Fraudsters and Charlatans (26 page)

Many callers simply wanted to borrow money, others had business ideas they wanted to discuss. An American put forward a proposal to market petrol to drive the internal combustion engine, but Hooley did not think the idea had a future and turned him down. Large numbers of visitors were invited to stay to lunch, and there were sometimes several groups eating at the same time, all at Hooley's expense. At breakfast the tables were laden with fruit, eggs, fish, cutlets, kidneys and bacon. This was repeated, with the addition of expensive wines, for lunch and dinner, with snacks in between. Less welcome to Hooley was the assembly of anxious nobility in the corridor, who sent ‘imploring messages asking to see him, but he treats them with contempt. Once he has got from them all he wants they are of no further use, let them . . . “go off the board” . . . if they are dissatisfied, there are others to take their places.'
²⁵

Most of his 1896 flotations were cycle companies, including Singer in June, but in August he was offered the chance of acquiring Bovril. The company, while recognising its international possibilities, had concentrated its efforts on developing the home market. J. Lawson Johnston, the industrious Scotsman credited with the invention of Bovril, and who was certainly the man responsible for its success, must have been seriously misled by someone when he put before the shareholders Hooley's offer to buy the company for £2 million. ‘The new ship will of course embody, in an enhanced degree, all the advantages of the old one,
plus
Mr Hooley's well-known financing facilities and singular capacity for exploiting subsidiary companies the world over . . . We are not financiers: Mr Hooley is; and we must conclude that the business,
plus
Mr Hooley will be capable of much greater things than it could possibly be without him.'
²⁶
Hooley's business acumen was, as would be seen, illusory, and even if it had been genuine he certainly did not intend to use it for the benefit of Bovril. The resolution to sell was carried unanimously on 13 October, and six weeks later Bovril (British Foreign and Colonial) (Limited) was offered at £2,500,000.
The Times
, concerned about the glowing estimates of future profits, commented:

A short while ago the business of the old Bovril Company was sold to Mr ET Hooley for £2,000,000, and it is now offered to the public, and incidentally to the old shareholders, for £2,500,000. We must assume, we suppose, that something has happened to add 25 per cent to the value of the concern since the beginning of October, though it is not easy to imagine what it can be.
²⁷

In May 1897 Hooley added another famous name to his portfolio: Schweppes. He was then at the height of his success and was determined to live up to it. He had already bought a yacht, the
Verena
, for £5,000, not because he was interested in yachting but because it was the thing to do. He now found that the splendid Risley Hall had become ‘too small to satisfy my ambitious tastes',
²⁸
and so he bought Papworth Hall Estate in Cambridgeshire for £70,000. As the farms were in poor condition, he bought out the farmers, ejected them and farmed the land himself. Naturally he had to have the best of everything. He spent £250,000 in renovations, £40,000 in furniture and paintings, and £14,500 stocking the cellars with fine wines and cigars for his visitors. ‘The lavish manner in which I spent my money made me the most popular man in England,' he claimed.
²⁹
‘The public fairly hungered for news of my latest extravagance.'
³⁰

A great believer in the flamboyant gesture, he once bought 200 tons of linseed cake and sent the same number of carts to St Ives to bring it back, the horses decorated with red, white and blue ribbons. ‘I was the greatest advertiser the world has ever known,' he declared; ‘the more they talked about me the more they bought shares when I floated a company.'
³¹
One or two farms were not enough, however, and ultimately he owned about twenty. He later estimated that he was living at the rate of £100,000 per year, of which £10,000 was losses on farming.

Soon after moving in to Papworth he met the under-sheriff of Cambridgeshire and Huntingdonshire, which gave him the idea of becoming sheriff himself. Enquiries were made, strings were pulled, and no doubt money changed hands. Within three months of his arrival Hooley was high sheriff and deputy lieutenant of the two counties, and a magistrate. He was also able to acquire the position of lieutenant of the City of London, a nominal post that required him on public occasions to wear a uniform consisting of a scarlet tunic, blue trousers, a tricorn hat with a white plume and a sword. Some of his titled acquaintances thought he should have a London residence, so he rented 33 Hill Street, Mayfair, for £2,000 per annum, where he entertained all-comers. ‘I made millions and I spent them as though my wealth was inexhaustible,' he said later.
³²

This reckless extravagance also informed his business life. He often entered into contracts only to back out of them, and was therefore obliged to pay compensation. He was not the only man to pay newspapers to ‘puff' his promotions, but the sums he offered were foolishly large. Later he claimed that he had been blackmailed. Other people preferred to see it as bribery.

Whether or not a financial genius, Hooley was now well enough known to feature as such in music hall and pantomime songs:

He walks into the Stock Exchange, and everybody there
Cries ‘Look out! Here comes Hooley, the famous millionaire!'
He can buy a share for twopence, and sell it for a pound,
When he's bought St Paul's Cathedral, he'll buy the Underground.

It's Hooley this, and Hooley that, and Hooley everywhere,
And it's ‘here comes Mr Hooley, the famous millionaire!'
³³

His reputation for being able to conjure up money had spread abroad. Early in 1897 he was approached by an American visitor representing a syndicate who wanted to raise a loan to purchase Cuba, the amount being between $150,000,000 and $200,000,000 (about £30 to £40 million today): ‘the Americans had read so much about [Hooley] in the papers they must have thought him capable of anything'.
³⁴
Even Hooley knew that the Cuba loan was too big for him, but in August 1897 he was tempted by an approach from the Chinese government asking if he could provide a loan of £16,000,000. A possible £1 million was payable in commission. Excited by the vista that opened before him, Hooley sent agents to China to open negotiations. For two months it looked as though the deal was as good as settled, when quite suddenly it fell through: the arch-bluffer had been bluffed. The Chinese had probably always intended to borrow from the Hong Kong and Shanghai Bank and had sought an advantage by playing off one negotiator against another.

Hooley's ultimate ambition was to enter parliament and become Minister of Agriculture. In March 1897 he was adopted as Conservative candidate for Ilkeston, and a handsome donation to party funds ensured his admission to the Carlton Club. He was also hoping for a baronetcy in the Queen's Diamond Jubilee honours list. Since he did not think it would come to him for nothing, he decided to purchase it with good works. He made a donation of a solid gold communion set, profusely decorated with cherubs, to St Paul's Cathedral (later restoration considerably simplified the design, which had made it impossible to clean) and made a great splash with newspaper interviews about setting up a Jubilee charity fund. He claimed to have set aside £400,000, the annual income of which, amounting to £15,000, would be devoted to the relief of the poor in his district. In fact he did not set aside the money, since ‘fortunately for me nobody felt inclined to come forward and demand the payment of the full amount forthwith', he admitted. ‘Everybody believed me in those days, which was just as well.'
³⁵

Shortly before the Jubilee he promised to give £10,000 to the Nottingham General Hospital Victoria Fund provided that a corresponding sum was subscribed in Nottingham. Hooley had provided £2,000, and, as the collection approached its target, the committee asked for the remainder. The Jubilee over, and no baronetcy in sight, Hooley did not see why he should part with any more money and tried to claim that he had only promised to match funds subscribed by working men. After prolonged and acrimonious negotiations, in December 1897 Hooley was eventually obliged to provide a further £5,220. It must have been a wrench, for by then his account with Lloyds Bank was overdrawn. Careless extravagance in both his personal and business life had finally taken its toll.

Hooley's reputation was safe as long as the businesses he promoted did well and people were willing to pay inflated prices, but by May 1897 the cycle boom was ending. Foreign imports and overproduction meant that supply began to exceed demand. Even if Hooley took no interest in a company after he had floated it, city analysts were beginning to take a critical look at his record. In July
The Economist
was reporting that the market in cycle shares had been at a low ebb for some time and many of the companies that had been floated at the height of the boom were unsaleable. Not only had Dunlop shares declined in value, but other industries had suffered – the £1 Bovril shares stood at 17
s
and Schweppes also saw its premiums shrinking. ‘In the past, no doubt, the mere fact that Mr Hooley was known to be interesting himself in any joint-stock undertaking acted as a powerful lever in the movements of prices. . . . But this personal influence is distinctly on the wane.'
³⁶
The Economist
was less surprised at the shrinkages as ‘that there should ever have been any premiums upon capital which were obviously greatly inflated at the outset'.
³⁷
By August it was reporting that ‘people here have learned to look askance upon Mr Hooley's peculiar method of regenerating home industrial undertakings by loading them with heavy additions to their capital accounts that represent nothing but the intermediary profits of himself and his financial associates'.
³⁸

The Beeston Tyre Company did not survive the downturn and went into liquidation in the following year. Grappler survived a little longer and was eventually reconstructed as New Grappler, with Mr Tumulty still in the chair.

As 1898 opened, Hooley was still riding high in public opinion. A supplement called ‘Men of Millions' published by the
Financial Times
in February described him as ‘a young man who has come upon the City during the last two or three years like a whirlwind, and literally carried all before him'.
³⁹
His close associates had by now realised that his day was almost done, and the early months of 1898 were unhappy ones in which he did very little business and saw court cases erode his reputation. Many of the visitors to the Midland Grand were creditors, and so Hooley stayed away, preferring to hold business meetings at the Hotel Victoria.

On 12 February, despite knowing that he was on the brink of bankruptcy, Hooley was at Wolferton stud farm near Sandringham with the Prince and Princess of Wales, the Duke of York and an array of earls, lords and ladies, where he bought a brood mare for 360 guineas and was narrowly outbid on his offer of 1,100 guineas for the popular filly Sea Breeze. His outward good humour was a mask for anxiety about a pressing load of litigation, but for a time his reputation was enough to ensure that, when charged with fraud, he would be given the benefit of any reasonable doubt.

On 27 March Thomas Bayley MP brought an action against Hooley for false representation. He had bought some shares in a Hooley promotion, Fairbanks Wood Rim, on the strength of a draft prospectus which had portrayed a substantial factory premises. The final prospectus as issued to the public showed that the company occupied only a small part of that impressive building. The shares had been purchased from a Mr Thomas Lambert, who denied that he was acting as an agent for Hooley, and as a result the case was dismissed.

In Dublin on 8 May a Mr J.H. Naylor, licensed vintner, brought an action for conspiracy to defraud against a group of alleged co-conspirators – Hooley, Harvey du Cros, the managing director of Dunlop, Hooley's stockbroker, Bulger, and Frederick McCabe of the
Field
. The action was to recover damages for fraudulent misrepresentation on the formation and floating of the Component Tube Company. This was a small concern that Hooley had bought and then dismissed from his memory; subsequently, in November 1896, Bulger and McCabe had taken over the promotion from Hooley. It was alleged that three of the contracts mentioned in the prospectus were fictitious, and the claim that the company was prosperous was false. Hooley, although served with a subpoena, failed to attend court and later protested that he had nothing to do with the wording of the prospectus. The court found for the defendants.

Adolph Drucker MP, whose lack of business acumen and fondness for alcohol had led Hooley to regard him as a fool who could be milked of his money, finally saw the light and on 10 May sued Hooley for fraudulent misrepresentation. Hooley had offered to relieve Drucker of some ‘practically worthless'
⁴⁰
shares in return for others he claimed were worth £8,000. Drucker later found that Hooley had been selling the supposedly worthless shares at a profit, while those he had received in exchange were unsaleable. Drucker had gone to see Hooley to demand his shares back. Hooley refused, but suggested that if Drucker would call upon him the next day he would ‘fix things up'.
⁴¹
Drucker later received a telegram from Hooley saying that he could do nothing for him. The court took the view that, while Drucker had made a bad business deal, there was no evidence of fraud.

If Hooley had forgotten all about the unfortunate shareholders in Grappler, they had certainly not forgotten about him. On 17 May Mr Robert C. Reid, a Belfast merchant, brought an action again Hooley and Rucker, claiming damages for ‘fraudulent conspiracy' and ‘fraudulent misrepresentations' aimed at inducing him to buy shares in Grappler.
⁴²
In 1896 Reid had read in the newspapers about Hooley's offer for Grappler and had bought 100 shares at prices ranging between 37 and 50
s
. In May 1898 Grappler shares were being quoted at 6
s
.