FRAUD IN THE ADELAIDE PLOUR MARKET.

Lyttelton Times, Volume X, Issue 605, 21 August 1858, Page 4

FRAUD IN THE ADELAIDE PLOUR MARKET.

The fraud in the flour trade 'for which "Mr. Charles Cleve Collision has recently been tried and convicted hy an Adelaide jury furnishes a warning commentary on the working* of a certain description of banking business that requires to be closely watched.

In the month of June last, Messrs. Col--Ibon and Bayly, of Adelaide, received information that a great rise was rumonred to have suddenly taken place in the price -of flour in Victoria. They proceeded to make use of this information for their own -profit, by endeavouring to bring up the .price of flour in Adelaide to the Victorian level. Mr. Charles Cleve Collison applied to Mr. Tinline, the Manager of the .South Australian Banking Company in Adelaide to allow him to overdaw their account with the Bank, for the purpose of •buying up flour, then selling" at £14 10s. -•a ton in Adelaide, and holding it on till -the rumoured Victorian price of £20 could -be obtained. . The price at which flour was -selling in this colony was thus to be prevented from , undergoing any reduction ■which it might otherwise have suffered by -the introduction of cargoes from Adalaide -at the lower rate above quoted. Mark, that this was to be done, not by the legitimate use of acquired capital, but by •fictitious funds placed to the credit of a -speculating firm by the manager of a public banking company. The receipts -for the flour were to be deposited with the bank. The "dear loaf" was to be pawned as security for the banker's per ventages. £o 10s. for every ton of flour consumed was the sum in which the general public was to be mulcted for the advantag-e of the South Anstralian Banking Company, acting through Mr. Charles '•Cleve Collison, their virtual agent for the time being. In the words of Mr. Gwjoine, the council for the defence, " Collison and Bayly were carrying on business under the auspices of the bank."

Mr. Collison obtained a credit of £1000 from the bank, on the understanding- that the money was to be applied to the purpose of "buying* up a large quantity of ilour in the Adelaide market. He was to obtain delivery of the flour before making" payment for it in fall, giving to the vendor cheques to the amount of £1000, placed "to his credit by the bank, and promises to pay for what might remain due. The receipts for the flour, as sooon as obtained, were to be transferred to the bank. Their would be about £10,000.

From evidence given at the trial, it ap,peai*ed that the object of the bank was to retain the flower as security for previous -advances made to Mr. Collison to the tune of something like. £5000; which, according to the evidence of the bank manager, had already ( been transferred to the debit of profit and loss account, as being in jeopardy.'

We learn further on, in the evidence -given by the bank manager himself, that Mr. Margarey, the party whose flower was to be obtained by Collison, and given by him as security for his bad debt to the bank, was a customer of the self-same banking company. More than this, the information concerning the rumoured rise in the price of flour in the neighbouring -colony was conveyed to Collison by the Tjank manager himself; who, though knowing at the time that Collison was^'n an insolvent condition put him thus in the way of obtaining from another customer of the bank (from whom the information of the rise in flour; would appear to have been purposely withheld) property to the value of £10,000.

The affair has come to light in consequence of another little bit* of roguery having been perpetrated as a consumption of the preceding-. Mr. Collison obtained the £10,000 from the bank, but the bank did not get the flour from Collison! Hence a prosecution by the bank against Its customer for obtaining money under false pretences. We do not cite this case so much as an instance of bad faith and immorality, as on account-of its furnishing in the plot between Tinline and Collison, an illustration of the facility with which, under the present system of 'dependence upon imported stocks lying- in the hands of large holders, a mem.stroke of the pen may raise the-price of broad throughout the length and breadth of an entire colony a full twenty-five por cent. — llobaH Town Mercury: ,