Santa Claus morning in 1925 is “a sad, rainy winter morning”, as Alves Reis will remember later. The banker, 29 years old, has just come from the Angola colony, where he did good business and bought a few plantations. Now he is waiting on board the German steamer SS Adolph Woermann to go ashore in Portugal. A police boat is approaching. “I have not committed any crimes,” says Reis when he says goodbye to his wife. But he is tied up from board. The streak of luck for Artur Virgílio Alves dos Reis has come to an end at this moment.
In a few months he had become the richest and most powerful man in Portugal – thanks to the absurd idea of having tons of money printed at the country’s official print shop. He had forged letters and contracts, set up a bank to get all the bills out there, and even tried to buy the central bank. The chief judge of the British Empire later speaks of a crime “for which there is no parallel for its ingenuity and conceptual audacity”.
States need money
At that time, the states of Europe did not know how to finance their debts. Portugal has been hit particularly hard. And as elsewhere, politicians have money printed there. Rice just did the same thing. Only for your own account.
The flood of money shakes confidence in European currencies, the state of Portugal begins to falter. “The scandal weakened the credibility of the republic and ultimately supported the rise of the Salazar regime,” said Henry Wigan of the London School of Economics in an essay. This is also the view of Murray Bloom, who traced the case in the 1960s. “It was – and is – the ultimate crime,” he wrote in the book “The Man Who Stole Portugal”, “the big exception that only occurs once in 100 years.”
Alves Reis was born in simple circumstances in 1896. When Portugal entered World War I in 1916, it was able to move to the Angola colony. Before he sets off, he issues his own diploma number 2148 from the “Polytechnic Engineering School at Oxford University” – which does not exist. Reis has an impressive degree in 20 subjects, from mechanical engineering to geometry and physics to metallurgy. He builds his further career on this lie.
In Angola he works for the government and the railroad, trades in raw materials and scrap tractors in parallel and makes a first fortune with all sorts of tricks. A colonial gentleman with a light suit and pith helmet, that is how he appears. An upstart who likes to show what he has. “He made expensive gifts but didn’t look you in the eye. He was only interested in money and women, ”says the wife of a business partner about him.
Back in Portugal, Reis begins speculating with bad checks, buying into companies – and stealing $ 100,000 from one of the company vaults. “There are no honest people or villains in the materialistic world to which I belong – there are only winners and inferiors,” he says as he is exposed and ends up in prison. “Don’t worry,” he writes to his wife. “That’s life, and we have to put up with it.”
In prison he then gets the idea of his life. Aren’t all of Europe’s highly indebted countries printing money? The Germans hardly keep up with hyperinflation. And neither do the Portuguese. Between 1919 and 1924, the country had inflation rates of just under 50 percent on average. The gold standard has long been abolished, the Bank of Portugal is busy printing Escudo. Why shouldn’t he, Alves Reis, simply continue this policy as a businessman, as an “inflationist” as he later calls himself in court?
He reads everything about the Bank of Portugal: statutes, history, balance sheets, newspaper tears. He draws a complete diagram in his cell and is astonished to find that there is no department that checks the serial numbers. So if he copied the notes perfectly, nobody would notice.