20 May, 1498 - Vasco da Gama stands on a beach in Calciut — a city along the Malabar Coast of India — holding a crystal ball. Da Gama’s penchant for crystal-gazing — or spheromancy as it was called during his time — was well known and those seeking to win his favor often began by asking questions on the veracity of his visions, to which he rarely replied; instead preferring to discuss the finer points of civil and maritime law. He was, after all, only an ordinary pirate and not a royal ambassador, totally in over his head at this point and Alvie Reese hadn’t even been born yet.
Nevertheless, scrying had been a long practice of the da Gama clan, each successive generation seeing this same exact moment again and again: Vasco himself on some foreign beach peering deeply into a glass. Fixed on this one singular and repeating insight, one that Vasco had been told about his entire life, so much so that he himself had seen the vision too while practicing crystallomancy, da Gama had no choice but to seek it out for himself. Knowing that he was the one standing on the beach, Vasco journeyed half-way around the known world with four ships — the São Gabriel, the São Rafel, the Berrior (its nickname, officially called the São Miguel), and the São Bras — to find the exact place of his ancestors' visions.
On 2 March the fleet reached the Island of Mozambique, the inhabitants of which believed the Portuguese to be Muslims like themselves. Da Gama infiltrated Mozambique with his crew, disguised as Muslim traders and learned that they traded with Arab merchants and that four Arab vessels laden with gold, jewels, silver, and spices were then in port; he was also told that Prester John, the long-sought Christian ruler, lived in the interior but held many coastal cities. The Sultan of Mozambique — Ali Musa Mbiki (AKA Mussa Bin Bique) — supplied da Gama with two pilots, one of whom deserted when he discovered that the Portuguese were Christians. This inevitably aroused the suspicions of the locals and so in turn da Gama (and his crew) had to flee, departing the harbor while firing cannons into the city. Then, moving onwards to Mombasa — in the vicinity of modern Kenya — da Gama and crew looted Arab merchant ships that were generally unarmed trading vessels without heavy cannons, thus becoming the first known Europeans to visit. Finding themselves unwelcome, (for some reason), da Gama led his crew to the friendlier port of Malinda, whose leaders were having a conflict with those of Mombasa. It was here that da Gama found an illustration of a beach, not unlike the repeating vision, but rather a facsimile or reproduction of his singular obsession.
Through rough translations and lots of promises about goods never to be delivered, da Gama was able to contract the services of a Gujarati pilot who used his knowledge of the monsoon winds to guide the expedition to the beach shown in the picture. After a 23-day run across the Indian Ocean, the Ghats Mountains were sighted, and the Portuguese made for the shore. There da Gama erected a padrão1 to prove he had reached India. Calicut, to be exact, and now here standing on the shore of visons finally realizing a familia prophecy, da Gama found himself in the ghostly hallucinations of his ancestors: holding a glass on this beach, staring deeply, awaiting an insight...
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28 April, 1932 - The trial had carried on for sometime now, yet always kept the House of Lords captive with its meandering turns. Today, the Chamber of the House of Lords — some holdover from a backwards time, with backwards people who uphold backwards customs — called upon the Baron Macmillan of Aberfeldy to pass a statement into the record.
He said that the highest court of appeal in the Empire had been considering "a crime for which in the ingenuity and audacity of its conception it would be difficult to find a parallel."
Eighty feet away, in the small press gallery at the north end of the massive hall, reporters recorded Aberfeldy's statement in all its awkward syntax. The only person who didn't bother to write anything down was a newly employed London reporter named Asher Doyle, who had recently been hired by the crime's victim — Wicklow & Sons LTD — to simply be present for the proceedings. No one else from Wicklow dare show their face. Doyle thought to himself that while members of the firm had just cause not to appear, it was very much in the character of Sir William Wicklow to never acknowledge his defeats: he always affected to have desired his fate, no matter what happened to him. Some people congratulate themselves on this sort of thing, and refuse to acknowledge that they owe their mastery over themselves less to their force of character than to a certain poverty of temperament. Taking everything into consideration, Asher Doyle was more than pleased to serve Wicklow in this capacity — whatever it was to be called, court observer?, reporter for a printing company?, witness to history? — for the position paid more than enough to just sit around in court all day listening to these bloativating politicians going on about Alvie Reese. During the course of the past few years it had become more than clear to Asher that there was no such thing as any logical difficulties for Alvie Reese. In him conception immediately precedes execution. Endowed with a highly fertile imagination and mental activity that's astounding as it is feverish, Reese never wondered if any notion that crossed his mind would be feasible or not. Everything that Alvie Reese imagines appears possible and even easy for him. Like the heart's diastole and systolic movements, his astounding crimes and boundless daring are no more than two motor aspects of the dazzling vivacity of his mental images and the deep darkness in which his residual inhibitions are sunk.
Secretly, Asher Doyle was glad that Alvie Reese had gone after Wicklow and used him so fantastically in his scheme. People tend to enjoy it when those in the upper classes are exposed as the fools we all know them to be, and Reese certainly had found a fanatic fool. In fact, Asher kept in his pocket what he liked to think of as a memento of a friend: one 500 escudo Banco de Portugal note, serial number 1k 02201, with an image of Vasco da Gamaß and the date of 17 November 1922. Asher reached into his pocket to touch the momento as he sat back and listened listlessly to the trial of Alvie Reese carry on before and around him.
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24 November, 1924 - At 10pm, a young chain-smoking Portuguese businessman on the verge of bankruptcy and disgrace sat down at his office typewriter to compose an impossible crime.
He tapped away steadily at the 1918 Smith with its old-style six-row keyboard. His staff of five — an office manger, three clerks, and a typist — had long ago left the second floor office in the deserted downtown commercial section of Lisbon, the Baixa. By 11:30 he finished the four-page document that would help make him the richest man in Portugal in a year, the richest and the most powerful in two. Alvie Reese was twenty-eight.
The Unfinished Biography of Alvie Reese
He was born on September 8, 1896 into a middle-class family with remote claims to historic grandeur. Although his father, August Guilherme Alvie Reese, was a self-taught bookkeeper who had worked his way up to a partnership in a funeral parlor in the São Tiago district of Lisbon, young Alvie Reese was never allowed to forget that his father was a cousin of the great Admiral Reese for whom a leading street in Lisbon was named.2
Besides the funeral parlor, the older Reese developed other business interests such as money lending, a form of legalized gambling still practiced today. In 1914 when his son might have gone on to the university after completing training at a local lyceum — the family savings were lost in an investment in the Portuguese Petroleum Company which dug too many dry holes in its search for Angolan oil.
For a year young Alvie took a course in practical engineering and then abandoned it to get married. He met Maria Luiza Jacobetti d'Avocado at a picnic on a beach near Cascais. She was the daughter of the chief clerk of a British-owned firm of customs specialists in Lisbon. Like Alvie, she, too, had a famous relative: her great-grandfather had been a prominent and prolific Italian playwright named Jacobetti, and oddly enough a member of the secret society known as Carbonari (literally 'charcoal makers') — the Italian sect of the Carbonária. d'Avocado had been sent to a local private French finishing school of girls where she learned piano, French, reading and writing.
She was four months younger than her 20-year-old groom, reasonably attractive with high cheekbones, an almost prominent nose and a disappearing chin. Like most Portuguese women she was rather short and inclined to plumpness. She was very much in love with her deep-voiced, well-dressed fiancé. He was about 5'6" but his very broad shoulders made him seem shorter. He started losing his hair even before he was 20 and to hide his increasing baldness started parting his hair in the middle.
After a year of courtship they were married in August, 1916. Since they weren't 21, Alvie and Maria needed the written, notarized consent of their parents — a document called an emancipation — to get married.
In 1916 Portugal entered the First World War on the Allied side. Instead of going to the European front a married Alvie Reese was easily able to wangle permission to go to Angola. Before leaving he prepared a document that would gain him great respect in the colony: a diploma — No. 4223 — from the "Polytechnic School of Engineering" of Oxford University. The fact that no such school ever existed hardly mattered.
For the wording of the Diploma, which he dated March, 1916, he simply translated the University of Coimbra diploma of an acquaintance. The grade of Bachelor, the diploma read, was awarded to Alvie Reese for his application in the disciplines of: Engineering, Science, Geology, Geometry, Physics, Metallurgy, Pure Mathematics, Mathematics, Paleography, Electrical Engineering, Mechanical Engineering, Applied Mathematics, Chemistry, Experimental Physics, Applied Mechanics, Applied Physics, General Civil Engineering, Civil and Mechanical Engineering, General Engineering, Mechanical and Civil Design.
Furthermore, he was able "to direct industries referent to the grade in which he was specialized." In short, he had studied everything and could do anything.
The diploma was signed by the "Director of the Polytechnic" Harry Spooner3 and the "Chancellor of the University" John D. Peel. To it was appended a gloriously imaginative "Golden Seal of Oxford University" and rubber-stamped "Polytechnic School of Engineering."
In July 1916, Alvie Reese had a copy of his diploma notarized by a dimwitted, accommodating notary in Sintra so that those who wouldn't fully trust a foreign diploma would know it was authentic because a Portuguese notary, in effect, said it was.
In November of the same year, Alvie took his bride to Angola on the west coast of Africa, south of the Belgian Congo. There, in Luanda, the capital city and chief port, he easily got a job in the Department of Public Works, approving building plans and sewage layouts.
The colony of Angola formed a rough rectangle of nearly 500,000 square miles — about twice the size of Texas and 14 times larger than the mother country, Portugal. In 1916 Angola was primarily agricultural since it lacked its own coal and iron. Coffee, corn, cotton, sugar, tobacco and rice were exported.
As the only man with an Oxford diploma in Angola, Alvie Reese quickly felt the need of additional opportunity besides his dull Public Works job. He got another job in the local railroad repair shops as a supervising engineer. He worked there from 5am to 9am and then reported to his office in Public Works.
Angola then had few farm-to-market roads and most of the colonists depended on the railroad to get their produce to the port of Luanda. The trouble was there were few operating locomotives. Most of them were idle because square parts could not be obtained from war-ravaged Belgium where the machines had originally been manufactured. Reese quickly realized that paperwork in the office would never get the locomotives repaired. Boldly, he did something that many Portuguese white-collar worker would rather die than do: he put on overalls. In Portuguese, overalls are known derisively as macoco, or monkey-suit, and in a few days Alvie Reese was laughed at as the 'monkey engineer'. He used to climb into the locomotive boilers to find out what was wrong; obviously he had some engineering aptitudes and when he told the mechanics what was wrong and how to repair it, he turned out to be right often. He was still called 'our monkey engineer' but now it was said proudly. Inevitably he became known as the man who made the trains run — not on time, he just made them run.
His suggestions that new locomotives be bought in the US was quickly adopted. The idea was a good one but the American machines presented certain problems Reese had not anticipated. They were longer and heavier than the Belgian locomotives and when they arrived in Luanda some of Reeses' fellow engineers were certain that their colleague had made a terrible mistake. By employing certain standard stress-and-strain formulas they proved conclusively to the railroad directors that the new machines would be too heavy for their bridges.4
Reese didn't know enough about mathematics, never mind engineering, to dispute them on paper so he proposed a demonstration. He rode with one of the new American locomotives to the first bridge out of Luanda. The train stopped and he announced to the crew and passengers that if none of them trusted his conclusions he was ready to be the only passenger — that is along with his wife and new baby son, Guilherme. The crew and passengers were shamed into going along. The train passed safely over the bridge — and all the other bridges too. It was a great triumph, and as his reputation grew so did his rank.
In March, 1918, he was made Inspector of Public Works and later that year became Acting Chief Engineer of the Angola Railways. Still, he sought new challenges: a friend who had a tobacco farm was about to lose his crop through a lack of sufficient rain and so Reese rounded up 50 natives and in a week built a rough irrigation canal through a hillside using wooden conduits. The crop was saved with the diverted water of a nearby river. His grateful friend gave him half the proceeds of the crop.
Reese fell in love with Angola in spite of the many tropical diseases that were endemic there. He sailed along the extensive coast-line and then undertook many arduous journeys inland, studying carefully the resources of the country and was now lost in wonder as the immensity of the riches of its soil and subsoil became apparent to him. Every kind of produce both of the temperate and torrid zones could be raised there, as though nature had wished to display to man her might and caprice. In the subsoil, gold, silver, copper, tin, iron and diamonds furnished the means required to make the Angola of tomorrow one of the most prosperous lands of the whole continent. All of it seemed laid out just for Alvie's taking.
In May, 1919, when he was not yet 24, he decided it was time to make his fortune in Angola. When he resigned from the post of Acting Chief Engineer of Angola Railways the local Official Gazette made clear the governor of Angola was sorry to lose him: "Alvie Reese has discharged his post with great zeal and competence thus serving the Colony and the Republic well". He then traveled throughout the colony buying up crops and selling in Luanda. With his excellent railway connections his purchased crops always received priority and timely transportation. He traveled with his wife — the two baby sons were left in their home in Luanda in the care of a trusted servant. In many Angolan villages Maria d'Avocado became the first white woman visitor. On their white horses and topees both were splendid relics of 19th century colonialism and 20th century commerce.
He prospered and late in 1919 he went to Europe to pick up some war-surplus bargains. He acquired a trainload of French sandbags made of heavy paper which he sold to Angola as burlap bags. He had deceived the purchasers but they didn't complain very loudly when they found that the reinforced paperbags were just as good as burlap for their needs. On the way back to Angola he found in Lisbon a warehouse filled with twenty unused but rusting German tractors. He was able to buy them for little because no one had been able to make them run. He hired two mechanics and with them worked a long week putting the machines in working order and painting them a bright shade of red. He was able to sell them as new to an Angola importer. Then, in 1922 Reese decided it was time to return again to Lisbon. Having completed his apprenticeship in the world of international business, Alvie had accumulated profits of 600,000 escudos, (then worth about $30,000 American), and so he returned to Lisbon in great style. With two partners, both of whom were named John, and who put in some capital Alvie created Yoyodyne Lda. (Limitado) — their slogan was "the future begins tomorrow". He rented a large 12-room apartment for 1,000 escudos a month, a high rental for Lisbon at that time, even though it was essentially $50/month. He hired a cook, maid, seamstress and a chauffeur to drive his Nash sedan — Yoyodyne had acquired the Portuguese dealership for this purpose alone — and furnished his home and office splendidly. He was the first businessman in Lisbon, he boasted, who had a private apartment adjoining his office so he could rest when he worked late.
During this time, Yoyodyne prospered moderately on its shipments to and from Angola but Reese was personally short of cash chronically because he had over-invested in the South Angola Mining Company (SAMC) which had yet to produce any amount of iron ore. Worse still, in September, 1923, Angola was in a great financial crisis. The Angola escudo, inflated endlessly by the Ultramarine Bank of Portugal (UBoP), had almost no buying power and because of UBoP's mismanagement transfers of currency between Angola and Portugal were prohibited. Alvie looked around hastily for new capital and some new friends he had made via his business partners ('the Johns') interested him in trying to clear up some tangled affairs in Ambaca; the Royal Trans-African Railway Company of Angola (RTARCoA)5 had found itself in some trouble. The Company's shares had fallen to a few escudos each and foreign stock and bondholders were demanding action on unpaid dividends and interest. Alvie's interest in RTARCoA heightened considerably as soon as he discovered there was $100,000 in the company treasury, lent by Portugal to pay off bond coupons. The temptation was too great, he just had to set in motion all that stagnant capital. To gain this end he had only to buy up a sufficient number of shares to enable himself to be elected chairman of the company. There was no time to be lost. A bold stroke would settle everything. In the materialistic world to which Alvie Reese now belonged, there were neither honest men nor rogues — there were only victors and the vanquished. He had no hesitation in gaining control of RTARCoA and making use of all the shareholders' money — but how could a nearly bankrupt businessman get capital to buy the shares of RTARCoA so that he could loot it?
As the head of Yoyodyne Lda. Alvie Reese had discovered the secret of fast checks and slow boats. In connection with the Nash car distributorship he had opened a small checking account with the National City Bank of New York. He loved to issue checks on the New York account because it took at least eight days for a check to reach the bank by sea. With eight days' free use of large sums a smart fellow could do much, particularly if he was careful to cable the money to the New York bank by the seventh day. Hell, even if he forgot — or couldn't get the money in time — why it wasn't too difficult for him to persuade his creditor to try depositing the check once more. A stupid clerical error at the bank, these things happens all the time. So the check would make another sea voyage and, unlike certain baked goods, would travel well. With a little luck and some ordinary business lies Alvie could have free use of large sums of money for up to 24 days.
It was absurdly simple. With some $40,000 worth of checks issued on National City Bank, Alvie Reese bought control of RTARCoA. When he controlled the railway company's reserves he was able to make good on the checks. It was just like printing free money! Using the remaining $60,000 he bought control of the SAMC and talked the company up with the zeal of religious absolutism. The shares rose even though SAMC mining engineers had yet to turn up any iron at all. This was of no worry to Alvie: through his business partners the Johns he had made friends with an interesting lot. One evening in early 1924 a conversation with one of these new acquaintances turned to symbols: a circle with crosses on either pole, a pentagram in the middle, greek letters alluding to a serpent biting its own tail. “These are the signs by which we know each other,” they say to Alvie. Later, the new friend invites him down through tunnels below the city to a velvet-draped room full of figures in cloaks and animal masks, and who Alvie thinks he recognizes as some of the richest and most important people in Portugal – and beyond. “Join us,” offered a woman in an elaborate moth mask, her voice dripping with wealth and privilege. What was Alvie to do? He had heard tales of secret organizations his entire life — his father, who would never let Alvie forget his own distant revolutionary second cousin, would often remark that there was more to business and politics than what is reported in the papers. A secret organization working in the highest echelons. In the shadows. Behind the everyday world. Beyond the headlines and the seats of power. A hidden hand. A kind of company, known as the Carbonária. Of course membership came with an initiation process that was never clearly described. Alvie was then introduced to José Bandeira who was supposed to represent an important Dutch financial group interested in Angolan oil fields. Since SAMC owned some oil claims as well, Alvie Reese was glad his new brothers and sisters had facilitated this introduction but was José a member too, or was this merely a test of the initiation process? At first José Bandeira had left Alvie with the impression he had talked to a powerful member of the organization. However, the next morning he ran into Bandeira waiting for a street car. Alvie gave him a lift in the chauffeured Nash. At Reese's office Bandeira was so impressed he asked Alvie to give him option rights on the mining company stock and volunteered to introduce Reese to his own friends if Alvie ever found himself in Holland. As soon as Alvie realized that José had excellent connections in The Hague, he decided to use Bandeira just as one might use lemons: squeeze them and discard. Bandeira was nothing but an agent for Alvie, a blind collaborator in Reese's own plans, a mere instrument for the attainment of a goal, a gift from the organization.
In May, 1924, Reese went to The Hague and Bandeira introduced him to his friends, Hanes and Meringue. Alvie was charmed by Hanes who proved to know about world finance with great precision — he was more of a financier than a businessman, more practical than theoretical, clear in his logic, a sharp mind tested by failure and triumph. Hanes was used to the whims of destiny. Alvie was somewhat less impressed by Karl Meringue: a typical Dutch trader, smart rather than intelligent but deeply versed in trade deals. During an evening of drinking they reached an informal agreement to make some trading deals in Angola, mainly involving shipment of German beer. The possibility of Hanes and Meringue buying stock in the SAMC seemed dim. Both had the disconcerting habit of asking what the ore production of the firm was; promises of future fortune just weren't good enough.
When Reese returned to Lisbon in June he found Yoyodyne faced by its worst crisis: the Johns wanted out. They had learned of the RTARCoA reserve fund gambit and feared their partner was heading for jail. Certainly his new friends could pull some strings behind the scenes and make these problems disappear, but when he went looking for them in all their usual places it was as if the Carbonária had ceased to exist — as if the entire experience was nothing but a fever dream brought on by newly acquired wealth. By July 5th it was too late, Reese was arrested and taken to Porto that same evening. The charge, that he had embezzled $100,000 from the RTARCoA, had been made by three members of the RTARCoA Board of Directors. Two of them were also directors of Porto banks and they had used their influence to have him brought to Porto for questioning. Porto, a city where Alvie Reese knew nobody. Porto, where all his fortune seemed destined to be lost.
Hanes and José Bandeira had arrived in Lisbon that very day. When they heard Alvie Reese had been arrested they decided to return to The Hague, but Maria d'Avocado who knew how much her husband had counted on an association with the Dutch Financiers, went to their hotel and pleaded tearfully for them to go to the Porto jail to talk to her husband. "He can explain everything," Maria d'Avocado promised through teary eyes. They could not refuse her, and so off to Porto they went. Reese was eloquent in his denunciation of the jealous political enemies who had conspired against him — he could see clearly now that he had been set up by the Carbonária from the beginning. Hanes asked Reese why he didn't solve his problems by selling the mining company stock and putting money back in the RTARCoA treasury. Reese went into a long involved explanation — how could he tell them the stock was worthless? — and the two visitors left him with much self-congratulation on their not getting involved. In Lisbon, Hanes wired his Angola agent to divert the shipment of German Beer he had consigned to the Yoyodyne company. When they returned to The Hague they did not expect to hear from Reese ever again. A pity, he had seemed so promising.
In order to raise money for his defense and possible restitution to the swindled RTARCoA stock and bondholders, Alvie Reese had to liquidate all his assets. He wrote frantically, almost incoherently to his wife from the Porto jail:
My Dear and Holy Wife,
Ferreira [his trusted office manager] has just arrived and I know that until yesterday nothing had happened to the house. Despite my twenty-seven years, I have more experience than all the others I find myself surrounded with here in Porto and beyond. I have lost all hope of getting out of this prison before trial. Do not worry about money, my sweet avocado; do exactly as I tell you about the sale of the house and the payments to be made from the sale of the jewels and the money will come as long as the auction will produce enough. Everything indicates that the whole thing must be done urgently. The jewels and silver you don't sell bring with you here and in the two hours that we can talk every day we can deal with everything.
Don't worry, love, life is like that and we must resign ourselves. Your husband, dear wife, always helped everybody, and now nobody helps him. What a great lesson! Kisses for the kiddies. And bring me some bedsheets.
Millions of kisses from your
loving husband
Alvie Reese spent 54 days in the Porto jail. When he stopped feeling sorry for himself and his bitterness towards the Carbonária hardened into a desire for revenge, he started to do some thinking about the causes of his predicament. Clearly: the prime cause was a simple lack of money. What was money, anyway? Mere paper! Portugal had long abandoned the gold standard. Look what Germany had been doing officially with its cascading inflation of banknotes. When the government needed money it simply kept the presses going. Look at Hungary, look at Italy, everywhere the presses were running overtime. It wasn't even the state itself that kept this privilege in Portugal, oh no everyone knows that Portugal had given this power of making a piece of paper have legal value to a semi-private institution: the Bank of Portugal (BoP). Such an enormous privilege, Alvie thought to himself, can make the state into the slave of the holders of this great power... In a fit of clarity Alvie had the impression that he was outside his body, floating beyond the Earth itself: he could see everything. But no, could it be? A Carbonária plot? Some scheme to own all the money across Europe, if not the world? Alvie had Ferreira bring him everything he could find on the BoP and its organization: by-laws, history, annual reports, clippings, names of current and former board members, anything whatsoever.
It turned out that under the law of 1887, the BoP had the exclusive license to issue banknotes in the country, to the amount of twice its paid-up capital. Furthermore, most of the BoP's stock was held in private hands and the government itself controlled very little. The BoP's considerable annual profits were proportionately divided between the private stockholders and the government. This arrangement only deepened after the revolution of 1905 when, as clues Alvie found suggested, the BoP had issued notes to the extent of more than a hundred times its capital, all in order to accommodate the hard-pressed First Republic. In fact, every time the government was hard-up — all too often and conveniently for the BoP, it seemed to Alvie — it merely turned to the BoP and ordered it to issue more banknotes. Since the banknotes were not convertible to gold or silver after 1891, the only expense involved was the cost of printing. Alvie felt as if he could see the Carbonária's fingerprints all over the BoP, but couldn't find any hard evidence.
In the early 1920s, inflation wasn't anywhere near the insane level of Germany's or Italy's. Between 1918 and 1923 there had been a sixfold increase in the number of escudos issued by the BoP. Naturally, the more paper issued the greater the fall in value of the escudo in terms of uninflated foreign currency. For example, in 1918 a British pound was worth about eight escudos, or roughly about 60¢ per escudo, but by 1923 you could get 105 escudos to the pound, or less than 5¢ per escudo. A pattern began to emerge, and Reese was encouraged by another discovery: he had worked out a fairly complete chart of the functions of the BoP's various departments. To his relief and amused amazement he found there were no departments specifically charged with ensuring that there were no duplicate serial numbers of the banknotes, or that the serial numbers coincided with the BoP's own records. The bank would get the dirty, old bills from its branches and other private banks and these would be washed and pressed and then sorted out by series and number for re-use.6 Alvie worked and reworked his estimates to find the most conservative figure for an issue of banknotes that would not throw out of gear the official BoP machinery. He kept arriving at the same figure: 300 million escudos or just about £3,000,000 — at that time $15,000,000.
The courts of Portugal suspend all operations during the summer months and Alvie had all of July and August to work out his plan: he would take revenge on the Carbonária by beating them at their own game. At his trial on August 27, 1924, the judge acquitted him on the charge of embezzlement but did order him held on a charge of fraud — issuing a $5,000 check on the National City Bank account without adequate cover. On this charge Reese was released on $10,000 bail which he raised by the sale of jewelry, cars, and some loans from friends. In addition he raised another $5,000 to cover the rubber check and with consent of his placated creditors was able to get the case moved to a civil, rather than criminal court, where it was more likely he could win.
After 54 days in prison he emerged a secret but potential conqueror of the BoP and those he was certain were behind its machinery. He rushed to a beach resort near Porto where his wife and three sons — the third had been born in May — greeted him with aplomb. Then that evening he found that his real friends had not deserted him at all. In the finest Porto restaurant he was given a Banquete de Homenagem, a Banquet of Homage, a fairly common social occasion in Portuguese commercial life. Generally, the banquets are used to celebrate a man's promotion in the firm or when his business has closed a big deal. Alvie was overcome with emotion. "My friends," he said between tears, "you have rehabilitated me in my own eyes with this great occasion."
Outside rehabilitation would be useful too. Reese skillfully utilized the press of Lisbon and Porto by getting them to run accounts to reveal to the public the political and financial cabal that had sent him to prison unjustly. It was not a difficult public relations stunt. In Portugal, like most places, there is no easy way of distinguishing between news and ads. Most columns are for sale and paid advertisements are used for far more purposes than one might imagine. Copies of these newspaper vindications were sent to Hanes and Meringue. Reese knew he would need their help in getting out his private issue of banknotes, but he never dreamed of having Hanes or Meringue or anyone else become his accomplice. A secret is only a secret when it is one man's secret. Nor would he accept being a subordinate to Meringue, Hanes, or Bandeira. He was sure they would not accept being subordinate to him, no the only way to win them over would be for him to pretend to be acting on higher orders — those of the BoP itself.
To reach Meringue and Hanes, Reese had to go through his first contact with them: José Bandeira. But his letters and wires to José in The Hague were left unanswered.7 For someone who had been a prisoner, José held an unreasonable superstition: he saw all other ex-prisoners as bearers of bad luck. However, by October 1924, Reese's persistence began to bloom. José became curious enough about a new proposition of making a $5,000,000 loan to Angola — with a 2% commission to those who could arrange it — to wire Reese that he would be glad to meet him in Paris.
From Paris, José took Alvie to Hanes in Berlin where he was staying at Hotel Bristol. Hanes greeted Alvie affably and showed great interest in his plans. Alvie could see that Hanes wasn't too keen on the idea of a million pound loan to what he considered to be a bankrupt colony. They had dinner alone and gradually Alvie led the conversation around to the information he had collected on the secret issues of the BoP. Later in Alvie's suite at the Bristol he showed Hanes his file on the BoP. Alvie convinced Hanes that there had been such secret banknote issues to help the government and the BoP in the past. Hanes fell for the bait: "Alvie," he said drunkenly, "we must approach the Bank of Portugal and acquire the necessary contracts."
Alvie pretended to be doubtful, "I'm not sure Hanes, the secret issues of the Bank of Portugal only seem to occur when those who wish to finance the operation have a connection to a printing house that will keep the entire operation top secret."
"Alvie," hiccuped Hanes, "my dear child, you secure the contracts and I will take care of the rest."
The next day Hanes introduced Alvie to his German lawyer who told Alvie just what conditions would have to be specified in such a contract in order to get a German banknote firm to handle it. Alvie could hardly believe his luck. When he returned to Lisbon in mid-November, 1924, Alvie Reese knew exactly how the first fraudulent contract was to be drawn, he had no worries about the contract's logic. The document that Alvie Reese prepared in his office on the 1918 Smith with its old-style six-row keyboard this November evening was patently foolish, and considering his long-term goal, totally inadequate. In going to war with the BoP and taking on a secret society whose far reaches he could only guess at, Alvie was arming himself with a water pistol. The contract he drew up postulated "an international group of financiers" who were going to lend the Portuguese African colony of Angola £1,000,000 (then about $5,000,000) in exchange for the rights to issue banknotes for the colony to the value of $5,000,000. There were other details but the whole undertaking had the pointlessness of an expensive counterfeiting of American pennies. This is because in November, 1924, Angola's finances were at the worst in its four-hundred year history as a colony. Its currency was not convertible into any other European currency, including the Portuguese. Trade was meager and bankruptcy as common as malaria. Most of the Portuguese settlers would gladly have left if they could find someone to buy their businesses or farms. Angola didn't have any gold or other immediately valuable natural resources and its exports were falling off. No banker who ever took a good look at the colony's balance sheet would lend it £1,000,000. For that kind of money it would make more sense to just buy Angola. Finally, the whole idea that a sovereign government should allow an outside group to duplicate its currency for private use was inconceivable. The last time anyone had the balls to mention something like this was in 1914 when Alfred Toaster, a Belgian financier, offered his invaded and war-ravaged country a loan of $50,000,000 to stabilize the franc. All he asked was for a low rate of interest, plus the rights to print Belgian banknotes.8 He was turned down flatly, and treated as if he had proposed renting out the royal palace as a daycare.
Perhaps it was the obvious hopelessness of the scheme that made it impossible for Alvie Reese to ask wiser men for their opinions. Nevertheless, he had typed the document up on papel selado, the officially stamped paper of all business contracts, public contracts with government, and many other documents in Portugal. The stamped paper can only be purchased in stationery shops which have a license to sell them. Until the mid-twenty century papel selado was still needed for all official business whether you applied for a job, a transcript of a birth or death certificate, deeds of sale or an application for a passport. The fold down the middle provides four lined sides. When preparing the document not a line can be skipped. If you misspell a word you simply repeat the word and add "digo" ("I say"), or correction. The only printing on the Official Seal paper which is issued by the government is a line at the top of the first and fourth pages which simply says Imposto do Selo (Stamp Tax) 1$50, the Portuguese way of writing 1½ escudos — about 8¢ in 1924.
Usually, business contracts typed on papel selado require revenue stamps corresponding to the value of the contract, but since "the government was involved", Alvie Reese decided the stamps weren't necessary. However, there was no getting around the need for notarizations. Reese welcomed this challenge: in his mind notarization was a decorative medal to be added to his masterpiece, increasing the look of authenticity and exactly what the document needed.
Near midnight he closed the office and walked down the narrow street where he had parked the Nash. An agency for the American car dealer had been one of the now unlucky ventures of Yoyodyne Limitado and tomorrow he would have to sell the car in order to meet his office payroll. He drove past the nearby 110-year-old, five story BoP building. He threw it a kiss, certain of his success. He drove idly, savoring his last ride in the car. In the upper portion of the hilly city he passed the Army barracks near the old English Protestant Church and graveyard. At midnight the Army sentry let out his traditional call: "Twelve o'clock and all is well!" in remotely recognizable English. This, like many of the orders in Portuguese cavalry regiments were still given in English, a relic of Wellington's presence. Alvie Reese, who prided himself on his small knowledge of English, threw a vague salute at the sentry. All was not yet well but would be soon.
He drove past the fine apartment building where he and his family had a grand 12 rooms until just a few months ago. With the downturn in his fortunes that, too, had to be sold, along with most of the furniture and his wife's jewels. Finally, he reached the second-rate Metropole Hotel where they had two rooms. The three boys were in one room and he tiptoed in to kiss the sleeping Guilherme Joaquim, six; Manuel Filipe, five, and the baby, José Luis, named after Alvie Reese's new business associate, José Bandeira. In the bedroom Alvie Reese took off his shoes with a sigh of relief, undressed quickly and had the last of his daily quota of 100 cigarettes.
The next morning he took the contract he had drawn-up to the office of a friendly notary, Dr. Avalio de Polio. In Portugal ever businessman must have a notary witness every contract. On starting a business everyone is required to "open a signature" with a notary. Thereafter, the notary confirms the client's signature on every contract by comparing it to the signature on file. The notary is one of the great sinecures of the world: every time a notary confirms a client's signature, they get 75 cents. Better still, they also get 1% of the value of the contract so that a deal for say, $100,000 would net the notary $1,000. Part of this fee is turned over to the state, and in return the notary is supposed to read the contract carefully to make certain it does not contain any illicit or even criminal provisions. The notary is not allowed to assess a fee against contracts made with a government agency.
Dr. Polio wasn't in, but his assistant was. Without reading the contract — everyone knew Alvie Reese was a legitimate businessman of some standing — he added the notary's stamp and signature. After lunch, Alvie took the contract with the notarial seal to the British consulate. Each foreign consulate, he knew, had a copy of the official signatures of the Portuguese notaries. In a few minutes the consular clerk, without reading the contract, verified the fact that it was indeed the signature of Notary Avalio de Polio on the contract. He placed the impressive British consular stamp on the document, collected his fee and returned the contract to Alvie. Later that day Reese sent his confidential clerk, Burns Novelas, to the French and German consulates so that they, too, would authenticate the signature of Notary Avalio de Polio. By evening Reese had an impressive but still incomplete document.
Now he had his trusted office manager, Francisco Ferreira, Jr., a former Army lieutenant, retype the contract on papel selado in both Portuguese and French in the adjoining columns. Ferreira, flattered that his employer had let him in on so secret a state document, did a much better typing job than usual, and even improved on Alvie's broken French in the translation. When he finished typing Alvie Reese told him he was going to get the necessary official signatures.
That night, after all his employees had gone home for the night, Alvie got to work: he was able to get the needed signatures by tracing them. He appended the signatures of Francisco da Cunha Reno Chaves, the High Commissioner of Angola; Daniel Rodriguez the Minister of Finance and Delfirm Costa, a technical representative of the Angola government. He didn't have to worry about how accurate his forgeries were — the consular stamps would vouch for their authenticity. He carefully cut off the two pages of notarizations from the original papel selado and bound it to the new one with tape and sealing wax. On the soft wax he carefully pressed a signet ring with the Portuguese coat of arms. Then, as a final touch Alvie appended two new Portuguese banknotes — one for 1000 escudos (then about $50) and another for 500 escudos. Presumably these were the banknotes that the agreement would permit the international financier group to have duplicated in return for its loan of $5,000,000 to Angola.
Now Alvie Reese was ready to present the impressive contract to two of the three men he had selected to help him in his great scheme. Karl Meringue and José Bandeira were staying at the Avenida Palace Hotel — at that time, the finest in Lisbon — and they had been patiently awaiting a look at the magic contract Alvie Reese had been talking about for several weeks. As Alvie drove towards the hotel, he practiced his little talk about how difficult it had been to secure the contract from the government, how few were in on the secret, how important it was that everything be kept confidential... Then, he realized it was a shame that he could not tell them, or anyone else, about how clever he had been in preparing this contract and how much closer it would bring him to his revenge. He couldn't tell Meringue or Bandeira because if they did not believe the contract was genuine he would not be able to get their cooperation, and most importantly he would not be able to get Meringue to finance the whole operation.
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28 November, 1924 - It had been a frustrating week for Karl Meringue.
At his office in The Hague he received a telegram from Lisbon informing him that the contract was about to be signed. Quickly he decided to combine the trip south with another piece of business in Paris. It was delicate and personal, and he didn't mention to his friend and colleague, José Bandeira, the younger brother of the Portuguese Minister to the Netherlands. Since he couldn't discuss his Paris business with José, Meringue arranged that they leave The Hague separately. José, who had a wonderfully active sex life, would just assume that Meringue wanted to do some heavy visiting of the Paris maisons closes — perhaps Le Sphinx where Meringue could also get a haircut or a pedicure. Meringue didn't know Bandeira well enough — did he know anyone well enough? — to admit that his overwhelming passion was not tits but titles.
In Paris, Meringue had a rendezvous with a baron. Baron Rudolf August Rambert Lehman, Minister Plenipotentiary of the Republic of Liberia to the Third French Republic and the League of Nations, to be exact. The Baron lived in an opulent apartment at 80 Avenue du Bois de Boulogne, just beyond the Porte de Neuilly. It has since become Avenue Foch — named after the hero of the First World War who died in 1929. A pair of Rothschild mansions were on the same street.9 While he waited for the Baron in the anteroom, Meringue took in the lofty ceilinged room encrusted with marble, ormolu, gilt and silk.
Before visiting the Baron, Meringue had done some research. The Baron was an Officier de l'Inspection Publique for "contributions made to French education" — a typical staging area for seeking the Legion d'Honneur — and he belonged to three of the most fashionable clubs. He had a chateau in the country and was married to an American, the former Charlotte Dell. Meringue's most important finding was that the Baron was not listed in any of the German, Austrian or Dutch nobility archives or even those of the Holy See for possible Vatican title. The Baron, born in Amsterdam in 1870 of prosperous German parents, had a few tufts of hair on his almost bald head, a heavy fringe of iron-gray hair around the back of his head and a spiky mustache. His forehead sloped upward through a series of skin ridges and there were rolls of fat on his neck. He dressed with care but without haste, in impeccable dark suits that fit him like a glove and were as comfortable as any other man's casual clothing.
Meringue was quickly dissected by the Baron. He saw a tall, mustached, handsome fellow of about forty who spoke a grammatically correct but unidiomatic French. His hair was fair, close cut and began high up on a bulging forehead. His neck was thick, and his face broad and flat, but with a powerful jaw which promised considerable strength of will, and there was a small port-wine birth mark on the right side of his neck. Meringue, the Baron deduced, had money at one time — probably a war profiteer — but was now probably undergoing some difficulties: the benchmade shoes were beginning to show faint cracks due to lack of proper care and he had probably walked to the house from the nearest Metro stop. There was dust on his shoes and his face showed perspiration. Now what could this fellow want?
Meringue told him. To strengthen his request Meringue had brought with him documents that attested to the fact he was, indeed, the Consul General of the Central American republic of San Salvador and he was also the Consul General of Persia to The Hague. Meringue wanted his Liberian diplomatic passport renewed. It was now ten years out of date. It had been issues in 1914 by Count Matzenauer de Matzenau, who at that time was the Liberian Minister to Imperial Russia. The passport declared that the bearer, Karl Meringue, was the Secretary and Counselor of the Liberian Legation in Petrograd. Meringue paid eleven hundred dollars for it.
What was a Serbian doing as Liberian Minister to Russia? Baron Lehman, the Dutch Liberian Minister to France, knew all about the confusing nature of international relations carried out by marginally significant and almost always impoverished nations. The Liberian Republic for example, had an annual budget of $380,000 in 1923 — (all derived solely from customs duties) — could not afford the expensive apparatus of paid representation abroad by its own nationals. In 1909 the government was officially declared bankrupt by a visiting American commission (a predecessor to the IMF). A small international loan in 1912 enabled the government to continue on a modest level that certainly did not include representation abroad. So it is that Liberia farmed out its diplomatic posts to Europeans who would gladly pay their own expenses as a Liberian diplomat in, say, Paris, in return for membership in the international community. The privileges were mainly social but potentially profitable. Smuggling was a common activity as was the selling of various nonexistent diplomatic posts to whoever might pay for them. A European acting as Minister of Plenipotentiary or consul general could use diplomatic immunity to smuggle much wanted and highly taxed goods such as coffee and cigarettes and even automobiles.
It was all so complicated. Although Meringue had spent eleven hundred dollars on his Liberian diplomatic passport from Count Matzenaure it was worthless even then. Matzenauer had been dismissed from his Liberian post in 1913 for various abuses of power that even the easy-going Liberian government couldn't overlook. Since Liberia had not recognized the USSR, Meringue's passport was clearly invalid on at least two counts. Meringue took the news with grace. The passport was still occasionally useful, although he hated to be seen as a dupe who had purchased a diplomatic passport from a man who had no right to sell it — yet in October 1914 when he had bought it from Count Matzenauer (who was then passing through neutral Holland), there was no easy way to check. Also, for the eleven hundred dollars the Count was going to preform other duties: he would get Meringue into the Almanach de Gotha. Most people didn't know that the standard reference volume also published separate handbooks in German covering the lesser nobility. Listing in these handbooks came only after application to the Almanach's editor, Herr Horfat Wendelmarch. To apply the applicant had to supply historical accounts of his family, birth certificates and a description of the family coat of arms, among other things. The Count made it clear that he would take care of all these annoying details as he had done so many times before. At Matzenau Castle in Prosenyakovsei in Serbia, he had a little workshop for this kind of thing. Was he a real count? The Gotha handbook said he was.