Fraudsters and Charlatans (19 page)

James Kennedy was sent to negotiate the deal. He had told Sadleir that in order to secure an annual income of £5,000, 20,000 Royal Swedish shares would be required. Sadleir replied that this was no problem, and indeed it was not, because he had forged them. He also told Kennedy that the £5,000 annual income could be guaranteed by his brother James, and offered another security, a promissory note of £12,000. This too was a forgery.

The unsuspecting Kennedy carried out the negotiations as required, and the lands were released. They were transferred in trust to the London and County Bank by a deed dated 7 September, which ensured that after their sale any surplus was to go to the Tipperary Bank. The deed was duly sent to the Tipperary Bank board of directors. In due course, minutes of a board meeting approving the deed were available for inspection.

The forged shares were transferred to Eyre, together with a forged statement from the company certifying that they carried 5 per cent annual interest, and the forged promissory note. The package also included the conveyance of part of an estate. This too was a forgery, and in any case, the property in question was already mortgaged for more than its value.

In October Josiah Wilkinson spotted a good investment opportunity. The Newcastle-upon-Tyne Commercial Banking Company was up for sale, following the illness of its managing director. James Sadleir and others purchased it as a going concern, dismissed the manager and appointed Thaddeus O'Shea in his place. The directors were replaced with new men who included James Sadleir, Robert Keating and Farmery John Law. A month later £59,000 was transferred to the London and County Bank, of which £52,000 helped ease the position of the ailing Tipperary Bank.

In the previous few months, London and County Bank managers in Chelmsford, Peterborough, Uxbridge, Luton and Leighton Buzzard had been busily selling the Tipperary Bank shares to their customers at £12 10
s
apiece – but the sales were not going fast enough for Sadleir. He decided to offer a further inducement, with a falsified balance sheet for 1855, for the benefit of the English market alone. Proposing to ‘shove the customers' balances up', he claimed: ‘I know many of the English Joint-stock Banks, in order to give a good appearance to their balance, have constantly trebled the amount of their balances, &c., &c., by making a series of entries. Whereby they appeared to have assets and liabilities to four times the amount they really possessed or had. This has always been kept very quiet, and what at first was a kind of fiction became gradually to be bona fide.'
²⁹

The fraudulent balance sheet showed the issue to him of deposit receipts for sums up to £500,000, supposed to have been received from companies in which he had an interest, balanced by an account in his name as trustee. Despite the now desperate financial state of the Tipperary Bank, he still hoped to adjust the figures to show a profit.

The scheme was not as successful as expected. Seventy English investors bought shares, paying a total of over £15,000, which was not nearly enough to avert disaster. Many were small investors, such as farmers, ministers of religion, doctors, a draper, a miller and several spinsters.

By the end of 1855 John Sadleir's overdraft with the Tipperary Bank was £247,000 (about £15 million at today's values). It had been permitted to rocket to that figure only because he was supplying James with figures that showed he had sufficient investments to cover his liabilities. James later claimed that his brother had told him that the worst was over and that he was confident that after paying all his debts he would have a considerable surplus. The truth was that Sadleir's finances were in a desperate state, of which only he knew the full enormity, and were recoverable only by an amazing stroke of unanticipated good fortune. If he hoped for good luck on the Stock Exchange, he was to be disappointed. He made further losses in January 1856, and the Tipperary Bank was obliged to loan him a further £41,000. By now his total losses from all sources amounted to £1,500,000, of which about two-thirds was probably a result of his speculations on the stock market.

On 1 February 1856 it was necessary to delay disaster by producing, for the benefit of the Irish shareholders, a set of false accounts which showed the hopelessly insolvent Tipperary Bank to be a profitable and valuable concern and declaring a dividend of 6 per cent with a 3 per cent bonus. The list of directors mentioned in the document were no longer with the company; in fact, the only one remaining was James Sadleir. The fraud worked and the ‘unfortunate traders and farmers . . . deluded by this proclamation of prosperity, deposited their hard earnings in this voracious pit with increased confidence'.
³⁰

Sadleir was by now facing inevitable ruin. An order had been served upon him to lodge £6,000 as receiver of the Earl of Kingston, and all his usual sources of money were vanishing. The coffers of the London and County, which had taken away his chequebook, were closed to him, and the Tipperary could scarcely advance him any more without precipitating a disastrous crash. He was reduced to approaching individuals for private loans, on the strength of hastily forged deeds, and misappropriating the funds of a marriage settlement that he was holding in trust. As a last ditch measure he sought out suitable heiresses and proposed marriage. His air of frantic desperation cannot have helped him, and they turned him down.

While many people knew about the perilous position of the Tipperary Bank, it is unlikely that they realised the scale of the crash that was to come. When the London clearing house began to refuse Tipperary drafts, the claim that non-payment was the result of an error bought only a day or two of time.

On 15 February things went from bad to worse. The secretary of the Royal Swedish had spotted something very amiss in the company's books, and confronted Sadleir, who promised to make a full report in three days' time. On the morning of Saturday 16 February Sadleir received a telegraph from James, optimistically stating ‘all right at the branches – only a few small things refused here. If from twenty to thirty thousand over here on Monday morning all is safe.'
³¹
Since Sadleir did not have the money or any hope of raising it, this did not have the soothing effect James might have anticipated. Soon afterwards Sadleir arrived at the office of Josiah Wilkinson in a very excited state, where he paced restlessly about the room, begging for help to save the bank. He showed Wilkinson the telegraph, and proposed a number of desperate schemes to raise loans to save the bank, all of which Wilkinson said he could neither recommend nor adopt. He was in any case extremely loath to loan Sadleir anything. The previous November James had come to see him, asking for £15,000 for his brother, saying that he would not be able to meet his engagements without the money. Although James had claimed that his brother had assets to cover the loan, Wilkinson felt sure that Sadleir's debts were far greater than he admitted. He had refused the loan, and now, hard as it seemed, he refused again. Sadleir clapped his hand to his head and exclaimed: ‘Good God, if the Tipperary Bank should fail, the fault will be entirely mine, and I shall have been the ruin of hundreds and thousands.'
³²
On being told that a deed he had given as security for an earlier loan was about to be registered, he became even more agitated. Wilkinson's firm had previously advanced large sums to Sadleir, but the balances had become so large that they had asked for security. This had been supplied six weeks previously in the form of a deed for the purchase of a property at the Incumbered Estates Court, but the firm had not yet registered the deed. Wilkinson was now so alarmed by the behaviour of his client that he at once dispatched his partner to Dublin to register the deed.

Sadleir spent the rest of the day in the city meeting friends and relatives in a last frantic attempt to raise funds. With all hope gone, he sent his butler to a nearby chemist's shop for a bottle of Essential Oil of Bitter Almonds. After going to his club that evening, he returned home, where he wrote four letters. At midnight he walked to Hampstead Heath.

The contents of Sadleir's last four letters were a matter of intense public speculation, and details were released long before they were read at the resumed inquest. When the
Morning Advertiser
of 23 February carried an article headed ‘Astounding Disclosures' alleging that the frauds and forgeries of John Sadleir would not be under £1 million, copies of the newspaper were changing hands for 5
s
(£14 at today's values).

‘I cannot live,' Sadleir had written to Norris, apparently overcome by a long belated sense of remorse. ‘I have injured many. I committed abominable crimes, unknown to any human being that will now appear to light, bringing my family and others to distress.'
³³
‘Oh how I feel for those on whom all this ruin must fall!' he wrote to Keating. ‘I could bear all punishment, but I could never bear to witness the sufferings of those on whom I have brought ruin. It must be better that I should not live. No-one has been privy to my crimes. They sprung from my own cursed brain alone.'
³⁴
To James's wife, Emma, he wrote: ‘James is not to blame. I have caused all this dreadful ruin. James was to me too fond a brother, but was not to blame for being deceived, and led astray by my diabolical sin.'
³⁵

At the inquest, which resumed on 26 February, and at which the letters were read, the questions arose of whether Sadleir was sane at the time he wrote them, and was the disaster really as bad as he supposed? Despite the best efforts of Sadleir's friends and family, who strove to obtain a verdict of insanity, the court eventually brought in a verdict of wilful self-murder. The family had already anticipated this finding, for Sadleir had been buried in a quiet private ceremony early on the morning of 21 February in Highgate Cemetery in an unconsecrated plot, as was appropriate for a suicide. A Roman Catholic clergyman officiated, and only a few immediate family and close friends were present.

Great sympathy was felt for James Sadleir, who was, said the
Carlow Sentinel
, ‘up to the last moment of the existence of his unfortunate brother, ignorant of the wicked career he had pursued, or of the enormous nature of the terrible speculations he had been engaged in'.
³⁶
‘There is a widespread feeling of pity for the position of Mr James Sadleir the chief victim of his brother's frauds, and upon whose shoulders will fall the full weight of the suicide's transgressions,' said
The Times
. ‘The member for Tipperary is, in fact, a ruined man, and it is said that he has already broken up his establishment, parted with servants, equipage, &c., and is prepared to meet with becoming fortitude the sad reverse which has cruelly crushed his worldly prospects.'
³⁷
At the time of the crash James Sadleir was by far the largest shareholder in the Tipperary Bank, with 1,838 shares, and in time court judgments totalling over £34,000 would be made against him (approximately £2 million today).

The Royal Swedish Railway Company collapsed amid claims by angry investors. Its directors worked round the clock without remuneration to avoid bankruptcy, but to no avail. A committee of investigation finally reported that Sadleir's liabilities to the company were in excess of £350,000 (about £19 million today). The Carson's Creek Gold Mining Company, which had been under Sadleir's total control, was unable to find any trace of its securities, while the angry and dismayed shareholders of the Newcastle Bank were told that it had been emptied of funds.

As the winding-up proceeded, so there were more shocks. When a London solicitor arrived at the Dublin registry offices with a bundle of conveyances of properties sold to Sadleir which had been used as security for loans, all but one were shown to be forgeries, and the only genuine one had had the amount changed from £2,000 to £5,000. Wilkinson's partner found that the deed Sadleir had given him bore forged signatures, and the seal, while genuine, had been transferred from another document. It was only later that he discovered that Sadleir had forged his signature on a cheque.

‘Every hour since he expired reveals some fresh and more flagrant swindle,' commented
The Nation
: ‘the evidence of a wholesale, reckless and desperate system of fraud, accumulate on every mail. For months to come we may expect to see revealed its debris bit by bit.'
³⁸

The greatest tragedies resulted from the failure of the Tipperary Bank, which produced widespread hardship and distress. Ordinary working people, seeking to avoid penury in old age, had entrusted the bank with their life savings. Many had lodged every shilling they possessed.

There was alarm in London; there was wild panic in Ireland. The Tipperary Bank closed its doors; the country people flocked into the towns. They surrounded and attacked the branches; the poor victims imagined their money must be within, and they got crowbars, picks and spades to force the walls and ‘dig it out'. The scenes of mad despair which the streets of Thurles and Tipperary saw that day would melt a heart of adamant. Old men went about like maniacs, confused and hysterical; widows knelt in the street, and aloud, asked God was it true they were beggared for ever.
³⁹

One poor woman lost the £100 she had scraped together to send to her stepson in America. A publican had saved £500, a schoolteacher £200, while a Tipperary police constable had savings of £300 and another just £100. A farmer who had sold his entire crop some weeks before had received a letter of credit which he was intending to take to the Bank of Ireland on his next visit. The delay had ruined him. A boatman, who had over many years accumulated £100 to support an aged parent, appeared at his bank and, refusing to believe that the money could not be paid to him, took out a cord and threatened to hang himself on the spot if it was not forthcoming. All advice and remonstration proving of no avail, a constable was called in to remove him. A farmer had deposited £300, and had intended to take the money out, but had been dissuaded from doing so by his wife. When he learned of the crash, he beat her to death. The bank also held many deposits of public and charitable funds. The parish priest of Tipperary had lodged £2,400 towards the building of a new chapel, and asking for £200 to start the work, found it could not be paid. At Nenagh there was a meeting of the Poor Law Board who had over £1,200 in rates at the Tipperary Bank. A cheque was hurriedly drawn up and a clerk dispatched to withdraw the funds. He returned empty-handed. The Board of Guardians of the Thomastown Poor Law Union had deposited £1,600. They and the Roscrea, Donaghmore and Athy Unions suddenly found their funds unobtainable and the ratepayers now faced being taxed a second time. In the short term many of the unions found they had no funds to pay for the paupers' dinners. £500 of the Thomastown ‘cess', a local land tax, was also in the Tipperary Bank.