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February 23, 2012updated 10 Jan 2016 3:52pm

Fortune’s Spear

By Spear's

Fortune’s Spear: The Story of the Blue-Blooded Rogue behind the Most Notorious City Scandal of the 1920s
Martin Vander Weyer
Elliott & Thompson, 352 pp

Review by Christopher Silvester

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The son of a former chairman of Barclays Bank, Gerard Lee Bevan had been a City veteran for 30 years when he was tried and convicted as a fraudster in 1922. Although his half-brother had told their father that he was a ‘blackguard’ several years beforehand, Gerard had enjoyed the confidence of leading City men. He was an Old Etonian and a Cambridge man, as well as being from a respected banking family, and he stuffed the boards of his companies with fellow Old Etonians, peers of the realm, military men, even a coal-owner who was a crack oarsman. It was a trick that has been copied by many a crook and chancer since.

Martin Vander Weyer, who served time in the banking industry before resorting to the slightly less reprehensible métier of financial journalism, has produced an intriguing financial micro-history that sets Bevan’s crimes in the context of the Forsytean atmosphere of the City between the 1890s and the 1920s. Apart from elucidating the arcane workings of the unregulated stock market, he gives us entertaining vignettes of the various rascals practising at that time.

Bevan cut his teeth during the years of the boom in South African mining shares, and by the time he became senior partner of Ellis & Co in 1912 he was ambitious to do business in North and South America as well as Europe. But the key to his soaraway success was his acquisition of City Equitable, a fire reinsurance company which benefited from the withdrawal from the London market of German and Austrian reinsurers during World War I, and the access it gave him to cash.

Instead of holding its capital and reserves in British government ‘gilt-edged’ stock, City Equitable, under Bevan’s direction, ‘invested’ in more speculative ventures, though its balance sheet told a different story. When the stock market retreated following the post-Armistice boom of 1919-20, Ellis & Co found itself unable to place shares in many of its new issues, so Bevan simply sold these shares to City Equitable or borrowed the cash from City Equitable in order to maintain an active market in such shares for his stockbroking clients.

Bevan surrounded himself with the trappings of wealth that might appeal to a modern hedge-fund manager. He shared a Mayfair townhouse and a country manor in Wiltshire, which he leased, with his wife Sophie, an ardent patriot and fan of eugenics, but he lived for most of the week in a luxury hotel. He also became a keen collector of paintings and porcelain and of trophy mistresses in the form of former dancers and showgirls.

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But when City Equitable’s insurance business faltered, his combination of enterprises collapsed. Among the victims of his fraud were six clerks at Ellis & Co, who not only lost their jobs but also were forced into bankruptcy because they were legally liable for City Equitable shares they held as nominees on behalf of clients.

Bevan fled to Europe with his French mistress Jeanne but was caught in Austria and extradited six months after his flight. When he arrived at Maidstone Prison, he noticed that the governor was wearing an Old Etonian tie and presumptuously proffered his hand in greeting. Released after seven years, he and Jeanne sailed to Cuba in 1931, where he eked out the remainder of his days working as a distillery manager and died of kidney failure in 1936. His body was at first committed to a pauper’s grave until his daughter Christabel arranged for it to be moved to a catacomb.

Bevan was a reckless optimist who blithely risked other people’s money and refused to acknowledge his failures until they had become mired in criminality. He justified his crimes with the observation that ‘far worse things are done in the City every day’. He was not motivated by financial gain, like Bernie Madoff, nor did he seek to aggrandise himself in the public eye, like Robert Maxwell. Instead, his fraud was ‘the interaction of character flaw and financial circumstance, rather than criminality in its purest, wickedest form’. In this instance the character flaw was vanity combined with a sense of invincibility. Vander Weyer gets the measure of the man perfectly and tracks the allusions to the scandal in the literature of the period with eye-twinkling amusement.

Equally though, another moral of this tale is that men such as Bevan are always able to find dupes to rubber-stamp their actions. As the jury foreman at his trial put it: ‘The offences were rendered possible owing to other directors not properly carrying out their duties.’

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