Accusation and Denial
They stared at each other. ‘What makes you say so?’ the rector asked finally.
‘It was the ratios, the correspondence of the numbers. I finally realised what they meant. Do you happen to know the price of gold on the market today?’
‘Something over £4,’ the rector said finally.
‘In this country, yes. To be precise, in London gold sells for £4 4s 7d per fine ounce. The price has been around that level for years now. But on the Continent the price is much higher. The markets there have been starved for gold, especially since the wars began.
‘And that was the clue I had been looking for. I remembered the details of some gold export deals done in Amsterdam two years ago, well before the Restriction came in. The market paid £6 per fine ounce. After deducting commissions and transport costs totalling about 9s per ounce, the sellers netted £5 11s per ounce; just as your ledger indicated. Once I recalled those deals, the numbers immediately made sense to me. But I feel a fool in front of myself. I should have remembered much sooner.’
Hardcastle gazed at him. ‘You must have been involved in dozens of deals since, and heard about many more. Frankly, sir, I am quite astonished that you remembered at all.’
‘I have a peculiar memory,’ said Ricardo. ‘It retains many things; not all of them wanted.’ He seemed faintly embarrassed. ‘To be absolutely certain, of course, we would need evidence that the East Weald and Ashford has been buying gold.’
‘They have,’ said Hardcastle. ‘One of the partners, Mrs Redcliffe, told me as much. The assumption was that they were trying to shore up their reserves, to increase confidence in the bank.’
‘A sound policy; in theory. I wonder who they were buying it from?’
Something clicked in Hardcastle’s own memory. He ran his finger down the second column. ‘See here,’ he said. ‘August, 3,100. In late July or early August, the East India Company sold over three thousand ounces of its gold reserves. My informant, whom I cannot name, did not say to whom. But I think we now know.’
‘By God, I think we do,’ said Ricardo quietly. ‘Given time, I can probably ferret out the rest of their transactions.’
‘And do you think this gold is being sold in Amsterdam?’
‘I strongly suspect this is the case. The city has the largest gold market in Europe, and offers the best prices. And I know already that one of the Dutch banks, Staphorst, has been dealing in some very large bills of exchange. It is said that these are derived from the gold markets.’
‘Forgive my asking, sir, but how do you know this?’
Ricardo smiled. ‘My father comes from Amsterdam, and we still have family there. One of my cousins is an official with the Stock Exchange. We send each other news from time to time . . . through, shall we say, irregular channels.’
Hardcastle nodded. ‘And how is the profit from these sales returned to the East Weald and Ashford Bank?’
‘I think this is where Germany comes in. The gold is transported to Amsterdam, never mind how for the moment, and sold. The money from the sale is remitted to Staphorst, who then draw up a bill of exchange and send it on. My guess is that the bills go to Hamburg, to Berenberg & Gossler. They’re the largest clearing house for bills of exchange in Northern Europe; they’ll deal with thousands of bills each year, and never know or care where the money comes from. Berenberg & Gossler’ll redeem that bill, and then issue a further bill in Hamburg shillings, which will be sent by packet boat to London. There, someone – and from what George Stone said, I’ll lay money it is the Grasshopper – redeems it and remits the money to the East Weald and Ashford.’ Ricardo paused. ‘At least, that is how I would do it if I were Faversham.’
‘This sounds very complex.’
‘Oh, it is. Deliberately so. It’s meant to make it very difficult for any investigating magistrate, such as yourself, to follow the trail. The money passes through three countries and changes hands several times.’
Munro had called this man a financial genius; it began to look as though he had not exaggerated. ‘Then I am fortunate to have your advice, sir.’
Ricardo looked embarrassed again. ‘It is I who have been fortunate. I have my sources in Amsterdam, and George Stone chose to confide his troubles to me. I merely put the pieces together. Otherwise I would be guessing in the dark.’
‘How long would it take for the money to find its way back to London?’ Hardcastle asked.
‘Three to four weeks, depending on variables: how long the dispatch riders take to cover the ground between Amsterdam and Hamburg; whether the packet boat has favourable winds, and so on.’
Hardcastle nodded. ‘That explains the correspondence between the dates in the first and third columns. The first is the date the shipment is made; the other is the date the remittance is received. We have solved the puzzle.’
‘Not quite. There is one more thing. Remember yesterday, when I said the ratios were declining? From £5 11s or £5 12s to about £4 7s?’
‘Yes.’
‘If Charles Faversham is buying gold in England to sell in Amsterdam, then presumably he is paying the English market rate, £4 4s per fine ounce or thereabouts. If he realises a return of £5 11s, that means a profit of £1 7s per ounce. But over the last two months, that margin has declined, to no more than 3s an ounce.’
‘It’s still a profit,’ said the rector.
Ricardo shook his head. ‘The earlier deals I alluded to were legitimate ones, and the money was remitted directly to the sellers. The secret money trail I described has its costs; all the banks involved will be taking their own commission. And the smugglers will charge rather more to take the gold across the Channel than would an ordinary shipper. I think their transaction costs will be much higher than before; enough to wipe out that 3s profit.’
The stockbroker paused again. ‘The long and short of it is, Faversham’s gold smuggling operation is likely to be losing money,’ he said.
Munro and Cotton had both known this. ‘What do you think has happened?’ the rector asked.
‘I’m afraid it looks very much like fraud. And on no small scale either. I estimate the bank has lost at least £20,000 over the last ten months, and very possibly more. And at the present rate of loss, it will lose at least another £12,000 on these next two transactions; again, perhaps more. The total loss could reach as much as £35,000.’
Very few people in England had an income of £35,000; to most, a sum of that size was incomprehensible. The rector shook his head. ‘And who might be perpetrating this fraud?’
‘An excellent question. Faversham clearly wants to know the answer; that’s why he upbraided poor George Stone.’
‘And that is what Munro wanted to know too,’ said the rector. ‘That must be why he came down to Romney Marsh, to follow the trail of the gold. A fraud of this size could ruin the bank.’
‘I fear it has already done so.’ Ricardo’s face was sombre now. ‘It is clear to me that Faversham has gambled everything on this venture, and lost. They have spent tens of thousands buying gold, issuing paper which can now never be redeemed. The East Weald and Ashford Bank is hollow, and its fall is only a matter of time.’
‘And when it collapses, hundreds, even thousands of innocent people will be ruined.’ The strings of numbers had made the rector’s head ache. For the first time in days, he badly wanted a drink. ‘How can I prevent that from happening?’
‘I do not think you can,’ said Ricardo.
THE RECTORY, ST MARY IN THE MARSH, KENT
8th of September, 1797
By express
My lord,
Information has been laid before me that suggests an organised scheme exists to smuggle gold out of the country. The date of the next shipment is set for the 18th of September, ten days from now, and it is probable that the gold will be loaded onto a ship somewhere off the coast of Romney Marsh. The shipment will be a large one, over 350 lbs deadweight, and it is possible that the gold will be concealed in gunpowder kegs.
Given the urgency of the situation, I propose now to bring in the Customs Service. This matter falls within their jurisdiction, and I do not have the resources or the men to stop the smugglers on my own. The gang involved are very dangerous, and it is likely there is a connection between them and the murders of Mr Munro and Mr Cotton.
I shall of course keep you informed of events as they develop.
*
Yr very obedient servant
HARDCASTLE
THE RECTORY, ST MARY IN THE MARSH, KENT
8th of September, 1797
Mr Cole,
I desire to speak to you most urgently on a matter of importance to you and your service. Will you please call on me at your earliest convenience? It might be useful also if Captain Haddock could attend on us, should he be available.
Yr very obedient servant
REV. M. A. HARDCASTLE, JP
The rector sealed the letters, wondering yet again if he was doing the right thing. Cole was the local supervisor of the Customs Service, and Hardcastle and Lord Clavertye had already agreed to keep the Customs out of this investigation. But Ricardo’s revelation had changed Hardcastle’s mind.
Noakes and the gang who smuggled the gold – for it was obvious now, with hindsight, that the powder kegs Stemp had seen were packed not with gunpowder but with gold – were well armed and violent, and force would be needed to stop them. That meant calling in the Customs Service; who were notoriously secretive, prickly and difficult to work with. They trusted no one, not even their fellow Preventive officers in the Excise Service. Last summer there had even been a pitched battle between the two services, out on the Marsh.
Cole was relatively new in his post, and Hardcastle did not know him well. He appeared to be honest, even if there were some doubts about his competence, and his men were not always of the best quality. Well, they would have to do; if Cole and his disgruntled, underpaid crew of land waiters and coast waiters and tidesmen and riding officers could stop the next run, they might even be able to take the smugglers themselves, and Hardcastle would have his murderers. But at the very least, they would smoke the smugglers out into the open.
Meanwhile, he also had to work out how to solve an impossible conundrum: building a case against Charles Faversham for smuggling, fraud and murder, while at the same time staving off the collapse of the bank. Ricardo had regarded the fall of the bank as inevitable; the stockbroker had returned to London already determined to sever his own connections with it. But Hardcastle thought of Miss Godfrey and Miss Roper, and Stemp and Luckhurst, and Freddie Woodford’s parish funds, and refused to give up just yet.
He told Mrs Chaytor what Ricardo had said, and saw her cool blue eyes narrow as she considered the news. ‘And you are convinced that Faversham himself is behind the fraud as well as the smuggling?’
‘I am. Munro and Cotton were both killed because they were about to expose him.’
‘Will you allow me to play devil’s advocate?’ she asked.
‘Certainly. It is one of the reasons why I value your friendship.’
‘Munro didn’t know the truth, not yet. He was still in search of the truth when he set out for France.’
‘And if he had reached France, he would have learned what Faversham was doing. Faversham killed him to stop him.’
‘But why is Faversham doing this?’ asked Mrs Chaytor. ‘We agreed earlier, did we not, that Faversham has the most to lose by the collapse of the bank? His status as owner of the bank means everything to him; you said so yourself, and you were right. So why would he embezzle from it, knowing that to do so will precipitate its collapse?’
‘Perhaps he knows the collapse is coming, and is feathering his nest while he can.’
‘Taking £35,000 is much more than just feathering his nest. That is a deliberate act of destruction aimed at the institution his father founded, and to which he has dedicated much of his life. I can understand why Faversham might kill to protect the bank. I cannot understand why he would set out to destroy it.’
‘I shall ask him,’ said the rector. ‘Just as soon as Lord Clavertye gives the word.’
The word came by post the following morning.
MIDDLE TEMPLE, LONDON
7th of September, 1797
By express
My dear Hardcastle
I am in receipt of your express of yesterday’s date. The postal system appears to be working with remarkable celerity at the moment.
I saw Sir John Scott the current attorney-general this morning and explained the situation. Notwithstanding the fact that he knows I covet his position, he gave me a cordial hearing. You will find enclosed his warrant authorising you to go to Rye and interview Charles Faversham. Sir John has not consulted the Lord-Lieutenant of Sussex, so I suggest you interview Faversham quickly before his lordship intervenes. The lord-lieutenant is also Master-General of the Ordinance and thus has – both metaphorically and literally – the bigger guns, outranking Sir John in the government.
Good hunting, and let me know what transpires.
Yr very obedient servant
CLAVERTYE
*
At the bank, Charles Faversham received him with just the right blend of cordiality and concern. ‘I was about to write to you, to ask for news. I take it there is none?’
‘Not yet, I fear.’ The rector sat down before the big desk and looked steadily at Faversham. ‘I must begin by telling you that I think the deaths of Munro and Cotton are linked. It is quite possible that the same man, or men, killed them both.’
‘Ah.’ Faversham looked steadily at the rector, his bonhomie quite gone. ‘I wondered if that was so. Are the rest of the partners safe, do you think, or does this murderer intend to kill us all?’
The rector looked him sharply. ‘Why should he wish to do that?’
‘How should I know? None of this makes any sense to me, not Munro’s death, not Cotton’s, nothing. Perhaps some madman has a grudge against the bank, and is stalking us.’
‘I fear the matter is rather more complex than that,’ the rector said. ‘Sylvester Cotton was on his way to me when he was killed. Cotton knew the bank was involved in smuggling, and was ready to confess to me. He was killed before he could do so.’
‘Cotton, a smuggler!’ Faversham stared at him. ‘I am sorry, reverend, but I simply cannot believe it. Cotton was a Quaker and a God-fearing man. He would never stoop to criminality.’
Hardcastle watched him, his eyes narrowing a little. ‘Stoop to criminality,’ he repeated. ‘Yes. A good performance, Mr Faversham. But not absolutely of the best, I fear. A trifle too much melodrama, which gives you away.’
‘I think you had better explain yourself, Hardcastle.’
‘I am about to do exactly that. You have been lying to me all along, Faversham. You lied about Munro’s character and competence; you lied about the Baltic timber deal; and you lied when you said you did not know what Munro was doing before he died. You hoped to throw me off the scent. You wanted me to assume that Munro – secretive, untrustworthy Munro – became involved in the free trade and was then killed by smugglers. Your own role would never be revealed. But you were wrong.
‘The time for lies has now passed. From this moment onward, you and I shall deal solely in the truth. You knew that the East Weald and Ashford Bank had turned to smuggling, because you gave the order that it should do so. You, Munro, Cotton; how many others in the bank knew?’
Faversham stared at him. ‘What the devil are you talking about?’
‘It is true also that you are no ordinary smugglers,’ the rector went on. ‘Your commodity is gold, taken out of England in defiance of the law and sold abroad, the money coming back to you by devious channels through the European money markets, so that payments cannot be traced.’
‘Gold? European money markets?’ Faversham shook his head. ‘I have no knowledge of any smuggling, of gold or otherwise. This is ludicrous.’
‘That’s better. You were almost convincing there. But I know all the details, you see. Four thousand, four hundred and eighteen ounces went out on of the 22nd of July; three thousand one hundred ounces, purchased from the East India Company, on the 23rd of August; need I go on? I can also furnish details of the remittances, too, and the dates you received them. Faversham, you have gone rather pale.’
‘Get out of my office, and out of my bank. At once, do you hear me?’
‘I have not finished.’
‘If you do not leave, my servants will throw you out.’ Faversham’s hand moved towards the silver bell on his desk.
‘Summon your staff, by all means,’ said Hardcastle. ‘Then they can listen, while I accuse you further of defrauding your own bank and your partners, and deliberately plotting the ruin of your deposit holders. And your employees, too, of course, who will lose their livelihood when the bank fails. I don’t imagine any of them will see a penny of the £35,000 you have taken, or will shortly take.’
Faversham’s hand had halted. He sat motionless now, staring at the rector, his once-handsome face showing fear in every line and pore. ‘What did you say?’ he asked, his voice barely more than a whisper.
‘Why, Faversham? Why wreck your own bank? Yes, it is in trouble, but surely it could have been saved. More partners could have been found to bail you out. Now look at it.’ The rector gestured around the room. ‘All of this is about to fall. The bank is doomed, and you are the man who has ruined it.’
‘I am no such thing, damn your eyes!’
‘I do not believe you. I ask again: why? Is money all that matters to you? Is it more important even than the lives of your own partners? And who did you hire to kill them, Faversham? I don’t imagine for one moment you have the courage to pull the trigger yourself; and in any case, that is not how you work. You’re the planner behind the scenes, the man who brokers the deals and pulls the strings. Whom did you pay to kill Munro and Cotton?’
‘You must be mad to imagine such things.’ Faversham rose to his feet, sweating, and walked across to the sideboard. He unstoppered the decanter of madeira and poured a glass full, then drank it in a single draught. After a moment some of the colour came back into his cheeks, and he wheeled around to confront Hardcastle.
‘You have no jurisdiction here. I am not required to answer your questions.’
‘Indeed you are.’ Hardcastle reached into his pocket, pulled out the attorney-general’s warrant and handed it over. Faversham read it, his face guarded, then handed it back.
‘I will say this much to you, Hardcastle. I did not kill Munro or Cotton. I had no reason to. And I have never taken a penny from this bank that was not my lawful share. Yes, someone is defrauding us. Munro found out about it, tried to investigate against my advice and was killed. Cotton discovered something, I don’t know what, and was murdered before he could talk to you. But I am not the embezzler, and I have killed no one.
‘And as for your allegation of smuggling: prove it. Find a single piece of evidence that links us with gold smuggling, or any kind of smuggling at all. You cannot, can you?’
‘I have a ledger detailing dates and amounts of transactions.’
‘Can it be proven that this ledger comes from the East Weald and Ashford Bank? It cannot. Does it say that the numbers refer to gold? It does not. Does it indicate that any gold belonging to anyone was moved unlawfully out of the country? It does not.’
‘So, you know the document to which I refer. You have seen it? Did Munro write it out, perhaps from figures you gave him?’
‘You can prove nothing.’
‘I will find the evidence, never fear,’ said the rector. ‘You claim you are not the embezzler. Very well; tell me who it is, or who you think it might be. If I can apprehend them, you may still save your bank.’
‘Tell you!’ Faversham gave a kind of strangled laugh. ‘Thank you, no. I have no desire to share the fate of Munro and Cotton. I have told you all I will ever tell you. Now, get out.’
‘I can charge you here and now with smuggling and murder. Sir John Scott’s warrant gives me the authority to arrest you and hold you in close confinement.’
‘And when the Duke of Richmond, the Lord-Lieutenant of Sussex and my patron, hears you have no evidence, he will first compel my release, and then devote himself to breaking you.’ Faversham smiled an unpleasant smile. ‘I’ve called your bluff, Hardcastle. What will you do?’
Hardcastle watched the other man for perhaps half a minute, until Faversham began to stir nervously. ‘I shall take my leave,’ the rector said finally. ‘But I give you fair warning. I shall return. Good day, Faversham. Don’t trouble your servants; I know the way to the door.’