Lauderback accuses Shepard of diverting estate funds to build a prison

Lauderback accuses Shepard of diverting estate funds to build a prison in a letter drafted on 18 February 1866 for the West Coast Times. He alleges that money taken after Crosbie Wells’s death was secretly put toward the Hokitika gaol-house at Seaview, without approval from the relevant public bodies or the supposed investor. The letter transforms the uncertain fate of Wells’s fortune into a dispute over public accountability—and makes the proposed prison itself the reason the source of its money must be examined.

Background: A fortune without a clear destination

The accusation draws force from the scale and tangled custody of the gold. Years before his death, Wells had struck gold at Dunstan and concealed a fortune. After his death, the gold discovered in his cottage was valued at a little over four thousand pounds. Harald Nilssen received a ten-percent commission for clearing the dwelling and handling its effects; death taxes, fees, and incidentals reduced the balance, which was held in escrow at the Reserve Bank while Lydia Wells appealed against Edgar Clinch’s purchase of the property.

That cottage fortune was only one strand in a larger confusion over gold. A separate trunk contained approximately four thousand pounds sewn into five dresses by Lydia Wells, who was then posing as Francis Carver’s wife. Carver had cheated Lauderback out of the Godspeed and later lost the shipping crate containing the trunk. The gold in Wells’s cottage and the gold in the missing crate therefore belong to overlapping but distinct trails: together they show why a fortune’s location, ownership, and route into public hands could not be taken for granted. Lauderback’s letter focuses on the allegation that Wells’s estate gold, rather than the missing dresses, financed the gaol’s preliminary construction.

From confidence to public accusation

The immediate political turn follows a breach of confidence. Thomas Balfour had promised to keep Nilssen’s confidence, as he had on behalf of the men involved in the Crown Hotel council, but he disclosed what he knew to Lauderback. After parting from Lauderback at the Golden Lion, Balfour rode toward Hokitika in evident discomfort, conscious that he had broken his word and uncertain what he had gained by doing so. His disclosure supplies Lauderback with the grounds for a public challenge, while making the information itself part of the story’s chain of secrecy and betrayal.

Lauderback does not confront Shepard privately in this episode. He chooses the newspaper, turning a reported financial arrangement into a demand addressed to readers and officials alike. His letter asks Shepard to publish the names of those appointed to construct the gaol-house on the Seaview terrace, identify the contracted works, disclose the sums voted and advanced, and account for any additional amounts required to finish or improve the project. The inventory matters: Lauderback asks not merely for a denial, but for a record detailed enough to expose how public work was authorized and paid for.

The charge against Shepard

Lauderback characterizes the alleged financing as a grave breach of conduct. He claims that construction began with a private donation made without the consent of the Provincial Council, the Westland Public Works Committee, or the Municipal Board. More strikingly, he contends that the supposed investor, Wells, had himself been dead for about two weeks when the investment was made. In Lauderback’s account, the money was extracted posthumously from Wells’s home and apportioned to the future gaol without public knowledge.

The letter presents these claims as an understanding that Shepard must clarify, not as a verdict already established in court or by an official inquiry. Lauderback explicitly allows that his understanding may be false and says he will stand corrected if it is. That qualification gives the challenge a procedural form: Shepard is invited to answer, but the requested disclosures make silence or an unsupported denial potentially damaging. Lauderback also insists that scrutiny is especially necessary because the institution under construction is a gaol and the alleged source of its funds is a dead man’s estate.

Publication as political leverage

Lauderback’s appeal to transparency gives his accusation a wider frame. He argues that financial openness is essential in a province rich in gold and vulnerable to corruption, and presents disclosure as a matter of public benefit and respect for colonial law. He also professes regard for Shepard’s intentions, describing the prison project as ostensibly directed toward the common settler’s interests. The contrast sharpens the charge: good intentions, he implies, cannot excuse an unaccountable source of money.

After composing the letter, Lauderback reads it aloud as though rehearsing a public address, then folds it and places it in an envelope for the editor of the West Coast Times. He marks it urgent and instructs that it be read upon receipt. It is nearly two o’clock, and he calculates that if Augustus Smith rides directly to Hokitika, the letter may reach Benjamin Löwenthal before Monday’s edition goes to proof. The episode ends not with Shepard’s answer but with Lauderback setting publication in motion. Its unresolved charge hangs over the estate, the prison project, and the public record: the money may be accounted for, but only if the people who control that record are made to explain it.