Hugh said: “You’re Clemmow, aren’t you?”
“Yes, sir.”
“What big withdrawals were there last week — a million pounds or more?”
“Only one,” the clerk said immediately. “The Santamaria Harbor Company withdrew one million, eight hundred thousand — the amount of the bond issue, less commission.”
Hugh shot to his feet. “But they didn’t have that much — they only raised four hundred thousand!”
Clemmow turned pale. “The issue was two million pounds’ of bonds—”
“But it wasn’t underwritten, it was a commission sale!”
“I checked their balance — it was a million eight.”
“Damnation!” Hugh shouted. All the clerks in the room stared at him. “Show me the ledger!”
Another clerk on the other side of the room pulled down a huge book, brought it over to Hugh and opened it at a page marked: “Santamaria Harbor Board.”
There were only three entries: a credit of two million pounds, a debit of two hundred thousand pounds commission to the bank, and a transfer to another bank of the balance.
Hugh was livid. The money was gone. If it had simply been credited to the account in error, the mistake could have been rectified easily. But the money had been withdrawn from the bank the next day. That suggested a carefully planned fraud. “By God, someone is going to jail for this,” he said wrathfully. “Who wrote these entries?”
“I did, sir,” said the clerk who had brought him the book. He was shaking with fear.
“On what instructions?”
“The usual paperwork. It was all in order.”
“Where did it come from?”
“From Mr. Oliver.”
Simon Oliver was a Cordovan and the cousin of Micky Miranda. Hugh instantly suspected he was behind the fraud.
Hugh did not want to continue this inquiry in front of twenty clerks. He was already regretting that he had let them all know about the problem. But when he started he had not known he was going to uncover a massive embezzlement.
Oliver was Edward’s clerk, and worked on the partners’ floor alongside Mulberry. “Find Mr. Oliver right away and bring him to the Partners’ Room,” Hugh said to Mulberry. He would continue the investigation there, with the other partners.
“Right away, Mr. Hugh,” said Mulberry. “All of you get back to your work, now,” he said to the rest of them. They returned to their desks and picked up their pens, but before Hugh was out of the room a buzz of excited conversation broke out.
Hugh returned to the Partners’ Room. “There’s been a major fraud,” he said grimly. “The Santamaria Harbor Company has been paid the full amount of the bond issue even though we only sold four hundred thousand.”
They were all horrified. “How the devil did it happen?” said William.
“The amount was credited to their account and then immediately transferred to another bank.”
“Who’s responsible?”
“I think it was done by Simon Oliver, Edward’s clerk. I’ve sent for him, but my guess is the swine is already on a ship headed for Cordova.”
Sir Harry said: “Can we get the money back?”
“I don’t know. They may have moved it out of the country by now.”
“They can’t build a harbor with stolen money!”
“Perhaps they don’t want to build a harbor. The whole thing could have been a damned swindle.”
“Good God.”
Mulberry came in — and, to Hugh’s surprise, he was accompanied by Simon Oliver. That suggested that Oliver had not stolen the money. He had a thick contract in his hand. He looked scared: no doubt Hugh’s remark about someone going to jail had been repeated to him.
Without preamble Oliver said: “The Santamaria issue was underwritten — the contract says so.” He held the document out to Hugh with a trembling hand.
Hugh said: “The partners agreed that these bonds were to be sold on a commission basis.”
“Mr. Edward told me to draw up an underwriting contract.”
“Can you prove it?”
“Yes!” He gave Hugh another sheet of paper. This was a contract brief, a short note of the terms of an agreement, given by a partner to the clerk who was to draw up the full contract. It was in Edward’s handwriting and it quite clearly said that the loan was to be underwritten.
That settled it. Edward was responsible. There had been no fraud, and there was no way the money could be got back. The whole transaction was perfectly legitimate. Hugh was dismayed and enraged.
“All right, Oliver, you can go,” he said.
Oliver stood his ground. “I hope I may take it that no suspicion attaches to me, Mr. Hugh.”
Hugh was not convinced that Oliver was totally innocent, but he was obliged to say: “You are not to be blamed for anything you did under Mr. Edward’s orders.”
“Thank you, sir.” Oliver went out.
Hugh looked at his partners. “Edward went against our collective decision,” he said bitterly. “He changed the terms of the issue behind our backs. And it has cost us one million, four hundred thousand pounds.”
Samuel sat down heavily. “How dreadful,” he said.
Sir Harry and Major Hartshorn just looked bewildered.
William said: “Are we bankrupt?”
Hugh realized the question was addressed to him. Well, were they bankrupt? It was unthinkable. He reflected for a moment. “Technically, no,” he said. “Although our cash reserve has gone down by one million four hundred thousand pounds, the bonds appear on the other side of our balance sheet, valued at nearly their purchase price. So our assets match our liabilities, and we’re solvent.”
Samuel added: “As long as the price doesn’t collapse.”
“Indeed. If something happened to cause a fall in South American bonds we would be in deep trouble.” To think that the mighty Pilasters Bank was so weak made him feel sick with rage at Edward.
Sir Harry said: “Can we keep this quiet?”
“I doubt it,” Hugh replied. “I’m afraid I made no attempt to hide it up in the senior clerks’ room. It’s gone around the building by now and it will be all over the City by the end of the lunch hour.”
Jonas Mulberry interjected a practical question. “What about our liquidity, Mr. Hugh? We’ll need a large deposit before the end of the week to meet routine withdrawals. We can’t sell the harbor bonds — it would depress the price.”
That was a thought. Hugh worried at the problem for a moment then said: “I’ll borrow a million from the Colonial Bank. Old Cunliffe will keep it quiet. That should tide us over.” He looked around at the others. “That takes care of the immediate emergency. However, the bank is dangerously weak. In the medium term we have to correct the position just as fast as we can.”
William said: “What about Edward?”
Hugh knew what Edward had to do: resign. But he wanted someone else to say it, so he remained silent.
Eventually Samuel said: “Edward must resign from the bank. None of us could ever trust him again.”
William said: “He may withdraw his capital.”
“He can’t,” Hugh said. “We haven’t got the cash. That threat has lost its power.”
“Of course,” William said. “I hadn’t thought of that.”
Sir Harry said: “Then who will be Senior Partner?”
There was a moment of silence. Samuel broke it by saying: “Oh, for goodness’ sake, can there be any question? Who uncovered Edward’s deceit? Who took charge in the crisis? Who have you all looked to for guidance? During the last hour all the decisions have been made by one person. The rest of you have just asked questions and looked helpless. You
Hugh was taken by surprise. His mind had been on the problems facing the bank, and he had not given a
