Madge's Diaries
Well, some shocking revelations here, as could have been predicted.
Yes, there was a good deal of people-trafficking. That was the very reason for the Chalet School's existence.
Many have commented that Madge seemed to have no qualifications or money with which to set up a school - it was money from Herr Mensch and Herr Marani (sent via Swiss bank accounts) which enabled Madge to get the school up and running.
Herr Mensch was the master-mind. Sir James Talbot paid for his knighthood with money from the Mensch family, which was deposited with the British government. It was essential for there to be a doctor (although Sir James never qualified) to head up the medical side of the operation.
It looks like Dick Bettany forged Sir James Talbot's qualifications. Madge doesn't make this clear, though - but Dick was definitely in on the racket from the very start.
Anyway - once Madge got to the CS the Mensch and Marani families helped to fill the empty spaces in the school with their various offspring.