Bank of England secretly bought tens of millions of pounds of government-issued debt in a 'masterful manipulation' of its balance sheet. Image: FT Montage/Getty/Alamy.

UK: Financial Times apologises 103 years late

Financial Times runs clarification on WWI-era article falsely claiming fundraising success

By Dilip Bobb

It isn’t often that a prestigious newspaper runs an apology for a previously printed article but the venerable Financial Times has just done so—-for an article printed on November 23, 1914!

In other words, the apology is 103 years too late but the reason for the historic delay is, well, historic. The original story that appeared in the London-based FT headlined the huge success behind the then British government’s efforts to fund World War I by issuing War Bonds or War Loans. The paper went to town reporting how the project was “oversubscribed, applications were pouring in” and “the public had offered the Government every penny it asked for — and more.”

The conclusion of the morale-boosting piece was to show how strong Britain’s financial position was.

Last week, 103 years later, the paper issued a “clarification.” The first line read: “We are now happy to make clear that none of the above was true.” The retraction was not the result of FT journalists uncovering a long hidden secret but efforts by some individuals at the Bank of England who had dug up ancient ledgers which were still intact and exposed the true picture.

Their research showed that the fund-raising effort by the British was actually a spectacular failure—the government wanted to raise £350 million, but brought in less than a third of that. But, looking for a morale booster for the British public and wary of the Germans taking advantage, money was secretly funneled into the War Bond chests to conceal the shortfall.

The cover-up was uncovered by an employee at the bank’s archive who then recruited others from outside the bank to piece together the fraud which basically involved some creative accounting. They also discovered that John Maynard Keynes, the famous economist, was aware of the deception. They found a memo from him marked “Secret” in which he called it “a masterly manipulation”. The FT wasn’t the only media outlet to fall victim to the cover-up, but the clout of the paper and its stellar reputation for reporting on financial and economic issues, meant that the story on Britain’s robust financial health at the start of the Great War was widely accepted.

Published by APN

ShareShare on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Share on RedditPin on PinterestShare on TumblrEmail this to someonePrint this page