The Carnegie Heiress Fraud

The case

In late November 1904 a Massachusetts banker named Herbert Newton went to court in Cleveland to recover a loan of about $190,000. His debtor was Cassie Chadwick, wife of a respected physician, mistress of a house on Euclid Avenue, then known as Millionaires' Row, and, by persistent and carefully placed rumour, the illegitimate daughter of Andrew Carnegie. Within weeks the rumour had collapsed, a small-town national bank had shut its doors, and the press had discovered that Mrs Chadwick had a criminal record stretching back a quarter of a century under a string of other names.

She was born Elizabeth Bigley in 1857 in what was then Canada West, one of eight children of a railway worker. Her career in forgery began in her teens. In 1879 she was tried at Woodstock, Ontario, for passing forged notes, and was acquitted after her lawyers argued she was insane. She moved to Cleveland, where she told fortunes as Madame Lydia DeVere, and in 1882 married a doctor, Wallace Springsteen, who threw her out within days when creditors appeared at his door. Around 1889 she was convicted in Toledo of forgery and sent to the Ohio Penitentiary; she was paroled in 1893.

Back in Cleveland, now calling herself Mrs Cassie Hoover, she met Dr Leroy Chadwick, a widower of good family, and married him in 1897. The Carnegie story seems to have been launched soon afterwards. According to the most common account, on a trip to New York she had an acquaintance of her husband, a lawyer, drive her to Carnegie's Fifth Avenue mansion and wait outside. She went in, apparently spoke only to the housekeeper, and came out with a story and a document: a promissory note bearing Carnegie's name. Swearing him to secrecy, she confided that she was the steel magnate's natural daughter, that he had given her notes worth millions out of guilt, and that she stood to inherit a fortune. The secret, as she intended, did not stay secret.

The idea's strength was that it could not easily be checked. No banker wanted to ask the richest man in America whether he had a hidden child, and the notes appeared to promise repayment in full. For several years Chadwick borrowed from banks and private lenders in Ohio and beyond, often at high interest, offering forged or worthless securities as backing. She spent lavishly on jewellery, clothes, furniture and gifts, and became a figure of fascination, if not acceptance, on Euclid Avenue.

The heaviest exposure was at the Citizens' National Bank of Oberlin, whose president, Charles Beckwith, and cashier, A. B. Spear, had advanced her large sums, some of them by certifying her cheques when she had no funds to cover them. When Newton called in his loan and other creditors followed, the bank could not survive the run, and it closed. Carnegie said through his representatives that he did not know her and had signed no such notes. Chadwick was arrested in New York in December 1904 and brought back to Cleveland. Her husband had left for Europe.

Federal prosecutors charged her with conspiring with the Oberlin bank officers to violate the national banking laws. Her trial in the United States District Court at Cleveland opened on 6 March 1905, drew crowds and reporters from across the country, and ended with her conviction on seven counts. On 27 March Judge Robert W. Tayler sentenced her to ten years in the Ohio Penitentiary. Beckwith died before he could be tried; Spear pleaded guilty and received seven years.

Her appeal failed in November 1905, and she entered the penitentiary at Columbus at the start of 1906. Her health declined quickly. She died in the prison on 10 October 1907, her fiftieth birthday, and was buried in Woodstock, Ontario, the town where her first forgery trial had been held.