The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1891-04-09
THE EXCHEQUER
FORGERY.
LCONTINUED.1

ing Smiths examinations, when upon MT.
PercivaPs evidence he was committed Tor
trial. My evidence was not then called for,
but Mr. Percival talked so carelessly dur
ing his examination that Mr.. Maule told me
they intended to put as few questions as
possible to him on the trial, and | must be
prepared to give full evidence OF all the facts
necessary to be proved.
In consequence of Beaumont Smiths con-
fession Ernest Rappallo was taken into Gus
tody and committed for trial as an accom-
plice in the forgery. Solari, his master, had
died in 1910, and Rappallo carried on the
business for the widow. Mime. Solari was
a clever woman, we'll known in theatrical
circles. When the rumors began to spread
about the bills circulated by the two brok-
ers none having up to that time been ac-
tually sold, but merely deposited as security
for loans raised upon them), Nine. SOLAR
took twenty of them Qor $1,000 each) to a
hroker for sale, and got clear off to st.
Petersburg with the proceeds. There was
some question as to the completely OF the
two brokers in the fraud; bat as they came
forward at once and offered 10 give all in
formation in their power and to produce
their books, their evidence against Smith
and Rappalo was allowed.
nesses, including myself, were in attend
ance at the London Coffee-hOuse, adjoining
the Sessions House, Newgate, in case OF our
evidence being required, but without 1t
Grand Jury found true bill against the
prisoners.
Gu the day of trial, November 4th, we
were all in court, where we expected TO be
kept all day, for Wide was engaged as coun-
sci for Beaumont Smith, fee OF $500 hav-
ing been paid to retain him. But to my
great relief Maule came and told me that 1t
had been decided 10 admit Rappallo as
Queens evidence, and in consequence Smith
had determined to plead guilty. When
asked il he had anything to say against SEN
tence being pronounced, Smith read a long
paper admitting his guilt and stating his
conjunction. He was sentenced 10 trans
pOTtatlOn for life, was sent to IAN DlelnenS
Land, and after several years received
pardon on condition OF not returning to En-
gland. 1t was nearly forty years afterward
that heard of his death in Van Dlemens
Land at an advanced age.
After his conviction Beaumont Smith
drew up a statement detailing all the cir
cumstances of the forgery, and he sent IL as
a confidential paper to Lord Monteagle. 1t
was kept very private, but Mrs. Smith had
a COPY of it which she allowed me to read,
and from it l give the following particulars:
Z. 3. Smith was highly connected man,
as l have before mentioned. In his youth
lie was often in pecunlary entanglelnents,
and his associates, young men ike himself,
were often in the same predlcament. They
used to tide over their difficulties by draw
ing accommodation bills ON each other.
After his first marriage Smith led a very
different life, but he never got quite before
hand in money matters, or quite free from
his old companions. 1t was just before the
changes in the EXchequer IN 1884 that he
accepted bill for sl0GO drawn by cousin
Ii, OIL l. IN In
got into the hands of Rappallo. When due
il could not be met, aud was renewed for
larger sum at heavy interest. In about two
wears Smiths debts and liabilities had in
creased TO nearly $1,000, and he saw no pros
pect of meeting them. He had borrowed
one sum of 600 from a money-lender on a
bond at 20 per cent, thus having To pay $50
year to this man alone. During this Pc
riud Rappallo was continually coming to
visit him at his Office. | always diSliked
the looks of this fellow, but l believed that
his business was connected with Sir Sidney
Smiths affairs, which his nephew was az
ranging.
Rappallo saw heaps OF Exchequer bills
lying in our two rooms, and his sharp eye
soon detected that they were already signed
and sealed, a was the custom when he first
visited the Office early in 1854 Indeed, the
bills only required that either OF US should
write in the date to make them complete for
ingly Rappallo pointed cut TO Smith that it
would be easy TO raise money on such bills
by merely depOsiting them at bankers.
He could then use the money in profitable
speculatons, the loans could be paid Off and
the bills destroyed without anyb dy being
bit the wiser, and so they could both
make their fortunes. Beaumont Smith re-
sisted for two years more, but his case be-
came desperate and in an evil hour he con-
scented to do what Rlppallo urged, though
the time had passed when he could have
made use of signed bills, Mr.. Edeu's new
regulation having been introduced. He was
therefore obliged TO forge the signature. La
all other respects the bills were genuine.
The first forgery was in April, 1886, ten
bills of 91000 each, bearing date "March,
1856" These bills were negotiated by So
larl and pledged to his bankers, Messrs.
Ransom & Co. The bills were not presenta-
BILE till March, 1887; therefore later in the
year a second batch for $4,000 was made, a
similar amount raised upon them, with
which sum the former bills were redeemed
and destroyed. By continuing this system
larger amounts were obtained from time TO
time from different quarters, the forged
bills being alWays redeemed and destroyed
before the time of presentation OF bills OF
similar date. Meanwhile, interest had TO be
paid on the oans and the EQUATIONS did
not always succeed In four years the
amount Of forged bills had risen to upward
of e170,000.
When Solari died in 1910 but little re-
manned of the money thus raised. 1t be-
came also more difficult to find capitalists
willing to advance large sums OF money on
EXchequer bills to agents of no very great
credit like Rappallo, Morgan and De Berck
hem. II was this difficulty that led to the
exposure of the fraud. The most inexplic-
able part of the affair has always been to
me how the money was got rid of between
NnI Pc ~. n1fa. liar md hQ
covery in October. 1871. More than s150,0O0
was raised in those twelve months, and the
books of the brokers showed that there was
no loss from the speculations entered into
during that period. There was the interest
and other charges to be paid, but those could
not have amounted to more than $4,000;
and Rappallo had lent 9l2,00O to Louis Ma
pOeOn for his BOulOgne expedition. During
the whole four years Smith himself got very
little; he said he had never had more than
$4,000 out of the whole amount of e400,000
the value of the forged bills and he never
had been able to redeem the 9400 bond
Rappallo was really the more guilty man of
the two, but he escaped scot free, and must
have had coed share OF the plumber.
In March, 1843. an act of Parliam ent was
passed to indemnify the holders of the
forged bills. These holders were divided
into four classes, viz:
/. Genuine holders in the usual course of
2. Genuine holders. but who had perhaps
not used sufficient caution, $4,000
3. Genuine holders as to whom greater
doubt was felt, 9i7 900.
4. The brokers employed in negotiating
the bills, and about whose honesty there
might be SOme suspicion.
Mr.. Goulburn proposed by resolution in
the House Of Commons that. as to the first
three classes, Parliament should compensate
the sufferers, but that the fourth class were
not entitled to any compensation at all.
The general res lit was that out OF 377
forged el0O0 bills (of which thirty-three had
been funded before thu forgery was dis
covered), there was an amount of e262 600,
for which Mr., Goulburn thought the public
might be called upon to make compensation
And this was done accordingly. Mr.. Goul-
burn also stated that "the precautions since
taken were such as lie believed would place
it beyond the skill of the most ingenious
person to repeat the forgery."-H. w. CHS
holm in Temple Bar.