The New York herald., 1921-09-19
PORTUGAL CHARGES
BIG EXCHANGE FRAUD
Prominent Oporto Banker Ar
rested and Others Sum-
moned to Inquiry.
L. s. CREDITS INVOLVED
Loan Of S5O.O00,0O0 Through
jefferson Williams as In
termediary Proposed.
u. s. CREDITS INVOLVED

LISBON. Portugal, Sept. 1S.--Pedro
Arraujo, a prominent Oporto banker.
has been arrested for alleged compile
ity with other persons In a huge ex-
change fraud. The arrest followed re-
cent Developments in negotiations be-
tween the Portuguese Government and
company with headquarters in Ant
werp. supposed to be backed by an
American group OF bankers. which
proved to be non existent.
A number of we'll known bankers
have been summoned TO an inquiry
into the alleged fraud. while the ex-
tradition Of the chief Intermediates
abroad is to be asked for.
DR.. Alfonso d'Acosta, former Premier
and Minister Of Finance. in an inter-
view printed in one of the newspapers
to-day expresses faith In the Portuguese
of an American group OF financiera. rep
resented by firm In Paris. who are
reported to have offered to open credit
OF $50. 100000 in Portugal for the put-
chase of toodstuffs.
spcciai Cable 70 Tar NEW EoeK HsiALp.
Copyright. 1921. 5y TIE NEW YORK Hrxatp
New York Herald Bureau,
Paris. Sept. Is.
The relations or Jefferson williams"
with the Portuguese Government in con-
nection with his claim that he could
secure credits of s5o.ooo.ooo from the
United States War Finance Corporation
have been fully aired in the Portuguese
Parliament. which has decided TO pro-
ceed against an international credit
organization Of Antwerp on a charge
OF carrying on negotiations with the
Portuguese Government under false
pretences, with the result that Portu-
guesc exchange was seriously affected.
According to the Information received
oy THE NEW YoRK HERALD bureau from
Lisbon. the proposed deal fell through
washington for information regarding
tho American intermediary. WILLIAMS"
Lisbon was informed that WILLIAMS"
had no connection with the War Finance
Corporation. as he had alleged. 1t was
on his representations. the Lisbon des-
patches said. that the Antwerp Inter
national credit organization" proposed q
loan covering the credits.
Correspondence read before the Cham
Der OF Deputies and published In the offi-
ciai Journal relates that DR.. Alfonso
d'Acosta. Portuguese delegate 20 the
peace conference last May. was ap-
preached by group or Portuguese rep
resentativos OF the Credit International
Organization" Of Antwerp offering credit
OF S50.000.0G0 for supplying American
products. notably wheat and coal II be-
ing presumed that an American group
OF finsnciers was backed by the Ameri-
can Government
on the strength OF this assurance
Minister dAcosta was authorized to ne
sotiate. II being stipulated that the in
terest was TO be not moro than ~ per
cent, with the comr,ission fixed at ono
quarter per cent The Credit Intcrra-
:ionaI ORGANIZATION" ros TO undertake
20 effect the shipment OF supplies direct
10 tho Portuguese Government, but not
holding Itself responsible for non-fulfil-
ment on the par. OF the American finan-
ciers.
Constant delays occurred. The Credit
international Organization'' blamed the
American lnanciers. and although neso-
tiations were for loan only, eventual
ly the Credit International Orsaniza-
tion" insisted on an advance payment In
gold for supplies which had been con-
tracted for. This aroused Inquiries to be
made Of Washington and II WAS learned
that "Willianls' had not the slightest
connection with the Waf Finance Cor
poration.
The Portuguese Govcrnmen, approved
resolutions adopted unanimously In Par
iianent that the courts should take w
the case. Question brought out the fact
that on the strength OF the proposed.
loan exchange rose 90 per cent. within
4 few days. hut afterward dropped back
TO sixpence per escudo.