No. 515.
Mr. Birney
to Mr. Evarts.
The Hague, March 10, 1880. (Received March 29.)
Sir: Nothing that has occurred within the borders of the Netherlands during the past twelve months has excited more intense interest than the extensive defalcation in which Messrs. Lodewick Pincoffs, and H. Kerdijk, of Rotterdam, were the chief participants. As the former took refuge in the United States no event has given greater occasion for the expression of regret by the officers of government here, and of other citizens, for the absence of an extradition treaty between this country and the United States.
As you have been under the necessity of considering an application for extradition, a brief summary of the circumstances of the case may interest you, especially as the terms of such a treaty are now under advisement. I discovered, when last in the United States, that the newspaper accounts at the time of the occurrence of this defalcation had given a wrong impression. While calling at the Department of State I was asked by Mr. Seward, if I remember aright, how I reconciled the failure with the representation I had given of the soundness of banks in the Netherlands in a former dispatch. It will appear that it was not the failure of a bank, but the misdemeanor of the members of a commercial association.
The heretofore high character of the parties involved add much to the interest so extensively felt in the matter. The most undoubting confidence had been felt in their reliability and honesty. The disastrous consequences to the many who had made investments of millions of money that followed the sudden development of the want of these qualities gave intensity to the excitement felt throughout the Netherlands, as well as other countries more or less affected.
Mr. Pincoffs had been regarded for years as one of the most enterprising business men of this country. In the city of his residence he had participated actively in almost every important public undertaking connected with its commercial prosperity. He was at an early period of life made a member of the city council of Rotterdam, and placed at once upon its financial committee. He afterwards was elected a member of the state or provincial legislature of South Holland, and when subsequently chosen by the legislature as a member of the House of Lords of Parliament, or, more correctly speaking, a member of the first chamber of the States General, and on that account resigned his position as one of the city board, he was presented with an elegant album signed by seven hundred of his fellow-citizens as a token of their regards and respect. He was an influential member of the first house of Parliament, having [Page 810] in a more than usual degree a popular manner and the power of persuasive eloquence. In 1869 His Majesty the King decorated him with the order of the Netherlands Lion, and in 1874 the King personally presented him with the order of Commander of the Oaken Crown, and about the same time the Emperor of Germany presented him with the order of Commander for his useful services in superintending the interests of German emigrants to the United States on their embarkment from the port of Rotterdam.
Kerdijk was the brother-in-law of Pincoffs, and early had become associated with him in commercial business; and the advocate of Kerdijk, in his plea on his recent trial, represented him as thinking Pincoffs to be the greatest man in the world, and that he was entirely controlled by his influence.
Among other indications of the high regard in which the business qualifications of Pincoffs were held, is the fact that he was enabled to induce the merchants of Rotterdam to form a trading company, with a capital of fifteen millions of florins. One object of this company was to construct large and commodious warehouses on the banks of the River Maas, where it flows through Rotterdam. Unoccupied grounds were selected, and enough has already been erected to give it the appearance of the beginning of another magnificent city. The different sections of buildings have marked upon them the several countries of the world from which cargoes were expected to be stored and reshipped to the interior of this continent. Pincoffs was made president of this company, but on account of the exhaustion of the funds the work does not progress. He was also elected chief superintendent of the Netherlandish East Indian Gas Company. The design of this association was to supply with gas the cities of the islands and the East Indies belonging to the Netherlands. This adventure was not attended by the success anticipated. The most responsible bank of Rotterdam had also availed itself of the reputed financial skill of Pincoffs, by making him a member of the controlling committee of its board of directors. Although it lost some money by giving him too much credit, its financial standing was hot weakened.
There was still another association in which Pincoffs was chief manager, and out of which the grand dénoûement sprung. This was called the “Africanische Handelsvereinigung,” or the African Commercial Association. Its object was to concentrate, as far as practicable, trade with the coast of Africa, with headquarters at Rotterdam. It was a union of capitalists commencing with a fund of two and a half millions of florins. This subsequently, by the influence of the sanguine hopes infused by Pincoffs, was enlarged to four and a half millions of florins. The business operations were placed almost exclusively under the control of Messrs. PineofTs and Kerdijk. They had the direction of ships agents’ purchases, and the planting of stations upon the shore of Africa. They drew the money, bought goods, and guided clerks in the keeping of accounts. The operations, though very extensive, were not remunerative. Pincoffs having great faith in the outcome of the scheme, desired to sustain the hopes of shareholders until they should be realized. To this end he reported to the annual meeting of directors larger receipts than facts warranted. To make a showing of property on hand, he added to the original cost of goods 120 per cent, upon their arrival in Africa; and he ordered his clerks to make the entries upon the books of account so as to correspond with his annual report. The association was organized in 1869. At the annual meeting in May, 1870, a gain of 227,000 and some hundreds of florins was reported. In 1871 again, 278,000 florins; [Page 811] in 1872 near 279,000 florins; in 1873, over 278,000 florins; in 1874,201,000 florins; in 1875, 144,000 florins; in 1876, 221,000 florins; and in 1877, 182,000 florins. These false reports were made at seven annual meetings. But in May, 1879, the development had to come. On the 12th of that month, Pincoffs reported to the board of directors that the losses had been continuous, and so great that the entire capital had been consumed. The excitement consequent was intense and universal. The commercial world hereabouts was shocked. This surpassed anything of the kind Holland had ever known. Pincoffs at once escaped and fled with his family to New York, and still has refuge in the United States; Kerdijk fled in the night to Belgium, and during the first hours of his stay at a hotel in Antwerp attempted suicide by cutting his throat with a razor. He was taken under custody to a hospital; Belgium extradited him, and he has since been in prison in Holland. The Government of the King instructed its minister at Washington to apply to the Government of the United States for the extradition of Pincoffs. This was declined for the want of a treaty.
On the arrival of Pincoffs at New York, he was met by detectives, under direction of the Netherlands minister, for the purpose of ascertaining whether he had brought with him funds to any considerable amount; but none could be found except-what was necessary to meet traveling expenses. It was desired to get hold of something that could be attached, and by some process put the fugitive under restraint.
It has not been discovered that the defaulters converted to their own use any considerable amount of the money that passed through their hands. Their chief error was that they “flattered” the accounts.
As Pincoffs was a member of the first chamber of the Staats General, that body, as soon as the revelations were made and his escape announced, took up his case and summarily expelled him. Then the procureur général or public accuser prepared charges against Pincoffs and Kerdijk for their arraignment before the high court. On account of the privilege of the former as a member of Parliament he could not be tried before the ordinary criminal court, but must be tried before the supreme court of the land, which does not take jurisdiction over criminals of inferior rank. This made it necessary that his accomplice should be tried before the same court.
The defendants were charged with having knowingly falsified entries, in the books of account to the number of fifty-four times, and of converting to their individual use certain balances during the years 1870–1877. The trial came on to be heard upon the 23d February last. The venerable judges, clothed in gowns, ermine, and velvet caps, marched in and took their seats. Pincoffs was called, and declared an absconder. Kerdijk was brought in from prison between two officers, and seated with a guard on each side of him. His case proceeded.
And here I may digress so far as to make a passing note in regard to the admirable and very effective method of the administration of law in the Netherlands. There is perhaps no country in which its requirements are more respected and more generally observed, crime more restrained, and litigation diminished. The courts try the causes. They consist of from five to fourteen judges. The decision of a majority is conclusive, saving the right of appeal. The whole jury system is abolished. It never existed here except for a short period during the French control. There is no inclination among judges, barristers, nor citizens of any degree to return to it. Some of the money expended in other countries upon juries is here employed in placing the best talent and experience upon the bench. The judges are selected from those [Page 812] who have earned the highest position as barristers, are appointed for life, and made entirely independent of political influence. The community appear to have unbounded confidence i them. They cannot be disturbed except for misdemeanor, and the instances are of the rarest of them having been charged with any impropriety. This high court, now in session, is selected in this wise: It consists of fourteen members. When a vacancy occurs, the remaining thirteen select six names from the most learned and suitable barristers of the kingdom. These six names are sent to the second chamber, or to the house of representatives of Parliament, where, after a canvass of merits, a vote is taken, and the three names receiving the higher number of votes are sent to His Majesty the King, who selects one, generally that one who had the highest number, and he is then installed.
To the accused, when arraigned, every fair advantage is given for his defense. He has freedom of speech, through himself or attorney, as he elects, and has the closing plea. If he conceives that for any cause either of the judges entertains prejudices or bias, he objects to his sitting, and if the objection is reasonable, it prevails; and if either of the judges calls to mind circumstances that render his sitting a matter of doubtful propriety, he retires. The court, however, does not act upon the presumption that knowledge of the facts is necessarily followed by loss of impartiality. As all interrogations are propounded by the president judge, he seeks to make himself acquainted with the case, as far as practicable, from the depositions and evidence taken before the magistrate or the lower court. When the evidence and pleadings are concluded, the court takes time for consultation, and renders its decision in writing, from which the defendant has the right of appeal. When it is considered to what an extent this system promotes economy, dispatch of business, certainty of punishment to the guilty, and that it prevents the browbeating and hectoring of witnesses, and appeals to the sympathies and prejudices of a jury, and that it diffuses throughout the masses no hope of miscarriage of justice by the “glorious uncertainty of the law,” it is well worthy the attention of the jurist and statesman.
Kerdijk, the defendant, is a man of large person, of intelligent expression, and has the demeanor and address of a well-to-do merchant. He is not regarded as nearly so culpable as Pincoffs, because he is looked upon as having been only his shadow. On several occasions during the trial he was unable to control his feelings, and completely broke down.
After the submission of the evidence and the closing of the pleadings, the court adjourned for eight days, in order to make up its judgment. On the 6th instant the sitting was resumed. The attorney of Kerdijk informed the court that his client had become so prostrated by the wearing care of the trial that he was unable to be in attendance. Upon the admission of the prosecutor that the physician had certified as to the sickness of the prisoner, the court delivered its judgment. It decided that the defendant, Kerdijk, was acquitted of the charge of falsifying the entries in the books, but that he was guilty of knowing that seven annual reports signed by him were false and misleading, and also of converting to his own use some of the receipts. He was thereupon sentenced to close confinement for two years, to pay a fine of fifty florins for each of the false reports, and to pay all the expenses of the prosecution. If Pincoffs had been upon trial, the penalty to which he would have been liable would be five years’ imprisonment for each false entry, together with a fine for each offense.
[Page 813]It was noticeable that during the trial armed soldiers were stationed at the several doors of the court-room. But this is the custom here. It is merely to show that the court, in whatever it may decide, is sustained by the power of the government, and by being uniformly done excites no attention and lets everybody see that any resistance would be useless. No person imagines his freedom curtailed, for the soldiers are as harmless as lambs until the law is violated.
I have, &c.,