FALSE BANK NOTES

Rotorua Morning Post, Volume 2, Issue 225, 17 May 1932, Page 7

FALSE BANK NOTES

A notable case ACTION FOR DAMAGES AGAINST WELL KNOWN PRINTING FIRM. UNAUTHORISED ISSUE. The dismissal of Messrs. Waterlow's appeal in the Bank of Portugal case and the increasing of Por•tugal's damages to £610,392 by the Court of Appeal, was reported by cable recently. On 23rd December, 1930 the Bank of Portugal was awarded £531,851 with costs against Water low and Sons, lithographers and bank-note printers, of Great Winchester street, 'London. The judgement followed an 'action which was one of the most ( remarkable of modern times and which, in the course of its twenty days' hearing, explored recesses of political infrigue and knavery more famiiiar in fiction than in everyday life. The action arose after the circulation of certain unauthorised nobes in Portugal. Subsequently it was found that these" had been fraudulently obtained by a Dutchman named Marang who, with certain associates, had formed the Bank of Angola for the purpose of cireulating the false no.tes by tbe Bank of Portugal. The notes had been print ed by Waterlow and Sons, the officials of which firm accepted the printing order under the impression that it was a perfectly legal and authorised transaction. Without Parallel. The Bank of Portugal suffered heavy losses through the negligence of Waterlow and Sons, and claimed '£1,106, 691. This amount was later reduced -to £627,691, owing to cre■tain credits realised from the assets taken from the ' arrested conspirators. The fraud was described by Mr. Justice Wright, who heard the trial, as "most elaborate and probably without parallel in British commercial life." By a series of ingenious tricks the conspirators succeeded in obtaining delivery of 580,000 notes from the defendants. The plan was carried out by diftt of the ingratiating manners of a Dutchman, Marang. Having obtained the notes the conspira tors formed a bank with the sanction of the Portuguese authorities, but their very success was their undoing because the scale of their operations brought attention, and attention resulted in detection. They were arrested, the notes were seized, and the men were sentenced to terms of imprisonment. As a result of that !crime, a most dramatic and interesting crime not without its political sid3, the Bank of Portugal had to pay out in good notes the sum of £1,000,Q00, and the action was brought. "Aamazing Story." Marang told a most circumstantial tale to Waterlows. He came to the firm with a letter of introduction from a Dutch concern, and saw Sir William Waterlow, ex-Lord Mayor of London, who was then chairman of the firm. He told a story which, the bank submitted, was incredible. It revealed a plot so full of leaks and holes that it was amazing to find that it was successful. Marang said that a group of financiers had decided to assist the Portuguese colony of Angola, which was financially embarrassed. He produced documents, which proved to be forgeries, authorising a Dutchman named Reis, on behalf of the syndicate, to print notes to the face value of £2,000,000, and also the Bank of Portugal's authority for these specimen notes were attached. The documents showed portraits of the poet Devos. Waterlows pointed out that another firm had printed the specimen notes but Marang said that the Vasco de Gama notes, which Waterlows prin+ed for the bank, would be acceptable. Marang impressed upon Waterlows the need for secrecy and all correspondence with the Bank of Portugal, except one letter, passed through the hands of Marang, who, with his associates, forged replies. Not Authorised. Meanwhile, Waterlows' agents in Lishon warned the London house that the Bank of Portugal had not authorised the issue of colonial notes and also that many rumours were cu'-rsnt, regarding which it was unsafe to write, but Waterlows ignored the warning, and delivered the notes after which Marang ordered a furtlier £7500 worth. All the notes were printed in series and were identical with the authorised issue, resulting in the bank being unable to distinguish them. Not all of the 580,000 notes printed were cireulated, but the bank paid Marang's notes to the value of £1, 706,000. Eventually they were forced to withdraw the whole of the Vasco de Gama issue. Reis and another were sentenced at Lisbon to twenty-five years' transportation. Marang was sentenced t two years' imprisonment at The Hague, but in the meantime disappeared. His Lordship, delivering judgment, held that the printers had fallen short of the standard of care which the very special nature of their employ-

ment as a firm of banknote printers required. Waterlows, whose business was founded in 1876, had an issued capital of £1,770,000, and just before the action had paid a dividend of 1U per cent. Last year they paid 9 per eent. Their cash resources just before the judgment stood at £469,000, and they had freehold assets valued at £562,000 and plant valued at £314,000. Their reserve fund was £620,000. Last December the amount of the general reserve was increased to ' £8QQ,000. The firm has already given £330,000 cash security for the appeal to the House of Lords.