“You will never be able to shut out the cries of the widows and orphans you have ruined”
Jabez Spencer Balfour’s story was one of rags to riches and back to rags again. He was born at Marylebone, Middlesex, on 4 September 1843, the son of temperance workers. His star was soon in the ascendancy. He became Justice of the Peace, the first mayor of Croydon in Surrey (9 June 1883-1884) and Liberal MP for Tamworth (1880) and Burnley (1889).
He was also said to have created the snowballing technique whereby one company finances another when he set up the Liberator Building Society in 1868. He was on the point of appointment to the Cabinet when his empire collapsed and he was forced to flee the country. It was in the 1870s that Balfour’s empire really expanded with the formation of numerous companies including the Lands Allotment Company, George Newman & Co, and Real Estates Co. In 1882 he founded London and General Bank which, among its other duties, laundered the cheques that he wrote for his other companies.
Balfour became a public success and people clamoured to give him their money but he used the new money to pay dividends on the old investments. On 1 September 1892 London and General Bank cheques were returned unpaid and the next day the bank shuts its doors. The whole system crashed with one company after another ending in bankruptcy. Balfour owed 58 million.
Friday 2 September 1892
Balfour resigned his set and fled the country, landing in Argentina in December 1892. Balfour made good his disappearance until he was recognized in the small town of Salta and arrested on 20 January 1894. On 10 April 1895 he was extradited and committed for trial at the Old Bailey on 17 May. He was convicted on 28 November 1895 and sentenced to 14 years’ imprisonment. As Mr Justice Bruce sentenced Balfour, he said, “You will never be able to shut out the cries of the widows and orphans you have ruined.”
Balfour was released in 1906 and his memoirs appeared in the Weekly Despatch. He was attempting a comeback when he died on 23 February 1916 in a third-class smoking carriage on the London to Fishguard express.