Monday 8 October 2012

Downfall of a Victorian Fraudster

Jabez, pictured on the front cover, was
described by contemporaries as being
short  and stout with spindly legs.
Jabez Spencer Balfour was a Victorian businessman and MP who had some very creative accounting methods. When his fraud was discovered and his massive business empire collapsed, he ran away to Argentina with a young lady who was not his wife (she was in a mental hospital), leaving thousands of destitute victims behind. Some of the people whose lives he destroyed were so distraught they killed themselves: unable to face a future where they had nothing to live on, they preferred death to the workhouse.

Today Jabez is largely forgotten, but in the mid-1890s he was at the centre of a huge scandal, involving financial mismanagement, corruption and fraud. Colourful and charismatic, his life and his misdeeds rival anything you'll find in fact or fiction. The obvious comparison in modern times is newspaper magnate Robert Maxwell, with a touch of 'great train robber' Ronnie Biggs thrown in for good measure. And his story also echoes that of Augustus Melmotte, in Anthony Trollope's 'The Way We Live Now'.

The similarities are not lost on journalist David McKie, who pieced Jabez' history together. Initially looking to write an article about this flamboyant swindler, McKie soon realised he had enough material for a book, and the result is Jabez,The Rise and Fall of a Victorian Scoundrel. I borrowed it from the library because Jabez was, for a time, MP for Tamworth (where I live), and I couldn't put it down. It's a riveting and well written tale, which reeled me in and kept me reading into the early hours of the morning, because I wanted to know what happened to Jabez.

By the way, I should mention that he preferred to be known as J Spencer Balfour, especially after he entered Parliament – perhaps he felt it made him sound more serious and important. But I shall continue to call him Jabez, because it is such a wonderful name!

Born in 1843, his mother was Clara Lucas Balfour, who lectured on literature and the status of woman and was a famous temperance campaigner. Unsurprisingly perhaps, Jabez was also a great temperance man – yet after his fall from grace a collection of fine wines and champagnes was found at his home, one of many contradictions in his life.
Jabez,  painted in watercolour by Sir Leslie
Ward. The painting, which was originally
published by
 Vanity Fair in 1892 is in the
National Portrait Gallery.
However, he owed his success to the temperance movement and its non-conformist supporters. His company, the Liberator Building Society, aimed to help non-conformists buy their own homes, rather than renting. While poorer folk saved what little cash they could spare, Jabez also persuaded wealthy non-conformists to invest. He attracted many powerful backers, and the business went from strength to strength. Jabez was invited on to the board of many other companies, and became involved in ambitious property developments, as well as a scheme to reclaim Brading Harbour (now known as Bembridge) on the Isle of Wight.
A staunch Liberal, he was MP for Tamworth, and later for Burnley, but was rejected by voters in Croydon (where he made his home), so decamped to Burcot, near Oxford, where he lived in style and set himself up as squire, distributing largesse to the local community.

When the crash came, in 1892, investigators discovered an interconnected web of companies (including the London and General Bank) where assets had been grossly over priced, and cheques for huge sums of money were passed from business to business, which may have looked good on paper – but there was no actual money to change hands. The same directors sat on many boards, and did very nicely out of it, while Jabez's trusted henchmen also seemed to have fingers in many pies. On the whole, it seems there were no proper accounting systems or auditing, and little discussion: everything was decided by Jabez, who was known as Skipper.
Jabez when he was Mayor of Croydon.
Protesting his innocence, he insisted he was a wronged man, said it was all a mistake, and claimed the money was there but he needed time to sort it out – then fled to Argentina accompanied by two young women, one of whom appears to have been his lover. All efforts to have him sent home failed, until 1895 when a Scotland Yard detective kidnapped him!

He was jailed, as were some of his business associates, and after his release in 1906 his memoirs about prison life were serialised in the Daily Mail. After that he became a consultant mining engineer (though what his credentials were for this it's hard to know), travelling to Africa, Australia, New Zealand, South America, and Burma, where he hoped to work in a tin mine. He died on a train in February 1916, while travelling from Paddington to Wales, where he was due to start a new job. He was 72.
A sketch made by P Renouard, showing
Jabez at his trial. 
Jabez is a fascinating character, but it's hard to know what his motives were. Alongside the business scam, he did a lot that was good. Over the years the Liberator Building Society did help many people buy a home. In Croydon, Jabez was actively involved in numerous worthy causes to help the community, and he gave £1,000 and a peal of bells for a new Congregational Church. In Burcot he replaced farm workers' cottages, installed gas lights in the village and built an institute for residents.

I can't decide if he was a scoundrel who set out to deliberately defraud people, a victim of his success, or delusional. McKie seems to have the same problem. Did his many business interests get too big and unwieldy, making them difficult to manage? Did something go wrong, and in an effort to put things right did he borrow from one company to pay off another, intending to put the money back? Was he some kind of egomaniac who thought anything he did was OK, and that he was above the normal laws of society – or was he some kind of fantasist who genuinely thought everything was all right?

Whatever the truth, I can't help but feel a certain admiration for him, even though he fooled so many people and wrecked so many lives. He was hard-working, enthusiastic, always grabbed life with both hands, and managed to pick himself up and start all over again when things went wrong. And he does seem to have been genuinely interested in improving the lot of those need. Not that any of that excuses his behaviour, but it does seem he was more complex than I originally thought, and wasn't a total villain. 


  1. What an interesting character. I feel like greed is almost always the motivation for scoundrels.

  2. Paulita, you're probably right - perhaps he started good, and just wanted more and more for himself as he went along.

  3. This does sound interesting - I'll have to see if it's available here in the US. Thanks! and I agree with you about the name Jabez :)

    1. Lisa May, it was absolutely fascinating, and it seemed so fantastic I could hardly believe it was all true!