable".

Mr Morton's companies often service blue-chip clients. He is a chartered accountant (FCA) and is regarded as an expert in mergers, acquisitions, consolidations and take-overs in the new technology sector.

His personal fortune was estimated to be some £175 to £200 millions at the height of the dotcom boom, and although public sources -
[on 07/06/2002 The Evening Standard had noted ..."collapsing share prices in Morton's portfolio have savaged his reputation as a sharp investor..."]
have suggested his fortune may now be a fraction of that;
["all of his Chairmanships have seen their share price go through some pretty chilling plunges over the past couple of weeks"...Accountancy Age March 6th, 2003...]
his son, Andrew Morton, reportedly stated to the claimant D G Stuart at a chance meeting on 15/08/2003 that his father had earned £200 million in the previous week.

Whilst company information, directorships and Chairmanships may change, most of the following is probably still current and is indicative, in any case, of Mr Morton's span of control, influence and connections over recent years. Financial matters are not really considered relevant, it is the functions of these companies that have been selected which are felt relevant.

Let us first look at an exception to his usual software stable, the company MacLellan Group PLC, formerly Morton's Jordec Group PLC and before that Baris Holdings PLC, also formed from the pedigree of Haden MacLellan. Morton became chairman on August 5th, 1996. Trade comment at the time was "Mr Morton, the Chairman, has a good business record, and has sunk plenty of his own money into the company" [source: companynews.co.uk] notwithstanding the writing off of a disputed 1996 decontamination contract on take-over.
According to the Independent (02/05/2001) MacLellan has facilities management responsibility (including opening the mail, security equipment and guards) for 700 buildings owned by the Customs and Excise and the Inland Revenue. There has also been in the past a contract with British Nuclear Fuels including the decommissioning of nuclear power plants. Devenport, Sellafield, Harwell, Dungeness and Trawsfynydd have been cited. New contracts worth £30billion pounds are anticipated for the nuclear clean-up at Sellafield according to the lead story in the Guardian 26/08/03. Airport baggage handling, at Gatwick and Heathrow, are another area of operations. (Peter Simonis, a non-executive director of MacLellan since 1992, died suddenly on 14 February 2000).

Then there is Harrier Group PLC, established in 1987. Mr Morton was appointed Chairman on 28/06/1996 owning through his British Virgin Islands trust (Southwind) some 8.5million shares. This company specialises in "high-end internet, networking and data security solutions" [source: Fame company Report]. Harrier Group specialises in authentication, encryption, secure data storage and public key infrastructure. All of these are highly valued and sensitive areas.
Its clients have included the BBC, BAA, Prudential, National Power and Vodaphone, amongst many other blue-chip clients. The Evening Standard noted on 7/06/2002 that ..."Chaired and 29.9% owned by legendary investor Bob Morton, Harrier has seen its shares plunge by 99% since the top of the dot com boom in February 2000."

Mr Morton is a stakeholder, through his British Virgin Islands family trust, in Cryptic Software which markets a "breakthrough computer anti-hacking system" to protect information from previously unknown "computer fraud, hacking and espionage".


BSoftB is perhaps the most interesting company that Mr Morton has chaired, although it was recently wound-up. BSoftB provided computer services or cabling services to, amongst others, the following clients: BAe Systems Marine, Devonport Naval Dockyard, First Hydro Ltd, French naval industries, British Nuclear Fuels PLC, The RAF (Joint Air Transport Evaluation Unit) Spanish naval industries, Vosper Thornycroft, the Computer Sciences Corporation and the Clarity Group.
Of these clients of BSoft B, a few facts or comments from public sources may help. Bae systems has world-wide military contracts producing annual sales of some £12 billion. Some 50 of the world's navies use their systems.
The privatised Devonport Royal Dockyard has an annual turnover of some £260 million. For Mr Morton and his clients, the need for commercial confidentiality, confidence and national security interests are, hopefully, obvious.
First Hydro Ltd is a hydro-electric company with 16km of underground tunnels in a Welsh mountain.
The RAF connection refers back to RAF Brize Norton, the RAF strike command and the RAF Air Warfare Centre with responsibilities for Defence Electronic Warfare and evaluation.
Vosper Thornycroft is a prime contractor for major warships world-wide.
The Computer Sciences Corporation are computer systems integration specialists with blue chip clients across all major industry sectors, including clients in aerospace and defence at home and abroad. They have a data outsourcing contract with the Royal Mail group valued at 2.4 billion pounds over 10 years. They also hold or have held contracts with BT and the US federal government and the US Defense Communications Agency.
In a vignette of the computer industry appearing on the web, Bob Bemer referring to a business alliance between computer giant UNIVAC and the Computer Sciences Corporation over which he presided as being..."in the smoke and mirrors period" and that "about the shenanigans, Roy Nutt or Bob Patrick would never have been involved. Very straight shooters. Patrick had probably left by that time, anyway...."

Incepta Group PLC was another company Bob Morton directed from 04/11/1992 to 31.03.2001. He stepped down as chairman in October 2000. It specialises in advertising, marketing and public relations for international clients with a subsidiary, Citigate, specialising in crisis management and global intelligence and security. Mr Morton was especially responsible for steering the Citigate acquisition which was completed by March 3rd 1997.

Citigate, with 78 offices world-wide and scores of subdivisions, rank competitor intelligence, hostile take-over defence, litigation intelligence, fraud investigation, threat assessment, security auditing, counterintelligence, asset searching, high tech investigations, executive protection, crisis management, media relations and employee vetting amongst its strengths.

Silvermines Group PLC is an Engineering and technology group of Mr Morton's former chairmanships which supplied the closed circuit TV for the extended Jubilee underground line. It's aerospace division (now sold off to Esterline Technologies in the US, had a contract in 1998 with GEC Marconi for project Siren, a missile decoy system. The Birmingham Post for 11/08/1998 indicated the company had won £2.5 million in orders in the Far East for its security division.

In a similar field is Future Integrated Telephony although Mr Morton's 14.6% investment in the troubled company and Chairmanship was overshadowed by a Department of Trade and Industry investigation [according to the Birmingham Post for 28/10/1999] into a number of current and former directors. Mr Morton was also noted to be Chairman of Just Results, a private company in the same sector from whom Morton had bought the shares.

Also in this field is Vislink PLC . Mr Morton was appointed to the board 09/10/2000 which specialises in broadcast technology, image processing, security solutions and satellite communications.


One software industry take-over involving Mr Morton, between Oneview.net by Freecom.net (Morton: at the time had a 16%stake in Freecom which today is Systems Union Group PLC- where he is Chairman - see below) reportedly descended into chaos [in the Birmingham Post 01/06/2000] where a spokesman for Mr Morton said" there was no question of fraud, but Oneview became a tainted company after what happened and Bob decided the best thing to do was to find a buyer for the whole group". [The upshot was that Oneview's directors agreed to hand back nine million Freecom shares].

The Systems Union Group has had Mr Morton as a director since 06/05/1995 and is a global software vendor, with offices or partners in 76 countries, having grown from Morton's Freecom.net, above. It has SunSystems, Pegasus and REDtechnology as its operating businesses. SunSystems software is available in 30 languages, being the eighth largest in the UK.

He is also the Chairman of Clarity Commerce Solutions which deals with sports and leisure management software for private and public (e.g.council) clients. Electronic Fund Transfer technology at Point of Sale (EFTPOS), i.e. electronic money, is a speciality. Here, again, there is a strong link with Sun Microsystems.

Mr Morton also has, or has had interests in Golf Club computing facilities and the Chairmanship of Interclubnet which supplies technology for a "total administrative solution" to football governing bodies globally...communicating at the highest level with the football industry.
Note: Andrew Jennings, investigative author formerly with the BBC and Granada's World in Action series, is an expert in sports, politics and international organised crime and has testified to the US senate in 1999 on Olympic scandals. He regards international sports bodies such as FIFA and the International Olympic Committee as suspect in facilitating international money laundering.

Mr Morton has had other interests, such as being formerly part of Vantis Morton Thornton...accountancy consultants specialising in networking and business clubs. Mr Morton purchased in February 2003, 15% of Tenon, a competitor in the consolidation field. On a city website www.financialdirector.co.uk, Morton is reported as saying he played no part in the management or investment decisions of Southwind, his family investment vehicle, [a trust registered in the British Virgin Islands to benefit his infant children, which bought 23 million shares at then an all time low price] Mr Morton is now 61 years old.

There are several other companies in which Mr Morton is either a director or past director, some of which have disappeared, changed name or been wound up. This research has been done as desk research only, and undoubtedly has some errors or omissions, which a proper search at Companies House could rectify.

Those featured above have been selected as arguably demonstrating he has both the means and the opportunity to protect his interests, or that others may do so on his behalf. This action may be irrespective of any so-called Masonic collusion for which I may have other comments to make in evidence, if required.
The required element of motive to protect his interests in a conspiracy might appear if Mr Stuart were to pursue and embarrass Mr Morton through the courts regarding the Mulberry Cottage alleged fraud.
Mr Stuart claims a subsequent comprehensive cover-up by various means has obstructed him and, ultimately, justice. I may have comments to make regarding this in evidence, if required.

Tim Baber 26/08/2003




UPDATE: On background information on defendant Mr “Bob” ALR Morton from public sources to be read in conjunction with witness statement of 26.08.2003 also by Tim Baber in case Bmth County Court .:. BH303238

Mr Stuart has asked me to relate any new developments since the previous statement which was contemporary to his claim.

I am happy to assist from ambient sources, although a professional would be able to improve upon this in particular in collating his many Chairmanships, directorships and shareholdings.

Looking over my files I am able to offer the following, some expressly at Mr Stuart’s request:

As I mentioned in the evidence I gave at Bournemouth Crown Court before Lord Meston, in London Lord Justice Hart previously disposed of two cases involving Mr Morton’s companies on the same day. Although I could draw no inference, Mr Stuart found this possibly significant.

Southwind Limited (BVI) is a family investment vehicle set up to benefit Mr Morton’s children and registered in the British Virgin Isles. On a city website Mr Morton is reported as saying he played no part in the management or investment decisions of Southwind. [www.financial director.co.uk] [5th August 2003]

Notwithstanding this in court evidence against Mr Stuart (who was persuaded to secretly transfer Mulberry Cottage to Southwind Limited…that is under a confidentiality agreement that I have discovered through familiarity with Mr Stuart’s paperwork), Mr Morton asserted in his statement that he has at all material times acted as it’s investment advisor“.

Accountancy Age has noted “have a look at some of the companies where Southwind invests and you can’t help but spot that Morton fills the role of non executive chairman.
“
Jersey
I expressed concerns about the apparent contradictions over Mr Morton’s role with Southwind (on the 16/02/04 by letter) to the UK Revenue and Customs.

I note Mr Morton has reportedly moved lock stock and Rolls Royce to Hawk House, (named after Westmead Hawk, his superb greyhound), in Jersey, Channel Islands in 2005 (source Pat Lay, This is Money 7 April 2005) .
I am unsure if these two events are unrelated.
(I was aware that Mr Morton’s company had at the time the facilities management/letter opening role at every Customs and Revenue office in the country, but proceeded undeterred!)
A Bahamas connection?
Mr Stuart informed me that he had telephoned Mr Morton apparently in the Bahamas to offer him back his deposit at the time of the auction of Mulberry Cottage.
A transcript of a Queens Bench Division trial between the discredited Bahamian company Guardian Trust Co Ltd v Davidson of 12/03/1991 refers to Southwind shares. This possible aspect, if any, of Southwind having any wider application is frankly beyond me, but is included for completeness.


Royal Armouries/Tower of London
Mr Morton is a director of the Royal Armouries (and a trustee of the Tower Of London), alongside a representative of HM the Queen.

MacLellan Group PLC: Mi5 connection/Interserve takeover scandal

Mr Morton’s former company MacLellan which in additiion to its secret state role mentioned before also provides industrial services/facilities management services to the Security Services, including Mi5.

But MacLellan has recently been sold to Interserve PLC for £118million in cash and shares. A dispute arose over a £25.9 million false accounting scandal by Interserve costing the vendors an anticipated £7million. Reuters reported Mr Morton said he was seeking compensation on an amicable basis, but if it can’t be done amicably we will try other means.

Morton’s reported interest in Silvermines should now read Vislink PLC which owns Active Imaging and is associated with the Bewator Group and has reported contracts with the British Army.

The £3.5 billion Jubilee line project in which one of Mr Morton’s companies was a security video contractor was noted (most recently according to the Shadow Attorney General at a fringe meeting I and Mr Stuart attended of the Conservative party) for a longshore fraud scandal that implicated many of the contracts awarded to contractors. I have notes on this but following the collapse of much of the case I would refer to Judge Anne Goddard, or Britain’s then most senior judge, Lord Woolf, or the Britsh Transport Police or Inspector Stephen Wooler or the CPS as the matter is complex. See the Guardian for 24/03/2005.

Whilst I could list all Mr Morton’s chairmanships, directorships and take a stab at his recorded share dealings I have not done this as his stable is complicated and changing. However, the following may be noted:

Lynx Group PLC
Provides financial software and data solutions for banks. Bob Morton is a shareholder. Also provides offshore finance solutions and operates for the emergency services etc. Not mentioned before but offshore finance expertise may be relevant in the following connection:

Interclub Net
My statement about international fraud and money laundering at the highest level of the Football industy, (where Mr Morton’s company provides software) has since been exposed within FIFA by investigative journalist Mr Andrew Jennings on Panorama. I predicted this following my attending an Investigative Reporting summer school in 2003 (and again in 2004) where I first heard and taped Mr Jennings on this subject.

Further comment:
Assisting Mr Stuart over the last four years I have become aware he has been removed from his evidence (against Mr Morton and his co-defendants) and vice versa. Also his access to witnesses has been frustrated and his chances of obtaining confessions has been circumvented.
The means used to cool him out or provoke him unwisely in his seeking justice and the persons concerned that have been discovered by me I have seperately reported to the courts and the CPS where I have personally become aware of them.
I name Roy Pack and Steven Hamilton and have similar concerns over Philip Moroney and Gerald Coulter, amongst others, in this regard.
This concern over the use of undue extra-legal influence on proceedings may possibly include Paul Goldin, (who is a stepfather of Steven Hamilton) giving rise to concerns of possible obstructions to justice at the level of a head of state with concerns in the direction of and in the person of Bertie Ahern. I have passed on my concerns in this matter to the CPS, here in the UK and the courts in Ireland, amongst others, as this is beyond my knowledge or competence.
When the opportunity has been taken I have public documents and private recordings I can offer in support of this assertion. I believe convictions have already resulted in this area with regard to Mr Hamilton at least. Matters are proceeding further so I regard the matter as sub judice.
Accordingly Mr Stuart and I latterly have become aware of a mini-industry of extra legal activity practiced in his and other cases, (leading far and wide), threatening in our view to obstruct the administration of justice and threaten the Queens peace in this and other cases Mr Stuart has tried to understand, at least.

Author: Tim Baber
Draft (2) of 31st October, 2006






For balance, I include this: I offered it to the judge when the official record of the case was “lost”. It was sent with the notes made in the courtroom to indicate any embellishments.




BOURNEMOUTH COUNTY COURT Date 21 October 2003

Claim Number BH303238
Claimant Derek Graham Stuart
Defendant Arthur Leonard Robert Morton Ref. TE/KF/E1137
Before His Honour JUDGE MESTON QC (Judgement made 23/10/03)


The following is from casual notes made by Tim Baber (of msbnews.co.uk) made in his notebook on the day of the hearing.

11.30am.


The judge asked if legal aid was available. On being told none was forthcoming Roy Pack asked to speak and said that if legal aid were to be forthcoming he would like to assist as a Mackenzie partner. The judge said there was no legal aid in this case. Mr Pack said "I think he (Stuart) needs some help, his best proposition is for postponement as he is not in a fit state to proceed".

Some debate ensued over the issue of a public funding certificate (Legal Aid) with Mr Stuart observing a solicitor (Coles Miller) had fabricated a debt against him to frustrate getting a certificate in the past and that , amongst others Letchers (solicitors) had recently refused to help Stuart with legal aid or to assist him to pursue some 150 people who Mr Stuart alleges have defrauded or conspred to defraud him.

Despite Mr Stuart citing Legal Aid officer Alan Edwards suggesting a certificate would be forthcoming the judge said Mr Suart was "highly unlikely to get legal aid" and earlier "you can't get legal aid". The judge agreed Mr Stuart would qualify in terms of means but would fail the merit argument. Mr Stuart said he should get legal aid because he "was entitled to it".

The judge said the claimant had not explained the case in detail to which Mr Stuart replied he had no legal representation, his documents had been stolen, witnesses had been threatened and that he had medical grounds. Mr Stuart said that one witness to how the fraud takes place...(disembowelling you of your property and being left homeless and penniless)...had just had his house burnt down. He also charged that the judge had (according to a lady court official) personally asked for the case. The judge replied "I have not in any way asked that this case be put in front of me" and that he had merely observed "it ought to remain down for me as I had read so much of the file".

At this point Mr Stuart said that since 1987 it was well known he had dealt with and investigated organised crime in Dorset, running a group which assists people which makes him an enemy of Freemasons and causes him lots of problems and that the judgements made by the judge had been unfair.

The judge replied that for the record he was not and have not ever been a Freemason., and that he had not made any judgements yet. Mr Stuart said that the judges requirement for a medical report and a police report had not been complied with in time and that he (Stuart) "was never going to get it". He said what he had had been obtained by by-passing the system. and requested an adjournment.

The judge then looked at the medical evidence. An appointment with Dr Chainey was not until the following Thursday - too late. A letter from Dr Gemmell mentioned Mr Stuarts "lack of concentration" Mr Mark Hardy, RMN was to offer evidence on Mr Stuarts medication regime and a Senior Practitioner reported on a recent change of medication.

The judge then referred to Mr Stuarts behaviour sending 74 Xmas cards in mid December 2000 (one copied in the Defendants bundle). Mr Stuart argued that the words "Goodbye for now" on the card was not a threat but he had been tipped off by a "Mr Smith" who "deals in the underworld" and earlier in August by a police officer that he (Stuart) was expected to be murdered, sectioned, kidnapped or imprisoned on false charges. The police officer suggested he "secrete his documents and lie low for a while".

Mr Stuart was subsequently sectioned under the Mental Health Act on 14/12/2000, then again on 26/07/2001 and February 2002. Mr Stuart alleged some unecessary medical interventions had been made as well. The alleged mistaken murder of Mr Calder on 26 July 2001 ( in mistake for MR Stuart) was also mentioned in support of this testimony. This, Mr Stuart said explained his behaviour in asking friends to look after some hair samples to assist in identifying his body with DNA at a later date. Attempts to obtain the Coroners report (an open verdict) on Mr Calders death have so far proved futile. Copies formerly in the posession of the Press have on enquiry subsequently dissapeared according to Mr Stuart. (Mr Stuart was sectioned at the time of the inquest so could not attend as an interested person).

Mr Stuart added four of his witnesses have been threatened and had withdrawn their support.

Mr Stuarts behaviour in alleging surveillance by Helicopters was enquired into by the judge. Mr Stuart claimed inciddents were to harrass and intimidate him and could be supported by two witnesses present, his daughter and a Mr Graham. Mr Staurt had sent cards to some officers he discovered were involved.

Mr Stuart then said he had not had a chance to read the court proceedings from the London hearing, as they had not been recieved in the post and had only just been given to him that morning. The judge replied he "hadn't read it either so we are in the same boat" Mr Stuart repeated his request for an adjournment for 3 months based on the medical evidence. Mr Hardy RMN gave evidence of recent events that Mr Stuart had been more sleepy of late and that his medication was to be reviewed...possibly with the aim of gradually reducing it. The Defendant (Mr Morton's) barrister noted that the medical argument had not been used in the recent London court hearing, although Mr Stuart had appeared to be agitated. Mr Staurt responded that for him London had meant two attempts to stab him in the past whilst visiting the bank at Harrods which had required assistance from their security staff.

Mr Stuart further alleged that his documentary evidence had been stolen on numerous occasions including even the recorded delivery slips from his posession numbering some 1,200 records. He alleged that Mr Morton had the means to organise this, citing Citigate as an example of Mr Morton's connections.

Mr Baber then gave evidence, citing a bundle document of 4 pages, of research he had made on computer databases outlining Mr Morton's interests in companies in the fields of military and nuclear contracting, corporate, physical and computer security. He was of the opinion that such connections gave Mr Morton the means and opportunity for a cover up, the element of alleged motive being to defray the embarassment Mr Stuart presented over the alleged Mulberry Cottage fraud.
Mr Baber also stated that some 3 or 4 days after meeting Mr Stuart and hearing (and taping his story) his "office" was burgled and what he believed was a death threat was left behind. He said for him the discovery of an allegedly tampered letter in which a paragraph involving Mr Mortons name had been deleted was the impetus for his enquiry into why this might be so.
He was asked by the judge about the supposed coincidence he, Mr Baber, had discovered of another of Mr Mortons companies having their case heard by the same judge in London (that dealt with theStuart case) on the same day. Mr Baber was unable to futher assist the court .

The judge concluded the morning session at 1.20pm by insisting Mr Stuart present some firm evidence on resumption after lunch.

After lunch, at 14.15, Mr Stuart began by saying in the past 3 years every angle of finance has been blocked by very strange, peculiar circumstances and yet he (Stuart) was being accused of abusing the system. He asked that proceedings be adjourned until after a proper medical report had been ordered..the one the judge had requested. The judge said he took the point about the medication but said "never mind" about the medical report. Mr Stuart asked for the police report on his stolen documents to be forthcoming which he believed was being blocked by the police...and that he did not expect to get anything from them. The judge said "allright" but also he was not going to get one if they are not going to produce one". Mr Stuart also asked for a report on his dyslexia to be prepared. As far as evidence was concerned Mr Stuart observed that on of the documents of his [to !0 Downing Street} that had been stolen now appeared in the defendants bundle as evidence of his acting vexatiously. Then he offered the evidence of an allegedly forged letter "a ten year old could understand" the judge had asked to see which centered on a change of font and deleted date suggesting, Mr Stuart said, proof of another substitution by the other side.
The judge said the significance was not obvious, that he simply did not understand what Mr Stuart was saying and the barrister for Mr Morton indicated the alleged substitution was not as Mr Stuart suggested.
Mr Stuart responded it was not obvious because it had been tampered with.

At this stage the barrister for Mr Morton argued there was no point in giving an adjournment for three months and that no advantage consistent with the overriding duty or objective is apparent. Mr Stuart asked for the new Doctors report on the following Thursday to be taken into consideration but the judge replied he couldn't overrule something he hasn't seen.

The judge then concluded in the case D G Stuart v Morton a claim for in excess of 6 millions pounds had been issued essentially claiming a conspiracy to purchase Mulberry Cottage through it being undervalued, the stealing of documents , tha attempted murder of Mr Stuart and the apparent murder of another man. Mr Morton is one of many people he intends to sue in prceedings yet to be started - up to 140 people in all.
The defendant Mr Morton seeks to strike out the claim as vexatious and an abuse of the court with an injunction . Today the defendant served some written statements (a few days late) .
The claim by Mr Stuart is simply fantasy. The direction in August was not formally filed with evidence in support to help me understand his claim and his application for a 3 month adjournment is not clear.
His grounds are that documents have been stolen or substituted, he is under medication and has limited ability to concentrate, his office has been closed by police harrassment and he is unable to obtain legal representation.
To be considered today was a further medical report and a police report.. After a further application on the 9 th October he has been able to obtain either. The order failed to mention no legal representation and the statement I asked to handle the case personally I have dealt with. The Masonic element I have also dealt with. On his application for adjournment based on an abscence of legal representation he has had some form of legal advice in the past on different matters. There is no question he would qualify on the grounds of a means test. The obvious problem is assessment of the merits of his claim. None of the solicitors he has consulted are prepared to support him on the basis of this recent application. Mr Kidd of Letchers states he intends to sue 140 people. I have no reason to believe he would recieve assistance from the Legal Assistance Commission.
He has had ample time to bring action, events have been triggered by the sale of the property in the year 2000. If there was any merit in them he would have been able to obtain legal assistance,
As far as his health is concerned from documentation, what he has said and what others have said there is a very unhappy history of mental health problems. He was sectioned in 2001 and 2002. A letter from his GP of 17.10.03 refers to a persistent delusional disorder. His medication (including amisulpride) has been doubled and he has found it more difficult to think. Mr Hardy RMN says he is more sleepy and his medication will be reviewed.
It is not entirely clear what could happen in 3 months time. Mr Stuart is highly suspicious a report has not been produced in time. Although I have been reminded by Mr Stuart I am not a doctor he has been able to argue his case with some force. I simply do not know. On the 25/09/03 Mr Stuart acted without apparent difficulty and the mental capacity argument was not used then. I have no reason to say that an adjournment today would present any appreciable benefit than today or that Mr Stuart would be more lucid. I do not think he has been sufficiently disadvantaged today.

With respect to police harrassment, Mr Stuart suspects Mr Morton has arranged for the surveillance etc to provoke and intimidate him. I really have no evidence one way or another. As regards his documents being solen he claims some 80% of his documents have been stolen. Frankly I am unclear as to why the abscence of those documents prevent him from articulating his case against the defendant as required, The claimant believes the theft was arranged by the defendant or his accomplices but he cannot identify them.He wishes to keep this evidence in hand for a major case to proceed. The fact is that the police have not provided anyting to support that there was a genuine theft of the documents, They have blocked him and he does not expect any help. He wants a court order (to obtain them) because he knows who has got them. I simply have no means of knowing this. His claim is not with sufficient particularity. I do not grant him application for adjournment.



END


Sytories from the Diogenes Club are all very well as a hobby or pastime, but if ever I am to combine my librarianship skills with a retirees life I might have to face up to more sleuthing type work, provided it is understood this is only from published sources! I am no rubber soled nosey parker.

I believe I have removed myself (and Mr Stuart) from any danger of contempt of court proceedings because this was all submitted to the open court or the judge in the early absence of any court recording...(it became ‘lost’)...and my evidence has been published contemporaneously before now( and also become unpublished or at least unindexed).

NB
A brief official record based on the Court officers notes and Mr Morton’s solicitor or Barrister does exist and should be consulted for completeness.

I have not included my copy from Mr Stuart here because it tends to detract from rather than add to my independent record ...in my opinion.

But I can make a copy available to anyone seeking ‘a check or charge of partisanship.

This is really to restore to the record these publicly available musings and especially also as they fit in with a possible investigative role for the Diogenes Club.

To be honest I think I will shrink away from this kind of thing in future, especially as I get older, but readers may wonder what motivates me and what has formed my character.

It is this. All of this, above.

I should perhaps add that there is no evidence that Mr ALR Morton has done anything wrong as far as I have been able to tell.

I did discover some anomalies but no-one seemed interested on this field of play.

I hope Mr Morton will see the humour in an amateur blundering about, as Mr Rupp, Munkel and Klawitter seem to have done in my other foray into investigative reporting,

Part 1, here:

http://www.msbnews.co.uk/archives/msn8p6.html

Part 2, here,

http://www.msbnews.co.uk/archives/hht3p7.html

Part 3, here,

http://www.msbnews.co.uk/archives/chc2p7.html

and the necessary consequences of publication, here,

http://www.msbnews.co.uk/archives/chc3p9.html


Don’t ask me why I investigate this stuff. It seems attracted to me, not I to it.

But I owe to Mr Stuart his day in court having some reportage, so that he at least might not feel that I might have been working for MI5 all along.

I cannot change the world. I can barely report it.

I hope this account will be allowed to stand, such as it is. A right of reply exists, as should be the case.

If you want some similar investigative work please bear in mind I have less stomach for a fight these days, and now hope I can tell the difference between a noble Kafkaesque cause such as this hopefully was and the risk of an error of a possible Quixotic adventure which this could always have been.

What have I learned from this?

Thank God this is England!

We usually manage to achieve a happy ending (for someone) at least.
I have read Kafka, there are dangers abrioad, But so far the damage has been contained.

A person, I have learned, will sacrifice everything for his reputation, even his health....and in the end that reputation can be destroyed through ill health. But the “man” persists.

Mr Stuart told me he knew he would never win his case, it is to his credit he tried nontheless, in so far as he believed and believes he was right to try.

I hope the state, his family and his connections who might have been disadvantaged in this battle continue to have broad shoulders to support the load he places upon them. I for one would be the less if I had not stood for a while by his side in a sea of troubles.

It is hard to know anything with any certainty. Harder to prove it. But we live in a Panopticon.

Someone will know. Mr Stuart got his money’s worth from me. I have his gratitude at least for that. Some stories tell more about us than we tell about them.

For no man is an island. Someone is, or should be, watching. That is the point of the Diogenes Club, and the idea of the Panopticon.

( See “Panopticon Security” on the web.)

Beachhutman

What Do You Get A Diogenarian For Xmas?

“Xmas is a time for being surrounded by all your loved ones,” said Blenkinsop.
“All expecting expensive presents,” interjected Millhouse.
“As if,” said Ferraby, “there wasn’t enough getting and spending already. As the poet Wordsworth said. Or was it Dickens?”
“You just feel pressured the whole time,” commented Millhouse.
Blenkinsop cited the Credit Crunch as the reason he would not be buying anything but the cheapest gifts this year. Millhouse pointed out he had been buying cheap gifts for years before the Crunch was heard of.
“Well, I can remember the time when –“ joined in old Lambert.
“Here we go,” muttered Millhouse sotte voce.
… For you can hear the same conversation every year at this time. The problem is, you see, that Diogenarians are meant to be above all this getting and spending. The debate always kicks off as we plan the Club Xmas Dinner outing.
Someone always argues, as Blenkinsop put it, “Xmas is a precious, sacred time that should be spent entirely with one’s family.”
“That’s how Boxing Day Sales were invented,” retorts Millhouse with typical cynicism, “After two days of family togetherness, people will seize any excuse to get out the house away from their relations. The rest of the time you just sit there on the sofa staring catatonically at the box, showing wall-to-wall repeats, garish Xmas specials and endless flashy trailers and loud commercials.”
The conversation turns inevitably to the Christmases of old black-and-white films – A Xmas Carol with Alastair Sim as Uncle Scrooge, The Holly And The Ivy with Ralph Richardson as the out-of-touch vicar, and so on. Those were the days when there was only one TV channel, just called BBC-TV, and they only ever showed one feature film per year, on Xmas Day - something distinguished and worthy like High Noon or that Swedish nature film about a year on a farm, The Great Adventure.
Today, we are surrounded by electronic media, or “digital choice” as they call it – meaning we are spoilt for choice, with almost nothing we want to watch. But the coming of the age of electronic media also means you can retain one aspect of personal choice: you can watch films with no commercials, without staying up late, or queuing at the cinema, on DVD. In this, many of us are in favour of modern development, and we now have a regular Club film evening, with films viewed via an overhead projector casting a large image on the wall above the lounge fireplace.
Watching a memorable film creates an occasion that can be enjoyed in a group, whether family or friends. For the same reason, it makes for a natural present, for regardless of who gives it or gets it, the whole group can enjoy it together. It becomes a shared narrative, a winter rite going back to the practice of tales told around the campfire.
Last year, for the benefit of those who like to spend Xmas in solitary contemplation with a good book or two, we put up a list with some suggested Xmas holiday reading of suitably Diogenarian works, accounts of being stranded on a desert island with only a few possessions, and so on. This year, we can consider some twenty suggestions, made around the Club over the year, of films which reflect the pervasive nature of the Diogenarian view. That is, this year they are not the Robinson-Crusoe survival adventures whose narratives are far removed from the lives of most people, but reflect the Diogenarian theme in ways that are closer to home, and to contemporary life.
Some of course, still prefer the austere black-and-white films they grew up with, and several titles were suggested here. One was My Man Godfrey, a Depression-Era screwball comedy, categorised by the US Library of Congress as "culturally significant." A Bostonian living as a down-and-out, picked up during a socialite’s scavenger hunt and hired as a butler, proceeds to show up the thoughtlessness of the idle rich. Another such, with more of a club-versus-family theme, is the 1930s Laurel & Hardy comedy called Sons Of The Desert in America and Fraternally Yours in Britain, where the boys’ wives refuse to let them go to a fraternal-lodge convention they have sworn to attend. Black-and-white was also used extensively for documentary, and a recent DVD set, Land Of Promise, covers 40 years of the British Documentary Movement, showing how industrial shorts portrayed modern industrial society with all its problems on-screen for the first time, at the same time looking beyond material considerations towards a more enlightened view.
Unlike US cinema during WWII, British films did not promote jingoism, but an appreciation of more mystical values linked to the landscape. In I Know Where I’m Going, a wilful young woman has her resolve to marry into money melt away during an enforced wartime sojourn in the Celtic twilight of a Hebridean island. Much later, in the Thatcherite 80s, a similar setting would seduce an American businessman, sent in to buy up a village for an oil company, away from his monetary values in Local Hero.
British postwar films also took a wryly cynical view of success, and of patriotism, for example in two black comedies with Alec Guinness: Last Holiday, from an original JB Priestley script, and Our Man In Havana, from the Graham Greene novel. (To say more might spoil plot surprises.) Even that staple of postwar British cinema, the war drama, took a more cynical view in films like Ice Cold In Alex, where it is not the idea of Queen and Country that keeps the hero going across the Sahara so much as the prospect of an ice-cold lager in Alexandria. A Burmese jungle-trek survival experience also brings the emotionally dead and suicidal hero back to life in The Purple Plain, an early colour location-made war film.
Black-and-white was also used by lower-budget European films right through the 1960s. Examples of these include the final part of Antonioni’s trilogy of studies in contemporary urban alienation, Eclipse. Made just before he made Blow-Up, it ends with five minutes of footage of modern Rome cityscape shots from which the characters have eerily vanished. Another European example is the 1969 Ma Nuit Chez Maud (My Night At Maud's), set over Xmas in a bleak French provincial town. It has no music score, only the type of philosophical conversation French cinema is famous for, here about trying to live your life around the idea of resolving Catholic moral dilemmas using Pascal’s Wager.
The tradition of philosophical conversation continued into the colour era with films such as Louis Malle’s My Dinner With Andre. Here, a theatre director relates how he stepped outside his middle-class comfort zone after being buried alive in a Polish forest encounter-therapy session, and tries to convince his dinner companion to give up his electric blanket, to appreciate life all the more keenly.
Experiencing the Great Outdoors via a camping trip of some sort as a character-testing mechanism is in fact a part of American culture long satirised in films such as the US independent-cinema anarchic spoof Hallelujah The Hills!, and Hollywood romantic comedies like Man’s Favorite Sport? and A New Leaf. Similarly, though Woody Allen is a confirmed urbanite, the psychological impact of Nature is part of his A Midsummer Night’s Sex Comedy, where animal primitivism rears its head amidst the civilised philosophical discussion during a 1900s country weekend in upper New York State. Coming to terms with the North American wilderness is given a more realistic and complex treatment in fact-based dramas such as Jeremiah Johnson and Never Cry Wolf.
There are still many who prefer colourful tales set in remote locations, and there are several works which nevertheless reflect a more Diogenarian worldview where other values are shown to be more eternal and significant than any stock colonialist ideas. First is Black Narcissus, about the psychological effects that a posting to a derelict Himalayan monastery has on a group of British and Irish nuns. Then there are a pair of 1970s modern, slightly satiric, adventure dramas: The Man Who Would Be King, from the Kipling story, has a pair of cast-off British adventurers in a similar setting, discovering the dangers of colonialist assumptions, and the vaguely fact-based hostage-crisis story The Wind And The Lion, about the appeal of an older and wilder way of life to an increasingly buttoned-down and politicized society.
Finally, Xmas being a family time, there is My Family & Other Animals, turned into a feature film by the BBC in 2005, from Gerald Durrell’s memoir of his family’s retreat from Bournemouth to idyllic natural surroundings in Corfu, where the eccentric family pursued the bohemian life each in their way, until WWII forced them home again.
That’s over twenty, and if you can’t find something there, a Merry Xmas anyway.

I'm Sure There's Nothing To Worry About...

Gentlemen! More appalling cynicism about this mighty nation of ours has been brought to my attention!

Surely it is time for every right-thinking Englishman to petition the Government to outlaw this 'interweb' thing, as it is clearly responsible for spreading dangerous seditious nonsense, such as the following outpourings from someone who freely confesses that he has no formal training as an economist:

I have, for a long time, been pointing out that the UK is structurally bankrupt. Back in July I wrote the following:


As I have mentioned, government will need to either borrow more, which will destroy confidence in the UK economy, or will require massive cuts in state spending. If it is the former, then the result will be destruction of confidence in the UK government's ability to manage the finances of the UK and the UK economy. If it is the latter, then there will be a strong downward lever on the economy (at least in the short to medium term).

I have been giving this some thought, and I am coming to a conclusion that it is going to become increasingly difficult for the government to borrow at all. I have detailed elsewhere that the £GB will continue to fall in value. I have argued that depression is looming. The government deficit it going to balloon. This makes lending to the UK government a very, very high risk venture.

My question is this; Will anyone want to continue to lend to the UK government under such circumstances?

I think that the answer, in the coming months, will be 'no'. I am not sure at what point this will occur, but I would guess that the turning point will come in the next six months or so. It is at this point that the government will really fall to pieces. The reason will be that, in the near future, the UK will be calling on the International Monetary Fund. Quite simply, with the huge risks in the UK economy, I simply do not believe that it is creditworthy, and others are going to come to the same conclusion.

As a note, since that post, I have pointed out that the IMF may not be an option, on the basis of the question; who will be funding the IMF?

As the government sought to 'fix' the crisis through the banking bailout, and then chose to spend its way out of recession, it became ever more apparent that the overseas investors, who have been financing the defecit, would gag on such proligacy. I explained the nature of the problem in a previous post at the start of September, and will also quote this at some length:

The reason why confidence is so important is best explained through an analogy. The analogy is an 18th century aristocrat who is living beyond his means. He gambles, he entertains, and he has a wonderful time. All of the tradesmen extend to him long lines of credit, and he continues with his profligate lifestyle, all the time feeling that he is above the petty business of managing finance. After all, his family has been wealthy for generations, and it is his right to enjoy the good life. However, he is actually spending his family wealth, and the earnings from his estate are no longer covering the costs.

His creditors also know that his family have a long history of wealth, they see his fine house, they see his expensive furniture, his lavish lifestyle, and can not believe that he will not repay the credit that they are extending.

Then a rumour starts that he is in financial trouble. One or two of his creditors start to press for payment, and restrict his access to new credit. He is unable to make the payments. The word starts to go around that maybe he is not as solid a credit risk as everyone first thought. Creditors start to refuse to extend his credit further, and the aristocrat starts to realise that he has no money. The entertaining, the lavish clothes, all become beyond his means. He can no longer make repayments. His estate does not generate enough cash, and now that the credit has stopped, he can no longer afford anything at all. He is bankrupt.

The UK has long lived on such confidence but, like the aristocrat, it is a misplaced confidence. It is a confidence built upon an idea that wealth is a birthright. However, as the UK is about to learn, it is not a birthright, but something that requires effort and energy. You can only live so long on your inherited wealth before it is squandered away, and you can only live so long on credit before the creditors start to ask questions of your ability to make payments.

Don't let yourselves be fooled by the fact that most of things that he predicted, at the start of the summer, have actually come true.

The man is quite clearly deluded, and determined to bring this great nation of ours to its knees, with his poisonous drivel.

I don't need to tell you to avoid his blog, which is here, at all costs.

I know you won't let me down.

That Sinking Feeling

Around the Club, there has been little talk of The Crunch. Because of the Club ethos, no-one will admit to personal loss from market speculation. But last week, HM the Queen, until the previous week the wealthiest woman in Europe, set tongues a-wagging by asking, How could this happen? She herself had lost around £25 million - money she was going to use to fix up the Palace bedrooms one day. Why did no-one say anything, asked the dear lady - warn the others of the fact the Crunch had been predicted? The answer she was given is that each was relying on the others to provide such warnings. It’s part of a system of delegated and distributed responsibility that was set up in the wake of the South Sea Bubble scandal, when government set up the so-called Sinking Fund to ensure future stability and manage the national debt.
... It was indeed for that very reason, the management of national debt, that the government of the day were drawn into the Bubble. The South Sea Company was really a bank masquerading as a stock company, set up in 1711 by Harley, the Earl of Oxford, who was the Lord Treasurer and prime minister in the new Tory government, to underwrite a national debt which had grown to £30 million since the Act of Union, when Scotland’s debts had been added. An Act of Parliament awarded the South Sea Company a trade monopoly with South America, in exchange for a £7 million loan.
The official prospect presented to investors, of lucrative trading rights to Spanish slave colonies in South America (over which in reality England had no control), was a shell game talked up by insiders to lure the greedy. It was so successful that even servants began investing, borrowing money to finance the share purchase, and as the share price rose, acquiring luxury goods such as fine carriages and livery. Others sunk their entire family fortunes into the scheme. Nearly a hundred other “joint stock” companies started up, some with even less realistic aims – to buy up the Irish Bogs, manufacture square cannon balls, and so on. Speculators included the Royal family, and King George I outlawed brokers selling shares in rival offerings.
Inevitably, what goes up on the market must come down, but even the discoverer of the Law Of Gravity, Sir Isaac Newton, didn’t see that coming, and reportedly lost £20,000. He later explained 'that he could not calculate the madness of people'. “The Madness of Crowds” would become a popular phrase to explain such collective delusions. MP Robert Walpole decried "the dangerous practice of stockjobbing’ which would decoy the unwary to their ruin, ‘for a prospect of imaginary wealth.’
The dangers of jobbing stock salesman manipulating the market had already been demonstrated across the Channel the previous century, when Holland had been caught up in buying and selling shares in tulip growing enterprises. The facts that it took 7 years to grow a prize tulip from seed, and that supply soon outstripped demand, did not halt the tulip bulb futures trading mania until the price of a tulip had reached 5,000 guilders. But the Dutch economy survived the bursting of the Tulip Bulb bubble because the Amsterdam Stock Exchange had declined to trade in tulip futures. Walpole also warned the Company directors would become masters of the government, controlling the legislative process.
His warning was in vain, for over 460 MPs and 112 Peers invested. The main private backer, Blunt, Chairman of the Sword Blade Company (which had diversified into official managing forfeited estates), also publicly spoke out against greed and corruption. But behind the scenes he set up a £1 million fund to convert government debt into company stock and drive up share prices, plus a slush fund of £500,000 to bribe government officials. (He was elevated to the Lords within the month.)
European and American interests were also involved, with a Scotsman pulling the strings. Scotland had been forced to subjugate itself to England under the Act Of Union 1707 due to its facing bankruptcy over the Darien Scheme. Promoted by the Scots co-founder of the Bank Of England, the scheme had been backed by the new Bank Of Scotland, which invested a fifth of the nation’s fortune. It was meant to open up trade with China and Japan by setting up a colony on the isthmus of Panama, where a canal would be dug.
The idea was ships from China and Japan would arrive on the Pacific side to trade, offering finest Cathay silks, etc. in exchange for Scots staples. In the event, there were no ships from Cathay and the colonists couldn’t even interest the local Indians in their baubles and bibles. Though guided by a former castaway (a surgeon on one of Dampier’s vessels who had been marooned for 4 years among the local Indians on the isthmus), the colonists were largely young aristocrats with unrealistic expectations. All their ships but one sank, and over 2,000 colonists perished on land. Scotland had to petition England to pay off its national debt to stabilise their paper currency.
A Scots economist, the so-called “father of finance,” John Law, set up a similar French operation, the Mississippi Scheme. Law was a Scots banker who helped broker the 1707 Act Of Union bail-out, but had fled to France after escaping prison following a duel over a woman. He was the exponent of two economic theories, 'The Scarcity Theory Of Value', and the 'Real Bills Doctrine'. He is credited with the notion each country should have a national bank which could issue its own paper money.
He proposed what he termed a Land bank (which wits of the time called a Sand Bank, suggesting it would sink the ship of state), whereby currency was issued according to crown land-holdings, rather than gold and silver hoards. This appealed to a nearly-bankrupt France, which had exhausted most of its coinage in a series of wars, and Law was appointed Controller-General of Finance by the French regent. Law and his brother set up Law & Co, a bank in all but name, which was awarded exclusive trading rights to the French colonies in the Indies.
To expand this empire, Law set up the Mississippi Scheme to exploit a trading monopoly with the French interests in the Mississippi basin lands. Inspired by the tales of Conquistador gold, the Mississippi stock offer was at first a runaway success. Law and associates talked up the colonies’s potential wealth, leading to massive speculation. Shares rose to over 10,000 livres apiece, and became almost a negotiable currency in themselves. To maintain public confidence, an army of over five thousand beggars was conscripted, equipped with miners’ picks and shovels and marched through the Paris streets towards the ports, supposedly bound for the gold mines of Louisiana – though it was observed most just sold their gear in taverns and returned to begging.
In 1720 Law’s scheme, like all pyramid schemes, became over-inflated. The company was re-organised as the Banque Royale, a mechanism to ease the French exchequer by issuing its own currency. But the Regent could not grasp why he should not keep on issuing paper notes far beyond any tangible assets. To prevent a run on the bank, he had to pass laws to stop people trying to cash in their paper notes for coins. It became illegal to own more than a modest amount of coin, jewellery, precious stones, or even plate, and bounties were paid for servants to turn in their masters for hoarding. Anyone suspected had their homes raided and their assets seized, even for being seen with a single louis d'or coin. Everyday trade collapsed as there was no coin for small purchases. Those with assets remaining who tried to flee were arrested at the border, stripped of any coin or plate, and imprisoned as speculators. Anyone who did escape abroad was sentenced to death in absentia.
Law’s carriage was stoned by the mob, and he fled to England while his brother was put in the Bastille for malversation. (Law would end his life in exile in Venice, where he squandered his personal fortune on his lifelong addiction, gambling, dying impoverished.) The Regent’s attempt to blame Law for his own recklessness did not solve the matter, and many others were charged by a commission of enquiry with malversation. The inflated paper currency was publicly burned, and the Paris treasury issued a new paper currency of modest denomination which was redeemable against gold, silver, or copper coin, leading to a crush in which 15 people died trapped in the bank doors.
The initial success of Law’s scheme had helped inspire England’s Bubble, but the French collapse did not prompt English official action at home. In mid-1720, South Sea Company stocks began to slide from their peak price of £1000 a share. The Sword Blade Company, who acted as chief cashiers of the Company, stopped paying out, and it became known that Sir John Blunt and others had sold out. Other bankers also closed up shop. The ruin of thousands of people followed, beginning with the working class speculators who had bought on credit. Middle-class investors were next, their life savings gone in a week.
Finally even the wealthy suffered, from bankers to bishops. Angry crowds gathered at Westminster, till the Riot Act was proclaimed. The King, George I, lost over £50,000, and his German mistresses, a Countess and a Duchess who had promoted the scheme, were booed in public. There were suicides almost daily as financial ruin spread throughout the country. The Bank of England was called upon to help by subscribing to company bonds, but declined. The South Sea Bubble had burst.
Company directors were spat at in the street and threatened. The treasurer fled in disguise to Calais, and an extradition warrant was issued for his person, but he escaped Belgian custody. A parliamentary ‘Committee of Secrecy’ was formed to investigate, and informed the House they had “discovered a train of the deepest villany and fraud that Hell had ever contrived to ruin a nation.” The Commons ordered the doors locked, and 5 MPs were placed in the custody of Black Rod, including Sir John Blunt. Blunt testified that he couldn’t remember details.
An Act was passed to prevent directors fleeing or sending assets abroad, and to seize the papers of what Tatler co-founder Sir Richard Steele called these "cyphering cits", whose arrogance led to their downfall. The Committee of Secrecy reported the company books, where they were not entirely missing, had pages torn out, contained many fictitious entries, blanks and erasures.
All the directors were arrested and their estates seized to finance a compensatory fund. Blunt alone had £178,000 seized. The Chancellor of the Exchequer was impeached for corruption and put in the Tower for a time. The Secretary of State died after bursting a blood vessel in the Lords defending himself against corruption charges. The Postmaster General died suddenly, poison being suspected. The official Parliamentary History concluded that the Company had amazed all Europe, "but whose foundation, being fraud, illusion, credulity, and infatuation, fell to the ground as soon as the artful management of its directors was discovered."
Walpole, the new Chancellor, divided assignment of the debt between the Bank of England, the Treasury, and the South Sea Company (now effectively nationalised), along with something aptly known as the Sinking Fund. This was a reserve of savings out of the annual Budget to stabilize the currency. Legislation then had to be passed (by Pitt) to stop successive Ministers raiding the fund, and it was decades before The South Sea Company and the Sinking Fund could be safely abandoned, for other economic crises continued to appear, as part of the natural boom-and-bust cycle of capital investment.
... Today of course, things are quite different. Money can be moved electronically, added or subtracted in an instant, with no need for coins or even paper. Plastic is the new gold standard. Collateral such as real estate can be re-mortgaged, the debts repackaged, sold and re-sold abroad. To maintain confidence in the stock market, the Chancellor will quickly intervene to save any bank that gets itself into a mess through mismanagement, no matter how huge the public cost and scandal. The Prevention Of Terrorism Act can be used to seize foreign assets, where there is a perceived danger to British interests.
As to the lessons of the past, many would conclude there is nothing to be learned – or rather, nothing that will be learned.

Who Could Have Known....

I was chatting to Manton the other day over a drink, and I said something about how it was a pity that no one could have forseen the collapse in the markets, because if they had, something could have been done to avoid the worst effects of the crash.

He astonished me by pointing out that there were some that had predicted it. He drew my attention to the following article:

Ten People Who Predicted the Financial Meltdown

Of course, as I don't need to tell you, it is troublemakers like these that are actually responsible for talking us into a recession, and that if only they would keep their mouths shut, everything would be fine.

I am relying on you to ensure that their poisonous, seditious nonsense goes no further. Under no circumstances should you allow others to be exposed to such negative thinking.

I know you won't let me down.

In The Heart Of The World

We were sitting around the fire in the club lounge the other evening, and the talk turned, inevitably, to exploring, in particular what we used to call the Mysterious East. It has a special appeal for many even today, when the maps have no more blank spaces. For its ancient ways offer a counterpoint to Western capitalism and materialism which is particular appealing when these Western philosophies are shown to be hollow and manipulative in times of economic crisis. In the old days, when Asia’s vast mountainous interior was largely unexplored, its mystery, its lure, stirred many to go off exploring, excited at the prospect of discovering who knows what – Shangri-La, or perhaps the Abominable Snowman. A few were simply drawn to its mysteries like moths to a flame, for reasons they themselves could scarcely articulate, and often either never returned, or returned forever changed.
One of these was a British explorer who came to be called by his biographer “the last great imperial adventurer”. His brash early geographic explorations through the heart of Asia led to him later exploring his own heart for the lessons that might be learned from the ancient wisdom of the East.
Although born in India, he was packed off back to England to be raised by two religious aunts. After attending Clifton College in Bristol, Francis Younghusband joined the Army for the same reason many did at that time – the opportunity for adventure abroad. Inspired by his uncle, a noted explorer of Central Asia, Younghusband became in 1886-7 the first European since Marco Polo to cross China and Asia. The young subaltern travelled through Manchuria to Peking and into Mongolia, crossing the Gobi Desert and the Himalayas to India. For this remarkable feat, the Royal Geographic Society not only gave him a gold medal but elected him as their youngest member, age 24.
He transferred to the Political Service and got involved in what Kipling in his novel Kim would call "The Great Game." This was the contest between Britain and Russia for political control over the lands beyond India’s North-West Frontier. After discovering the source of the river after which India is named and nearly having war with Russia break out when he was reported killed, Younghusband was despatched to Tibet at the head of British military mission.
In 1904, his friend Lord Curzon, Viceroy of India, sent him in to show the flag as part of the political Great Game. There in his zeal, Younghusband exceeded his instructions, leading to the massacre of a Tibetan militia army. In the capital Lhasa, he intimidated the Dalai Lama into signing an impromptu anti-Russian alliance treaty with Britain (later repudiated by an embarrassed Whitehall, which was pretending neutrality). But while his men looted the Potala Palace and the monasteries, his own time in Tibet became the turning point of his life. In the mountains he had a spiritual experience, a mystical revelation about the oneness of humanity and religion, which would change his formerly evangelical-Christian outlook into an Oriental mystical one. (In Whitehall parlance, they called this ‘going native.’)
Although invested with the title of Knight Commander for his “conquest” of Tibet, Sir Francis turned from the sword to the pen, becoming a writer and propagandist for his beliefs. Instead of serving the cause of Empire, he felt he would instead serve the cause of humanity’s spiritual development. During the First World War, he sailed to America with Bertrand Russell to lecture in philosophy. He then commissioned the song which would become Britain’s popular “alternative” anthem, Jerusalem, based on Blake’s mystical verse, but refused to let it be used to promote wartime jingoism. (He even thought the Boy Scouts too militaristic.)
After the war, he became President of the Royal Geographic Society, and organised several reconnaissance expeditions following his 1904 Tibet route, this time right across Tiber to the Chinese border to explore Mt Everest, named after a British official, but known more reverently by Tibetans as Chomo-Lungma, the ‘Mother Goddess Of The World.’ It was on one of these expeditions to the “roof of the world” that two famous colleagues of his failed to return, their fates a mystery, when Mallory and Irvine vanished near the summit in 1924. He himself turned to inner exploration, and became a mystic admired by Bertrand Russell and HG Wells. He explored esoteric ideas like telepathy and the existence of superior extraterrestrial life forms, writing a score of books on spiritualist beliefs which anticipated those of the 1960s, with titles like The Heart Of Nature (1921), Mother World (1924), Life In The Stars (1927), and The Living Universe (1933).
In 1936, he attempted to reduce religious differences by establishing the World Congress of Faiths as war clouds again gathered over Europe and Asia. (His former house-maid Gladys Aylward was caught up in this, she having become a missionary in China just before the Japanese invasion, an event depicted in her filmed biography, The Inn Of the 6th Happiness.) The American aviator Lindbergh, an antiwar activist also interested in matters spiritual after the kidnapping and death of his baby, personally flew him across India, whose independence he long supported. But though he admired Gandhi, he was not entirely ascetic. In fact, he also preached free love, criticizing marriage as an outdated custom. Until his death, he lived with Lady Madeline Lees, who with her husband had co-founded a Christian commune at South Lytchett Manor in Dorset. Having forsaken his wife, he spent part of his last few years with his much younger companion at her manor house on the north side of Poole Harbour. He died at the Manor during WW2, of a stroke.
You can visit his grave in the quiet country churchyard of Lytchett Minster, across the fields from the Manor, next to an ancient yew tree and under a headstone with a carved image of the Dalai Lama’s palace in Lhasa.

Manton's Seppuku Puzzle

The Diogenes Club was strangely quiet when I walked into the grand entrance hall. As I shrugged off my coat, I noticed through the open doorway that there were far fewer members in the dining room than was normal, and what conversations there were, were somewhat muted. The first chill of winter was in the air, but I didn't think that was the reason for the poor turn out.

"It's quiet today, Henry." I said, as he took my scarf and gloves.

"Indeed, sir."

"Are any of the others here yet?"

"Just Mr Manton, sir. Mr Abrahams and Mr Treworthy have telephoned to say that they may be a little late."

"Did they say why?"

"In Mr Treworthy's case, an emergency board meeting - he indicated that due to some innovative corporate investments in certain European banks, some question marks had arisen over the company's short term cash-flow."

"Hmm. I don't know about you, Henry, but I always get worried when the words 'innovative' and 'investment' crop up in the same sentence."

"Quite so, sir."

"And Mr Abrahams?"

"He didn't say, sir. Your usual drink, sir?"

"Yes please, Henry. And one for Mr Manton."

"Yes sir."

I walked into the warmth of the library. It was just the same, one fixed point in these uncertain times. A warm fire, the walls lined with books, and large armchairs with side tables.

"Hello Manton." I said, as I eased myself into the chair next to him.

"Thank God you're here," said Manton, throwing his newspaper aside with unnecessary venom. "that bloody thing was driving me mad."

"You don't usually have that much trouble with the Times Crossword."

"Oh, I finished that in about fifteen minutes. I was so bored that I was reduced to having a go at one of those bloody Seppuku puzzles."

"I think you mean Sudoku. Seppuku is an act of ritual suicide by cutting open one's stomach, otherwise known as hari-kari."

"I know exactly what I mean. The damn things could be solved by a computer. At least a good crossword has a bit of wit, some...some soul. And you might end up learning a few new words."

Henry arrived with our drinks.

"Cheers, old man." said Manton, gulping down the remains of his existing glass before taking the one that I had bought for him. "No word from Abrahams, Henry?"

"Nothing further, sir."

"Oh well, it looks like it's just you and me today, old boy."

"What about Travis?"

"I don't we'll be seeing him for a while. I suspect that global economic meltdown and the possible end of capitalism might be occupying his time at the moment. Mind you, it's something that will affect us all."

"Yes - it all seems a bit abstract to me, to be honest. I haven't really got any money to speak of. I manage to pay my mortgage and taxes and have a bit left over to buy the occasional book or shiny disk, but that's about all. You don't seem too bothered by it, Manton."

"Oh, it bothers me alright. I'm just not very surprised. I've been waiting for this to happen for the last thirty years."

"What do you mean?"

"Ever since I read one of Galbraith's books. Didn't you have a look at that film that I told you about?"

"The money as debt thing? No, not yet. Been a bit busy."

"Well, it essentially explains what a bank is, and how it creates money."

"I thought Government's created money, in the mint."

"Only a small amount. Most money is created by banks, which, don't forget, are private corporations."

"Yes, but it's backed up by the deposits of the customers, isn't it?"

"No, they just create it out of thin air."

"You're kidding." I laughed, but Manton's face was deadly serious.

"Not at all. The film uses the story of the Goldsmith's Tale, to try and explain how banking got started.
       For a long while, people used all sorts of things as money. Shells, stones, bushels of wheat, pieces of gold. As long as everyone had faith that it could be exchanged for things that people wanted, like food, there was no problem."

"Of course. We learned that sort of thing at school."

"Really - the British education system has clearly improved since my day.
       Anyway, once upon a time, around the fifteenth century, in place like Venice, or Amsterdam or London, there lived a goldsmith. As well as jewellery, he made coins, which people liked because they were a convenient way of carrying around their wealth. Of course, he needed to keep his wares safe, so he built himself a vault.
       Pretty soon. other townspeople were knocking on his door, because they wanted to rent space in his vault so that they could keep their own valuables safe as well.
       The goldsmith was soon renting out all the space in his vault, and making a nice little profit into the bargain. After a few years the goldsmith realised something quite important. People rarely came in to take their gold out of the vault - and if they did, they didn't all do it at the same time. Any idea why?"

I took a sip from my whisky. "No, not really."

"It was because every time someone deposited some gold in his vault, the goldsmith had given them a receipt. A paper claim note that they could use to claim back their gold."

"And the paper claim notes were being used in the market place to buy and sell things, as if they were the gold itself." I exclaimed, triumphantly.

"Exactly. Bank notes. Paper money. It was quite a radical idea."

"And so that is why a bank note 'promises to pay the bearer on demand'."

"Yes - notice that it doesn't say what they will pay you in, though."

I got a fiver out of my wallet, and studied it carefully. "No, you're right. I suppose I had always assumed they would give you... I don't know, gold coins, or something."

"I'm afraid things have moved on since then. You see, the goldsmith decided to start up a new business. He decided to lend out his gold to people who needed it, in return for a payment, which he called interest. The longer you wanted to borrow some of his gold for, the more interest you had to pay. Because his paper claim notes were in such widespread use, people asked for their loans to be paid to them in claim notes, instead of the actual gold."

"Well, that doesn't seem to bad."

"No, I agree. But, as the country got richer, and industry expanded, more and more people started to ask the goldsmith for loans, and this is when he had another brainwave. Because hardly any of his depositors ever asked for their gold back, he decided to make loans based on their gold, as well as his own."

"Hang on, that's a bit cheeky. Did he ask for their permission?"

"Well, not as such. After all, as long as the loans were always repaid, the depositors would be none the wiser, and no worse off. And he would make a much larger profit than he would otherwise be able to with just his own gold."

"I know, but he's taking a bit of a risk."

"Well, as they are always saying on the news, the economy grows because of risk takers. The spirit of the entrepreneur and all that." Manton took a mouthful from his glass. "At least, they used to. You only get the occasional hedge fund manager with a death wish saying it now."

"So what happened next?"

"The goldsmith grew hugely wealthy, far more than his fellow townsmen. You know the sort of thing. Several villas, each with their own retinue of servants, and a holiday home at the coast. His own private yacht. A huge collection of carriages, and horses to pull them. The finest clothes."

"But... he wasn't really doing anything, was he. Not really."

"Funnily enough, that's what the other townspeople thought. Rumours grew that he was actually spending his depositors' gold. One day, they turned up at his vault and threatened to withdraw their gold unless he told them where his wealth was coming from.
       He showed them the vault and they could see that their gold was still safe - but they still weren't satisfied, so he told them that he had been making loans based on their gold as well as his own. They demanded a cut of the action, and so the goldsmith agreed to pay them a share of the interest that he was earning on the loans based on their gold."

"Well, that does seem fairer. After all it's their gold."

"Indeed. And that was how banks started. The bank would make loans which were guaranteed by the depositors' gold that was held in the vaults, and charge a high interest to the lender. Instead of being able to pocket all of that interest, the goldsmith now had to pay some of it on to the depositors whose gold he was looking after, but he paid them a lower rate of interest, and used the difference to pay for the costs of running his bank - which obviously included his own salary. And the occasional bonus."

"Well, villas in the south of France don't pay for themselves, Manton."

"How true, how true. Those are very wise words." He looked at his empty glass. "I think it's my round isn't it? HENRY!"

As Henry brought the drinks over, I thought about what Manton had said.

"That's all very well, but none of this really explains what is going on at the moment."

"Well, I haven't finished yet. You see, most people think that this is how the banks operate today. That they make loans, based on their depositors' money, for which they charge high interest rates, and pass on some of the interest to their depositors. But the goldsmith - actually, I think we had better start calling him a banker now - the banker had another brainwave."

"I'm starting to get a bad feeling every time that happens."

"You see, the banker wasn't content with the amount of interest that was left after he had paid off his depositors - and the need for credit was growing - great expeditions were being sent out to explore the recently discovered continent of America, and there was much growth in new industries. There wasn't enough money available for everyone that wanted some."

"Why not?"

"Because it was tied to the amount of gold in the banker's vaults. Whether it was his gold or his depositors gold, there was still only a fixed amount."

"So what did he do?"

"It was a stroke of genius. Because he was the only person who knew how much gold was actually inside the vault, and because he knew that his depositors would never want to withdraw all of the gold at the same time, he realised that he could issue claim notes on gold that didn't even exist!
       So long as he didn't get too many people wishing to claim back their gold at any one time, how would anyone ever find out?"

"What!?" I spluttered, whisky spilling over my waistcoat as I tried to stop choking.

"I know, it's breathtaking isn't it."

"He can't do that! It's illegal. It's .... it's..... how can he do that? It's outrageous!"

"That's precisely why the scheme worked - and rather well, as it turned out. Needless to say, the banker became even more incredibly wealthy than he already was."

"I'm not surprised. It's one thing to get interest for loaning out his own gold, or even his depositors gold, but making interest for loaning out gold that doesn't actually exist.... of course, he doesn't have to pass on any of that interest to despositors, does he. Because the gold doesn't exist, the depositors don't exist."

"Precisely."

"It's a damn sight more risky now, though. Not only might he have to pay out his own gold, or even his depositors gold - he might have to pay out gold that he doesn't have. That he has never had."

"But people hardly ever want to claim their gold - certainly not at the same time. Well, not usually."

"Well, if I had been him, I would have been bloody careful not to draw attention to myself. He'd have to scale back on his ostentatious spending - if anyone suspected foul play and called his bluff, the whole thing would come crashing down."

"Yes, you'd think so. For a long time the idea that the banker was creating money out of nothing was so outrageous, it did not occur to people that this might be what was going on.
       Of course, the power to just invent money went to the bankers head, as you can well imagine. He just bought more 500 room mansions, art collections and so on. He would spend, on one suit of clothes, what another person might spend on food in an entire year."

"But didn't he see how dangerous that was - if only out of a sense of self-preservation?"

"It seems not. Of course, the inevitable happened, and in time, the bankers ostentatious wealth triggered suspicions amongst the townspeople once again.
       Some borrowers started to demand real gold, instead of paper claim notes, when they took out their loans. More rumours spread.
       Suddenly, several wealthy depositors turned up to withdraw their gold. The game was up. A sea of claim cheque holders surrounded the bank, all wanting to get their gold out. The banker had to close the bank because, of course, he didn't have enough gold in his vaults to redeem all of the paper claim notes that he had put into circulation."

"And people realised that their paper claim notes were worthless."

"It was the first run on a bank. It is what every banker dreads. Not just because it can ruin an individual bank, but more importantly, because it shakes confidence in the very idea of a bank."

"Yes, but after this run happened, everyone could see how dangerous it was. I mean, the government must have outlawed the practice of creating money out of absolutely nothing. It's just plain madness. It's never a good idea to live beyond your means."

"Well the government could have done that. Unfortunately, the large amounts of credit that the banks were offering had become essential to the success of European commercial expansion - and also essential to the political success of whoever was running the country at the time. You wouldn't last long in power if your opponents could promise to make the country more wealthy than you.
       So instead, the practice was legalised, and regulated. Bankers agreed to abide by limits on the amount of fictional loan money that could be lent out. The limit would still be much larger than the amount of actual gold and silver in the vault though. Usually the limit was 9 to 1. The bank agreed to only lend out 9 dollars for every 1 dollar of gold that they had in their vault."

"And the government trusted them?"

"No, the rules were enforced by having surprise inspections of banks. It was also arranged that every country would have a central bank. If a local bank experienced a bank run, the central bank would support it by sending it extra consignments of gold to enable them to pay their depositors."

"And that's what the Bank of England does here, and the Federal Reserve Bank in America?"

"Got it in one. The central bank is the lender of last resort.
       As I've said, it was very unlikely that all the depositors would wish to withdraw all of their funds at the same time, unless the bankers did something incredibly stupid, like accumulating enough wealth to make even King Midas himself blush.
       And it was even more unlikely that all of the local banks would need extra reserves from the central bank at the same time, unless they did something even more incredibly moronic like spending lots of money on 'financial packages' based on the American mortgage market when they have no idea of how much risk is tied up in them."

"That wouldn't just bring one bank down, would it - that would bring all the banks down. Including the central bank."

"That's right."

I sat quietly and thought for a while. The logs crackled in the grate, interrupted only by the slow, regular sound of the Grandfather clock.

"I think I'll get very, very drunk tonight."

"Capital idea, old man. I usually end up thinking I'll get very, very drunk every night, but that's mostly due to my ex-wife. Mind if I join you?"

"The more the merrier." I finished off my glass, flinching as it hit the back of my throat. "So is that how the system operates now?"

"No, not quite. It's even more terrifyingly divorced from reality now, but I think we need to have considerably more pure malt whisky inside us before I go on, or you'll never believe me."

At that moment, Abrahams came into the room waving a newspaper. "Have you heard?"

"My God, Abrahams, where did you spring from?" said Manton, trying to not to spill any more of his whisky.

"It's completely unprecedented. Unheard of."

"What is? What the devil are you talking about?" said Manton.

"It says here, the US Treasury Department, for the first time in its history, is to begin selling bonds for the Federal Reserve in an effort to help the central bank deal with its unprecedented borrowing needs. Treasury officials said the action did not mean that the Fed was running short of cash, but simply was a way for the government to better manage its financing needs."

"Manton," I said, "you said the central bank is the lender of last resort. That's what is stopping the whole thing from collapsing. If they need to borrow from someone else...."

"HENRY! Bring the bottle. It's going to be a long night."