FIVE

The Bank with No Scruples

On the morning of Sunday 17 February 1856 a labourer walking on Hampstead Heath discovered the body of a smartly dressed man lying on the grass behind the historic inn known as Jack Straw’s Castle. The cause of death was not difficult to guess. By the side of the body was a half-pint bottle labelled Essential Oil of Bitter Almonds – Poison. Very little of the liquid remained, and there were traces of it in a silver cream jug that lay nearby and from which the deceased had obviously taken his final draught. A case of razors was beside him, no doubt for the unlikely contingency of the poison not being effective. The body, which was cold and stiff, was removed to the mortuary of Hampstead Workhouse, where a post-mortem was performed. When the stomach was opened, the scent of almonds was so powerful it filled the room.

The identity of this determined suicide was revealed in a handwritten note found in his pocket, which revealed him to be 42-year-old John Sadleir, Member of Parliament, a substantial property owner and founder of the Tipperary Bank. His death was a huge shock in both political and commercial circles, where for a time the talk was of little else. With no obviously pressing reason why Sadleir should have taken his life, it was rumoured ‘that the unfortunate man’s brain had become over-excited by the multiplicity and extent of his speculations’.¹

‘Mr Sadleir was no common man,’ observed the Cork Daily Reporter, ‘but possessed abilities of a very high order, and an inflexibility of temperament that could only be shaken by something of unusual magnitude. . . . His death . . . is indeed a deplorable event, and we record it with very deep regret.’² Freeman’s Journal was quick to express ‘deepest sympathy’ and pronounced Sadleir’s death to be a ‘melancholy catastrophe’.³ He was, said the Morning Advertiser, ‘greatly respected . . . esteemed and admired’.⁴ His ‘untimely end’, said the Morning Chronicle, which revealed that Sadleir’s unwise speculations had resulted in personal losses of £200,000, ‘has cast a gloom over many a circle’.⁵ Sympathy was also extended to the companies that would ‘lose the benefit of his counsel and services’.⁶

It was true that the Bank of Ireland had recently refused to cash Tipperary Bank drafts, but investors had been assured that any problems were the result of Mr Sadleir having forgotten to pay in the money required. Depositors who had hurried to withdraw their funds had found the branches open, and discovered that they paid out promptly. A Thomastown gentleman who asked to withdraw his savings of £800 was told that if he did not give the requisite notice he would forfeit interest. He decided to lodge the notice and leave his money where it was, confident that it would be safe for a few days at least.

When news of Sadleir’s death reached Ireland on 18 February, branches of the Tipperary Bank were again besieged by anxious depositors, many of whom were small tenant farmers who had entrusted their life savings to its care. At Nenagh the manager declined to make payments, though the crowds were somewhat appeased by the bank remaining open to record claims, but in Thurles the surging mob was so disorderly that the police were called to protect the premises.

Not everyone took the bank’s difficulties seriously. ‘There has been a kind of petty run on the three bank offices in our city,’ stated the Kilkenny Monitor. ‘The more ignorant portion of the country people who had small sums deposited, or who held notes of any kind, at once took the alarm, and commenced looking for gold immediately. It is unnecessary to say that this trifling panic altogether confined to a very few of the lower order of the people, caused no inconvenience to any of the establishments here, and it has now almost ceased.’⁷

A reporter from the Limerick Chronicle visited Tipperary on 19 February and found local farmers gathering in small groups on pathways and at shop doors, viewing their deposit receipts with gloomy expressions. On entering the bank he found it packed with customers, most of them farmers with savings of £300 to £1,000, being told by manager Michael Dillon that they could not be paid until 29 February, but that they need not worry as the assets of the bank were more than sufficient to meet any losses. Knowing that the Sadleir family owned a large amount of landed property, many customers were confident that the bank would, in time, be able to pay its investors.

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’.⁸ 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’⁹ 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’.¹⁰

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’.¹¹

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’¹² 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.’¹³ 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’,¹⁴ 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.’¹⁵

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 3d a copy, to their 6d, 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.¹⁶ Aberdeen did not comply, and passed the letter to Sadleir as an ‘act of friendship’.¹⁷

There was more serious opposition from unexpected quarters. Sadleir and those of his political associates who had also accepted appointments had completely underestimated the reaction of the Irish voters, the clergy and the Liberal press, who saw the taking of government office by prominent members of the Irish Brigade as selling out to the establishment. The Nation described Sadleir and his friend and supporter William Keogh, who had become Solicitor General, as having committed ‘one of the most flagrant derelictions of public honour ever beheld. . . . That Mr John Sadleir should go straight over to any party conducive to his own personal interests does not surprise us very much,’ continued the article, referring to Sadleir’s ‘intricate and plotting intellect’, adding ‘Mr John Sadleir is a clever man. Inside that sallow and wrinkled face of his ever play schemes and intrigues by the score.’¹⁸ Either the 1850 portrait was unusually flattering or Sadleir’s cares had weighed heavily upon him. Someone who knew him well commented that ‘his figure was youthful, but his face – that was indeed remarkable. Strongly marked, sallow, eyes and hair intensely black, and the lines of the mouth worn into deep channels.’¹⁹

The new officers were obliged to submit themselves for re-election, and in January 1853 the combined effect of what was seen as his defection from the Irish cause and the rumblings of doubt about Dowling’s imprisonment eroded Sadleir’s vote and he was defeated. The Dowling case must have been particularly damaging, for he was the only defector who was not returned.

While waiting for a new seat to be found he occupied himself with his business life. The Telegraph had not maintained its popularity, and would eventually become a weekly paper. It was and remained a huge financial drain. In July 1853 he was back in parliament, winning Sligo by just eight votes. It was not a happy victory, since it was immediately followed by two petitions against him on the grounds of bribery. Once again, he managed to cover his tracks. Sadleir denied the accusations as usual, and there was insufficient evidence to take matters further.

In November 1853 Dowling’s second action came before the courts. Crotty had died some months before and an examination of his papers had uncovered a devious scheme in which a number of dupes had been used as intermediaries to conceal both the 1852 plot to entrap Dowling and Sadleir’s part in it. Dowling took action against one of the dupes, the blacksmith Edward Lawler, in a case that caused a sensation in both London and Dublin. Acting for Dowling was John McNamara Cantwell, who at last, after his involvement in the Earl of Kingston’s affairs, had the opportunity to expose Sadleir.

Sadleir, who had earlier denied he had taken possession of the bond, was now obliged to admit that he had done so, but claimed that the only reason was to help Crotty. He made every effort to distance himself from all the other proceedings against Dowling, but was forced to admit under questioning that he had wanted to prevent Dowling voting against him. The jury found for Dowling, which effectively meant they believed Sadleir to be guilty of corruption and perjury. Sadleir left the court in disgrace, his political career in ruins. Shortly afterwards he submitted his resignation as Irish Lord of the Treasury. He was still MP for Sligo, but thereafter he never again spoke in parliament or sought public office. ‘He seemed oppressed with care, and walked the lobbies like a fallen statesman, who had no longer patronage to dispense.’²⁰ In the following year Dowling took an action against him for damages, and won £1,100.

The Dowling scandal had caused some uneasiness among the shareholders of the Tipperary Bank, who began to offload their shares. Sadleir’s old ally James Kennedy sold his shares in November, which were eventually taken up by James Sadleir. Vincent Scully had been trying to disassociate himself from the bank for some time. Unwilling to make a public fuss, which might damage the family business, he voiced his concerns in private letters. In September 1853 he wrote to Sadleir asking him to make all necessary arrangements for ‘winding up all dealings between us. I am particular anxious to leave the Tipperary Bank, being entirely ignorant of its affairs, and having lost all confidence in its management.’²¹ In January 1854 he wrote to James, pointing out that he had repeatedly expressed his dissatisfaction at the absence of an audit, and this had now led to ‘the secession of some of its best shareholders, besides injuring the bank in other respects’.²²

James responded that he personally had never objected to holding an audit but that at every meeting the accounts had been gone into most carefully and to the satisfaction of everyone. He believed that public confidence had increased in the last year ‘notwithstanding the conspiracy got up by a portion of the press to injure the credit of the Tipperary Bank, and the number of times that the Kingston Trustees account case has been before the public’.²³

An agreement was finally drawn up in August 1854 for the sale of Vincent Scully’s shares to Robert Keating, as trustee for John Sadleir, but when the company report was published in February 1855 Scully discovered that the transfer had not taken place and that he was still on the list of shareholders. Thoroughly irritated by the delay, he immediately wrote to Sadleir: ‘How on earth do you get on at all with others if this is your way of managing serious business?’²⁴ Despite further letters and promises from Sadleir affairs had still not been settled by 24 March when Scully wrote: ‘It is monstrous to have to write so repeatedly about so simple a matter.’²⁵ The transfer was ultimately made in April.

When the affairs of the Tipperary Bank finally came under public scrutiny it was thought that it had only recently come into difficulty and that it was probably the years 1854 and 1855 that were crucial. What private despair Sadleir suffered as a result of the virtual extinguishing of his political life will never be known, but his desperate and disastrous borrowings bolstered by major fraud and forgery seem to date from this time, when he callously began to use the Tipperary funds and the resources of his relatives as his own personal money boxes. Also at this time, his speculations on the Stock Exchange became wilder. He played the commodities market, with notable lack of success. It was later alleged that he lost £120,000 on sugar in the course of a single day in the autumn of 1855, and at other times he lost £35,000 on hemp and £50,000 on iron.

While Sadleir owned a substantial amount of property, most of it was encumbered by loans. As founder and chairman of the Carson’s Creek Gold Mining Company, he had no difficulty in obtaining a large loan from its coffers, which was due for repayment in January 1855. When he was unable to repay, he offered as security the deeds of an estate in Limerick. The deed was lodged in the London and County Bank. He later removed it without anyone’s knowledge or agreement, and used it as a security for another loan.

The Public Officer of the Tipperary Bank, Wilson Kennedy, who was also well aware of Vincent Scully’s concerns, had watched in dismay as Sadleir became more and more indebted to the bank. James, who was initially confident that his brother’s properties could cover the loans, also became deeply concerned, especially in view of mounting evidence of dishonest transactions. In March 1855 Sadleir had approached the London and County asking them for an advance of £20,000 on a Tipperary Bank bill of exchange, but had not consulted James about it first. James was furious with his brother and on 7 March 1855 he wrote: ‘I would not be burthened with your constant lies any longer. You may provide for the credit or let it alone. Until I see the money ordered lodged I will not accept the £20,000 or move in it. Your constant lying is worse than anything else . . . In fact your doings and impertinence beat anything.’²⁶

Sadleir continued to ask for loans, protesting that without them he would be ruined, to which James responded: ‘I consider your ruin, as you call it, of very little consequence,’ and demanded full legal authority to sell his brother’s properties, ‘as I consider you quite incapable and quite unfit. . . . I am certain you bungled every property you had to do with.’²⁷

On 15 March an agreement was drawn up, granting James and Robert Keating the power to dispose of Sadleir’s lands, but, against the advice of the solicitor James Kennedy, it was never registered or acted upon. James Sadleir, well aware of the fact that the financial fortunes of his brother and the Tipperary Bank were now almost one and the same, was worried that registering the agreement would expose Sadleir’s desperate position. Sadleir held onto his properties, obtained further advances, and plunged still deeper into debt, while Keating washed his hands of him in disgust.

That April Sadleir concocted his most audacious money-making scheme to date. The Tipperary Bank had authorised the issue of 10,000 shares, of which only 4,055 had been taken up, at £10 each. He now proposed to offer the remainder for purchase by English shareholders through the London and County Bank. The difficulty was that the thousands of new shares would dilute the value of established holdings and reduce the amount of dividends. As soon as shareholders realised this, they would sell their holdings, and confidence in the bank would plummet. For the scheme to work, it would have to look as if the shares on offer were not new ones, but transfers from an existing shareholder. Sadleir already had a dupe to hand, an old school friend called Austen Ferrall. In 1846 Sadleir had asked Ferrall to hold shares in trust for a lady cousin who did not want her name to appear as an investor. Ferrall, unaware that the lady did not exist, agreed. Quite what duplicitous scheme Sadleir had in mind on that occasion is unknown, but eleven years later he still had permission to use Ferrall’s name. Large numbers of blank share certificates were prepared and assigned to Ferrall, who, still under the impression that he was helping Sadleir’s lady relative, was happy to agree to their transfer.

English investors were now made an extraordinarily exciting offer. The shares were offered to them at 25 per cent above par, which was only tenable if the Bank was very prosperous indeed, and to show just how solid the investment really was a prospectus was produced, together with the accounts for 1854, which were said to have been approved by the directors at the annual general meeting of 1 February 1855. The figures were, of course, false and showed a profit of double the true value, while vastly overstating the company’s assets. Most of the bank’s assets were in fact the debt owed by Sadleir.

The false certificates were passed to a London and County director, Farmery John Law, who, unaware of the fraud, passed them on to his branch managers, inviting them to sell the shares to their customers. With a commission of ten shillings for each share they sold, they plunged into the task with enthusiasm.

In June 1855 Wilson Kennedy, after protesting against the loans being made to Sadleir, decided that he wanted to have no more to do with the Tipperary Bank and offered his shares to James Sadleir. James, realising that the bank could be damaged if his brother’s overdraft was made public, agreed to purchase the shares. That month another spectre from the past reared its head as the Earl of Kingston obtained a court decree demanding that both Thomas Eyre, who was supposed to have lent him £40,000, and the Tipperary Bank account for the rents received from his estate.

Sadleir did not want to sell his lands, but the prospect that he might do so was a valuable commodity to him, and on the basis of this, in June he obtained £20,000 from the London and County Bank. A month later this had been sucked into the whirlpool of his financial affairs, and he asked for another £15,000. Fortunately for that bank, the directors were not so trusting as his friends and relatives in the Tipperary. Recognising that he was in financial difficulties, they refused the loan and froze his account.

In the meantime James was taking desperate measures to try to save the bank. He arranged a special meeting of the directors in July, and asked for an advance of £95,000 on the security of his brother’s lands, informing them that Sadleir’s overdraft amounted to £40,000 (the figure was far higher, but James knew that if he told the truth not only would he not receive the director’s agreement, but his gross mismanagement would cost him his position). Sadleir’s properties, valued by James at between £450,000 and £480,000, were, he said, to be held by trustees and used to discharge his debts. Trustingly, the directors agreed that the Tipperary Bank would act as guarantor for Sadleir’s debts at the London and County Bank. James was paid the first instalment of the £95,000, which he banked immediately. This kept the Tipperary Bank afloat for a little longer, but when it came to registering the deeds to assign Sadleir’s estates to the trustees, there was a snag: a number of estates had already been assigned to Thomas Eyre as security for earlier loans. The second instalment of the £95,000 was stopped.

In order to release the securities Sadleir embarked on a scheme to defraud the Royal Swedish Railway Company and the by now 75-year-old Eyre. The Royal Swedish required capital to expand, which was to be raised by selling debentures on the Stock Exchange. Sadleir carried out the sale and pocketed the money. He then wrote to Eyre on 13 August offering him shares in the Royal Swedish for the release of his properties, representing the exchange as a valuable opportunity that should be taken advantage of immediately. As an inducement, he stated that under the new arrangement Eyre would receive an annual income of £5,000. Eyre replied that he would agree to the exchange only if advised to do so by James Kennedy. Sadleir immediately telegraphed Kennedy to tell him that Eyre had made a favourable response, and informed Josiah Wilkinson his solicitor that Eyre had agreed to the arrangement. Wilkinson took Sadleir at his word and obligingly released the remainder of the advance. Sadleir now had to move fast, and wrote to Eyre to close the deal, advising him that ‘whatever serves me in this respect, cannot, I believe damage you’.²⁸ He was still concealing from Eyre the fact that the £40,000 loan to the Earl of Kingston had never reached its intended recipient, and even as these letters went back and forth the Earl filed his decree and waited for judgment.

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 10s 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 5s (£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.

Depositors who assumed that the overdraft from the Tipperary Bank was covered by Sadleir’s landed property were dismayed to discover that Sadleir had lodged the property deeds with the London and County Bank, which was not about to give them up; indeed, it had already started to sell them to meet the loans it had made to Sadleir. That company survived, but its reputation suffered by association with Sadleir and there was an ‘extraordinary mania’ among shareholders to sell their holdings, while the ‘evil notoriety attached to Mr Sadleir’s name rendered the retirement from the board of those directors who were in any way personally connected with him imperative’.⁴⁰ The Tipperary Bank laid claim to Sadleir’s properties, but it was not until December 1858 that judgment was finally given in favour of the London bank.

The Tipperary Bank was eventually shown to have liabilities of £430,000, with total realisable assets of £50,000. The entire responsibility to meet the differential fell upon the shareholders, not only those who held shares at the time of the crash, but those who had held shares at any time during the three years prior to the crash. The efforts of some individuals to be removed from the list of liable shareholders resulted in legal battles that in some cases went on for years. Vincent Scully, who had been furious at the delays in selling his shares, was held liable and lost £8,000. His personal reputation remained unblemished and he was returned to Parliament in 1859, but the scandal was the end of political ambition for the Sadleirs. Frank and John, the sons of James Scully, had been left their shareholdings by their father. John, who was a farmer, was obliged to sell the lands and cattle he had inherited and lost in total £20,000. Frank fled to Paris, where the family disgrace continued to weigh heavily upon him and he was eventually placed in an asylum. Robert Keating asked to be removed from the list of those liable, saying he only held the shares in trust for Sadleir, but eventually judgment was made against him and he had to sell his family home to pay the debt. His political career was over, and the London and County Bank insisted he resign solely because he was John Sadleir’s cousin. As the full details of Sadleir’s depredations were made public, so rifts appeared between the Sadleirs and the Scullys that were never healed, and some branches of the families severed connections.

Wilson Kennedy’s career was also shattered, and he was forced to emigrate. Farmery John Law, another innocent man tainted by his association with Sadleir, resigned his post and fled abroad. Thomas Eyre, who had loaned a total of £52,000 (over £3 million today), spent years of litigation to recover his money and was only partially successful. Smaller investors, the widows, spinsters and half-pay officers unable to meet the calls upon their property, were stripped of every farthing they owned, and many of the claims made by creditors against shareholders were never satisfied. The manager of the winding-up proceedings was eventually able to pay depositors two shillings in the pound.

Particularly aggrieved were the English shareholders who had been duped into buying at a premium. The optimists among them banded together, started a collection for a defence fund and took legal advice. The realists fled abroad. Judgment was finally delivered in May, and it was ruled that, despite Sadleir’s frauds, the people he had imposed upon had become genuine shareholders in the company, entitled to share any profits of the concern, and therefore also responsible for the losses. Pursued by the lawsuits of attorneys who had bought up debts due to the company, many had to declare bankruptcy.

‘It is probable that the conduct of no private individual has been productive of a larger amount of social misery than that of the unhappy man who has now terminated a career of deliberate and deep-laid swindling by a deliberate and well-timed suicide,’⁴¹ commented the Annual Register. The Reverend Thomas of Melbourne cannot have been the only clergyman to preach a sermon on Sadleir as a terrible warning to young men.

The man best placed to throw light on the financial minefield that was the affairs of the Tipperary Bank was James Sadleir, who willingly submitted to questioning. As this proceeded, however, public sympathy gradually gave way to disquiet. James was clearly guilty of neglecting his duties to the bank in order to help his beleaguered brother, but had he really, as Sadleir had declared in his suicide letters, had no hand in the frauds? James, it was revealed, had deliberately concealed the agreement made on 15 March from the bank’s directors, and lied to the July meeting, telling the directors that Sadleir’s overdraft was £40,000 when he must have known it was nearer £200,000. The deed of 7 September had never been seen by the Tipperary Bank directors. False names for the directors had been entered on the minutes of a meeting that never took place – and those minutes had been written up by James. Letters were produced from Sadleir to his brother showing that James had full knowledge of the plan to produce false accounts, although James denied personal involvement. Most damaging, however, were documents showing that James had colluded in the fraud on the English shareholders. He had also been responsible for the preparation of false accounts in January 1856, which had been submitted to and approved by a fictitious meeting.

As concern became outright agitation for his arrest, James removed all doubt by fleeing abroad. His wife, Emma, declined to accompany him, and he settled in Zurich, where he was able to live modestly on a small annuity provided by her family. In the following year he was formally expelled from the House of Commons. He may have retained an air of prosperity: on the afternoon of 4 June 1881 he was enjoying a pleasant stroll when he was shot dead by a robber, who took his gold watch.