Secret Service report on Henry Middleton, New Orleans, 9 August 1910

OFFICE OF UNITED STATES ATORNEY,
Eastern District of Louisiana,.
Customs-House Building,
New Orleans, La.,
August 9, 1910.

To: The Attorney General, Washington, D.C.
Sir:.- Upon the arrest by Secret Service Agent, Patrick H. Looby of H. L. MIDDLETON, alias Rev. J.L. Hatton for violation of Secs. 158-159-160 Criminal Code, an examination was had yesterday before the United States Commisioner which developed that there were printed by the National Bank Note Company of Philadelphia, five thousand bills of the denomination of five pesos, bearing the name: "Banco de Jalisco"., of which I enclose herewith one for your inspection, which has been marked for identification by Secret Service Agent, Looby, as follows: "L-8-8-1910", and which I will ask you to return after it has served its purpose.
These bills were forwarded by the National Bank Note Company of Philadelphia to the Bank of Jalisco, care of Thomas Marshal, New Orleans by the Southern Express Company.
The story of the accused is that prior to the arrival of these notes, Thomas Marshal met him in New Orleans and told him that these notes would arrive soon, and as he, Marshall, was in a hurry to leave for Mexico, he would give him, the accused, authority to receive them from the Express Company, and thereafter take them by steamer, via Vera Cruz, to Guadalajara for delivery to the Bank of Jalisco.
The accused further says, that he told Marshall that he was in need of funds, and that Marshall told him he might use $250.00 in gold of these notes for himself, and when Marshall's attention was called to the fact that the notes had not been signed, Marshall signed one of them and delivered it to him, the accused, with authority for the accused to sign the others that he needed up to the amount of $250.00 in gold.
The accused presented his authority from Marshall to the Southern Express Company, and the express company delivered the tin box containing the bank notes to the accused, upon the presentation of this authority, and of an invoice from the National Bank Note Company and of a key which unlocked the tin box. After getting the notes, the accused proceeded to sign the names of three different people to the notes, one over the words "Interventor del Gobierno", one over the word "Consejero" and one over the word "Gerente". When testifying, before the Commissioner, the accused was unable to give the names of the three persons, which he had signed on the notes, saying that he duplicated as near as possible those that had been signed to the one note by Marshall. After he had signed a number of these notes in this way, the accused then sold a number of them to banks and brokers in New Orleans.
He was then approached by Secret Service Agent, Looby who made an affidavit against him for violation of Secs 158-159-160 of the Criminal Code. Upon his arrest he admitted to the Secret Service agent here and to the United States Marshal, Victor Loisel, that he had signed the different names upon the notes and had sold them to the different banks and brokers in New Orleans, in order to raise money of which he was in need, and in order to give himself a "chance to work", he had erased the words at the bottom of the note - "National Bank Note Co. Phila".
The accused claims to be, and is, I believe an organist in a church here; he claims to have spent three of four months in Guadalajara a year or so ago, where he was a teacher and organist and where he knew Marshall and had heard him spoken of as the Vice President of the Bank of Jalisco, the office, which Marshall told him (Middleton) here in New Orleans, he filled, when he authorized him to sign the several names to the bank notes.
Middleton appears to be an intelligent man, says he is twenty-seven years old. He claims to be entirely in good faith, in signing the notes, as he said he thought Marshall's authority therefor was sufficient, although he seems now to think that Marshall has duped him.
Upon the evidence at our disposal, I cannot say positively what is the truth of this case, though it seems impossible to believe that a man of reasonable intelligence, should think that Marshall's authority was sufficient to entitle him to sign the names of different persons to these bank notes, one of whom appears, from the title over which the name was signed, to be a representative of the Government.
Whether the names actually signed to these notes are the names of real persons, or only ficticious names, we cannot tell.
The attorney of the accused in talking to me intimated that possibly Marshall ordered these notes of the National Bank Note Company without the authority from the Bank of Jalisco for the purpose of himself falsifying and fraudulently forging and uttering them, but the Chief of the Secret service Division, who has made and investigation in Philadelphia, at the suggestion of agent Looby here, wired agent Looby that the National Bank Note company stated that they received this order for the notes from Middleton in New Orleans, who claimed to be a representative of the bank and who gave written authority of the Mexican officials for the printing of these notes, and instructed the National Bank Note Company, when shipping them, to ship to Thomas Marshall, New Orleans.
The Chief of the Division of Secret Service suggested that the authority of the Mexican officials for printing this issue of notes was fictitious. At this time, I don't know what evidence he has on the subject.
The question that puzzles me is how the bank notes were paid for; who paid for the printing of these notes. The invoice called for $1,025.00 which the Chief of Secret Service, in his telegram, intimates was paid here in New Orleans upon the delivery of the notes, yet Middleton does not look as if he had $1,025.00.
This is an important matter and deserves serious and careful investigation, and should be investigated in ' Philadelphia and in Guadalajara, Mexico, in a secret manner.
I had thought of writing direct to the Bank of Jalisco, but concluded this would not be safe, although I think the Bank of Jalisco would be glad to aid in the investigation, as they probably do not know of the printing of this issue of notes. Marshall is said by Middleton to have left some days ago for Guadalajara.
Respectfully. Charlton R. Beattie, United States Attorney.