Alves Dos Reis - Banco de Portugal Plot

Banco De Portugal Plot

During his time in jail Reis conceived of what became known as the Portugal Banknote Affair. It consisted of forging a contract in the name of Banco de Portugal (Bank of Portugal)—the central bank, responsible for issuing banknotes and partly private at the time—authorizing him to print banknotes in return for an alleged loan from a consortium to develop Angola. His plan was to use the contract to convince a legitimate banknote printing contractor to make the notes, thereby obtaining notes that would be indistinguishable from those legitimately authorized by the bank.

In 1924 Reis reached out to business contacts of his to assist him in his "confidential mission" for the Governors of the Bank of Portugal. Reis wrote up the fraudulent contract and had it officially notarized by an assistant notary who was too casual and trusting to read it. Counting on a similarly lazy approach among diplomatic staffs, he acquired three certifications for the notarization in the embassies of Britain, Germany and France. Then he rewrote the contract with a French translation, forged the signatures of Bank of Portugal officials (he traced them from the currency in his pocket) and affixed the notarizations, and two new bills as samples, to the contract.

The key to Reis plan was that only he knew that the contract was forged. Trading on the period's widespread cynicism about the monetary policies of governments and on Portugal's reputation for corruption and self-dealing, he convinced the others who assisted in his operation that what they were doing had the clandestine support of the Bank. Reis' key associates, Dutch trader Karel Marang van IJsselveere, German trader Adolph Hennies, and José Bandeira (brother of António Bandeira, the Portuguese Ambassador to the Netherlands) would later claim to have believed throughout the scheme. Reis had been lucky or fortunate in his selection of associates; although currently legitimate, each man had checkered pasts and had no objections to engaging in an enterprise that was technically legal even if shady - especially if it involved such major insiders. Reis alone knew unquestionably that there were no insiders and his various documents worthless, though prosecutors and journalists would later suggest that the continuing credulity of his associates as the scheme progress strained belief.

On the pretext that the supposed loan and issuance would be politically unpopular, and with the implication that it was a bit of sharp practice by bank insiders, the entire operation was conducted in an atmosphere of deep secrecy. It was vital, Reis emphasized to his contractors from Lisbon, that the matter be kept quite confidential to avoid embarrassing their prominent silent partners and risking the whole deal being scotched in the face of political opposition.

Karel Marang approached Joh. Enschedé, an old and respected Dutch printing firm for the job. Reviewing the attached sample notes, they declared them the work of Waterlow and Sons Limited of London, a British printer almost as old and eminent. Since the contract insisted that the new notes be identical to the existing issue, the Dutch firm suggested that Marang take the job to Waterlow since they already had the plates and it was almost impossible to reproduce plates exactly. On 4 December 1924, Marang approached Sir William Waterlow with a letter of introduction from the Joh. Enschedé company. Marang explained that for political reasons the contract required utmost discretion and promised that Waterlow would shortly receive appropriate documentation from Lisbon.

When Waterlow received letters that authorized the printing—more of Reis's forgeries—he accepted the contract. Reis had managed to work out the sequence of bank governor names and serial numbers used by the Portuguese central bank, but had neglected to eliminate numbers already ordered. When Waterlow realized that the bills had the same numbers as some they had previously printed, they alerted "the bank" (meaning Reis.) He also wrote a letter to the governor of the Bank of Portugal, Inocêncio Camacho Rodrigues, in which he talked about the contracts with Marang, but the letter was lost in the mail. Since the contract had specified that the word "Angola" would be overprinted (stamped on top of) the new notes when they reached Lisbon and before transport to Angola, (they were allegedly for colonial circulation only) it was not difficult for Reis to convince the London firm that the reuse of existing serial numbers was not a cause for alarm.