Fraudsters and Charlatans (17 page)

When the inquest opened on the same day it provided very few clues as to the reasons for Sadleir's suicide. A relative, solicitor Anthony Norris, testified that in the last week Sadleir, who was usually ‘cool and collected', had been haggard, restless and depressed. Calling on him unexpectedly on Saturday evening, he found Sadleir walking distractedly about the room and noticed ‘a very great redness and peculiarity about the eyes as if he had been weeping'.
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The coroner was about to close the inquiry when it was revealed that before Sadleir had departed for Hampstead Heath he had asked for a letter to be sent to his sister-in-law, and left three others on the hall table, instructing his manservant that they should be delivered the following morning if he did not return. Two were addressed to his cousin, Robert Keating MP, and one to Norris, who said he had forgotten to bring it. After some deliberation the jury agreed unanimously that all these letters should be produced, and the inquest was adjourned for a week. On the following day the Tipperary Bank closed its doors and went into receivership.

Sadleir's last letters were more explosive than anyone could have anticipated. Only gradually did the financial world appreciate the scale of his criminality.
The Times
judged him a ‘national calamity'
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who had brought shame on his family and ruin to thousands. He was, quite possibly, the greatest swindler of the nineteenth century.

John Sadleir was born on 17 November 1813 at Shrone Hill near Tipperary. His father, Clement, was a landowner, and his maternal uncle, James Scully, had for some years run a small private bank, which, unusually for the time, had been solvent when it finally closed in 1827. Sadleir was educated at Clongowes Wood College, an institution that provided a broad syllabus, combining scholarship, religious observance and discipline with healthy recreation. The intention was to turn out well-rounded individuals who would be useful and worthy members of society. It was not apparent for some years that John Sadleir was one of its failures.

His public face, that of an austere gentleman of quiet dignity, concealed a chillingly callous nature: he was selfish, secretive and cunning. Unlike so many fraudsters who entice their dupes with lavish display and bumptious self-promotion, ‘in no respect had he the pretentious bearing of an habitual and dashing swindler'.
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Sadleir qualified as a solicitor in 1837, and practised first in Tipperary, then Dublin. In 1838, together with his older brother James, who was manager of the National Bank in Ireland, and younger brother Clement jnr, an accountant, he founded the Tipperary Joint Stock Bank. James Sadleir was appointed director and manager, while the respected James Scully became chairman. This pedigree was vital to the success of the bank. The shareholders of joint stock companies took a far greater risk than investors in the limited liability companies of today. If the company became insolvent, they not only stood to lose their initial investment, but would be called upon to pay the company's debts. No part of their personal property was immune from forfeit. In Sadleir's own words, spoken to the Annual General Meeting of the London and County Joint Stock Bank only nine days before his death, the prosperity of such banks ‘mainly depended on the ability and efficiency of their officers and the integrity of their directors'.
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The early years of the Tipperary Bank were marked by healthy expansion as it opened new branches and acquired investors. In some towns it was the only available bank. Insidiously, however, the rise of the Tipperary Bank masked the growing powers of John Sadleir. Over the years, direct supervision of the bank's affairs gradually moved away from the Scully family and into the hands of the Sadleirs, with James the nominal manager, but the quiet and unassuming John brought matters increasingly under his personal control.

At first, the Scullys did not object to the transfer of influence, but in time Sadleir's first cousin, Vincent Scully QC, who owned 700 shares, became alarmed at the bank's regular failure to carry out an annual audit. Nevertheless, the bank was clearly prospering.

Sadleir's experience as a solicitor and control over the funds of a successful bank gave him ample opportunity to take advantage of the misfortunes of others, which he had no hesitation in doing. The Earl of Kingston was one such disorganised dupe whose extravagances had led him to the brink of ruin. To the desperate Earl, John Sadleir's expertise seemed like the answer to a prayer. In 1845 Kingston was persuaded to apply for a £50,000 mortgage from the Tipperary Bank, but though the papers were signed, the money was never paid to him. Eventually he was obliged to take out another deed pledging his plate and furniture, for which he received less than £17,000. Forced to take out a life policy with the Albion Insurance Company, the Earl was promised an annuity of £4,000, but in the next eleven years he received only £8,000. When the Albion paid £50,000 to the Tipperary Bank to fund the Earl's mortgage, Sadleir calmly pocketed the money and supplied a forged receipt. Sadleir then persuaded Thomas Eyre, Vincent Scully's wealthy uncle, to advance a £40,000 loan to Kingston, with an annual repayment of £3,000. The loan was paid into Scully's account at the Tipperary Bank; only £7,000 ever reached Kingston. John and his solicitor cousin, Nicholas Sadleir, were appointed agents for Kingston's estates and collected the rents, which were intended to pay off the mortgage. Over the next few years Sadleir increased his hold on these estates. He issued understated receipts for the rents and appropriated the difference. The Earl, unaware that Sadleir was using his money for land speculation, slid ever more deeply into debt.

In 1846, greedy for richer pickings, Sadleir sailed for London and took an apartment in the fashionable West End. He was 32 years old, tall, with black curling hair and dark eyes, good-looking, wealthy, well mannered and single. For most men in his position the next step was a suitable marriage. The ideal of the Victorian man of business was to return from his daily toil to a comfortable home, a faithful wife and a brood of well-behaved children, yet Sadleir never showed any inclination to marry. Such liaisons as are attributed to him suggest he courted a beautiful dancer from the Haymarket Theatre, or formed an attachment to either the widow or the neglected wife of a member of parliament. If this is true, then it seems he deliberately chose relationships which could never lead to marriage. He was generally noted for his sober habits and, according to the
Observer
, ‘lived plainly and entertained sparingly, if he entertained at all'
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and ‘appeared a clear-headed active man of business without pretensions to high breeding, but not deficient in proper courtesy. His habits were very moderate; and his residence was rather well than handsomely furnished.'
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His only personal extravagance was the keeping of a small stud of horses for hunting with the Gunnersbury Hounds.

The only thing that motivated John Sadleir was the chance of making money, and accordingly he arrived at the financial centre of Britain at the height of the railway speculation boom. He became a shareholder in several continental concerns and chairman of the Royal Swedish Railway Company. His extensive knowledge of the legal complexities of land ownership and transfer made him sought after as an agent or receiver for estates. Anxious to extend his power and influence, in July 1847 he stood for election as Member of Parliament for Carlow. His connection with the town, through a branch of the Tipperary Bank, and reputation as a businessman of integrity swept him into parliament with a substantial majority. He served as a Liberal Independent and, although ‘deficient in the heartiness and buoyant vivacity of an agitator',
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he joined a small but noisy and influential party of Irish MPs popularly known as the Irish Brigade. In the following year the London and County Joint Stock Bank was delighted to appoint him as its chairman.

Even at a distance he was able to exercise a firm grip on the affairs of the Tipperary Bank, depending on his trusting brother James. When Vincent Scully became a director following the death of chairman James Scully, and expressed his worries about the continued lack of an annual audit, he received only a soothing letter about the success of the bank's business.

The year 1849 saw the foundation of the Incumbered Estates Court of Ireland, a means of simplifying the transfer of lands. To a man of Sadleir's experience this was an ideal opportunity to enrich himself further, and over the next six years he purchased lands worth £233,000 (about £14 million at today's values). One valuable acquisition was an estate of the hapless Earl of Kingston, for whose mounting debts Sadleir was partly responsible. Public concern about this case had not gone away, and, when Scully referred to it in a letter to his cousin, Sadleir replied: ‘It is one of the ugliest cases we have – that is to say, it is one that your profession exaggerate and make a handle of to endeavour to injure the credit of the bank in Dublin; but the bank defies any report.'
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In 1850 Sadleir was sufficiently distinguished for his portrait to appear in the
Illustrated London News
. In that year, however, his greed caused him to overreach himself and as a result he made an enemy who was to have a profound effect on his career. With Sadleir pressurising Kingston to sell his remaining estates, the Earl was forced to seek legal advice, the first wise decision he had made for some time. His new representative, John McNamara Cantwell, discovered that John and James Sadleir were selling off some of the Earl's furniture and plate and at once prevented the sale with an injunction. Examining the accounts of the estate, which was under Sadleir's receivership, Cantwell was unable to discover what had happened to the rents, which amounted to £19,000 per annum (over £1.1 million today). Cantwell regarded Sadleir with dislike and deep distrust. His efforts to recover Kingston's money were to lead to a protracted legal battle, which was to dog the fortunes of the Tipperary Bank for many years.

One reason for Sadleir's keenness to make money from investments was the expense of electioneering, both his own and that of relatives, including his brother James, who also successfully stood for parliament. Press opinion is a vital matter for a politician and Sadleir had tried unsuccessfully to buy the popular
Freeman's Journal
. He decided instead to found and finance a new paper, the Dublin-based
Telegraph
, appointing James Kennedy, a solicitor he had known since his Dublin days, as a front to conceal the paper's true ownership. Launched in January 1852, the paper immediately offered serious opposition to its rivals by selling at 3
d
a copy, to their 6
d
, and quickly achieved a large circulation, forcing its rivals to lower their prices.

Sadleir's slide into political and financial ruin (and the two went hand in hand) was set in motion by the general election of 1852. The tide of enthusiasm that had swept him into parliament in 1847 was on the wane. His Conservative opponent was a local landlord, and it would be a close-run contest, as Carlow was a small constituency and every vote counted. Sadleir was especially anxious to secure the support of Edward Dowling, who controlled the votes of several sub-tenants, and had since 1847 switched his allegiance to Sadleir's opponent. Simple canvassing did not sway him, but it was known that Dowling owed money both to the Tipperary Bank and a Sadleir supporter, Daniel Crotty. To protect himself against non-payment of the debt, Crotty had obtained a bond of indemnity from Dowling and he also had a warrant to enable him to obtain speedy judgement if required. With these things weighing on his mind, Dowling might have seemed vulnerable, yet when Sadleir, his relative Thaddeus O'Shea (who was the manager of the Carlow branch of the Tipperary bank) and Crotty offered both money and a release of part of his bank debts if he would vote for Sadleir, Dowling still stood firm. Reaching Carlow to place his vote, Dowling was astonished to be arrested for debt and taken to prison, where he no doubt protested that his repayment to the bank had not yet fallen due. Sadleir was returned to parliament with a reduced majority. Ironically, he would just have scraped home even if Dowling had voted.

In August came the first act seriously to undermine Sadleir's reputation, when Edward Dowling sued Crotty for false arrest and Sadleir's part in the plot was publicly revealed. It was alleged in court that Sadleir had visited Crotty and obtained possession of the bond, and that Crotty expected him to reimburse his expenses. Sadleir, who did not give evidence at the trial, made a statement in which he denied everything – and once he had denied something he tended to put it out of his mind. He often tried to avoid conflict by delaying facing facts for as long as possible in the hope that, if he forgot them, everyone else would too. In the Dowling case, as with that of the Earl of Kingston, this was a serious mistake. Both these issues would return to trouble him and both would be instrumental in his downfall. In 1852, however, no action could be taken against him, although the affair had branded him as untrustworthy. The aggrieved Dowling was released in August, but while he had been in prison his debts had fallen due and in October he was arrested again and lodged in the Marshalsea debtors' prison in Dublin.

At the end of 1852 Sadleir was offered his first political appointment, as Irish Lord of the Treasury in Lord Aberdeen's coalition government. He was just 39 years old, had been in London for only six years and in parliament for five, yet he had already taken his first step towards a career of distinction; but if Aberdeen was prepared to ignore the doubts raised by the Dowling case, others were not. Three days after his appointment Aberdeen received a letter deploring Sadleir's treatment of Dowling and asking for the removal of ‘this unfortunate blot' from the cabinet.
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Aberdeen did not comply, and passed the letter to Sadleir as an ‘act of friendship'.
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