MILLIONS OF BANKNOTES

Auckland Star, Volume LX, Issue 221, 18 September 1929, Page 8

MILLIONS OF BANKNOTES

SPECULATOR'S HOARD. ADVENTURES IN FINANCE. FORTUNES WON AND LOST. In a very ordinary-looking little house in a hy-street off Eden Terrace there lies an immense store of banknotes. There are thousands of pounds in European currency — portmanteaux bursting with Russian roubles, packingcases stuffed with German marks, chests full of Hungarian and. Austrian kroner, trunks packed tight with the bonds of nearly every Government in Europe. Theoretically, there is more money in that 'house 'at No. 8, Ethel Street, than there was in the cave of the Forty Thieves. But its owner does not bother even to lock the door on it. It is all mere coloured paper, less valuable than an equivalent weight of white newsprint. This hoard is the result of a financial speculation undertaken a few years ago by Mr. H. Kirsehcnbaum, who arrived in Auckland by the Tofua a fortnight ago. Jewish by race, Polish by birth, but American by accent, by naturalisation and by force of character, he is a born gambler. His exchanging of a fortune in good U.S. gold for paper money which he hoped would regain its value, was only one of many such exploits whereby he lost and won and lost again great sums of money. "Seeing that this war business is only a question of money, I decided to get some for myself," says Mr. Kirschenbaum, in his expressive Polish-Jewish-American-English. His first gamble in currency was the buying of English money, which in 1918.fe1l very low. He bou-ht £1000, -paying only 2 dollars 00 cents for a £1. When tho English money returned to its normal value, he cleared a big profit. German Finance. Later, Mr. Kirsehcnbaum left America to go fishing in the troubled waters of post-war Europe. In Hamburs, he invested his capital in a department store, which, run on American linos, was soon doing a roaring trade. Then the mark began to fall in value. "It fell so fast," says Mr. Kirsciienbaum, "that what I got for a suit one day, would not buy a vest the next day." He would have closed down, .but the Government passed an order that shopkeepers must sell as long as they had goods in the shops. By the time he had sold out, he had a shopful of paper marks, which were worth very little in Germany, and nothing at all elsewhere. "I did not know then," he laments, "that the American banks had sent four hundred million dollars to Germany to buy marks, which were afterwards sold to the people. But that is how the German can now build their great ships and Zeppelins." Real money was what Mr. Kirsciienbaum wanted, so he advertised that he would give 200 paper marks for a silver mark. For three days he did a brisk trade, and accumulated 001b of silver, which he intended to ship to England and melt down. On the fourth day, threo Government agents waited on him.' Who gave you authority to corner all the silver in the country?" they demanded. Before he could framo a defence, they confiscated his silver and ordered him out of the town. At a loose end, Mr. Kirsehcnbaum wandered all over Europe, speculating a little here and there, but without making any great profit. He visited Russia, and collected a suitcase full of roubles; he toured Hungary, Austria and the Balkan States, and there accumulated more pretty paper; he returned to 'his native country Poland,'and added to his pile of unprofitable luggage. In Germany again, he was caught in the famine of 1923, when the Government issued ration tickets. Being a foreigner, he could not get a ticket, and nearly starved to death. For threo months ho never tasted bread. Defeated, but not dismayed, Mr. Kirshchenbaum returned to Pensacola, Florida, but even here he could not resist speculating. Such leal money as he had he invested in property. The Flordia land hoom burst a month later, and the value of real estate dropped until fifteen cents would 'buy what had cost a dollar the previous week.

The Last Straw.

That disgusted Mr. Kirschenbaum. He packed up and emigrated to New Zealand in search of legitimate business opportunities. With him came his paper fortune, stowed away in the ship's hold as cargo. He knows the amounts of the various currencies by heart: 100,000 Czar roubles; 150,000 roubles in Government bonds of the 1917 issue; WOOO 20-kroner Hungarian notes; l,ooO,Uuu Austrian kroner; 2,000,000 German marks in pre-war notes; 100,000,000 marks in Government bonds issued in 1923; some pre-war German bonds; and countless packages of the debased German money issued after the war. Marks and kroner should he worth 1/ each, and roubles 2/. Niggardliness is not one ot Mr. Kirschenbaum's vices. He gives away 100,000-mark notes as souvenirs, and be<rs the recipient to look after them. When European finances were readjusted, he says, the pre-war issues of paper money will have to be redeemed. When he returned to America from Europe, he had ten million marks in pre-war German bonds, but, deeming them worthless, he gave them nearly all away. Now the German Government is payincr 15 per cent of their value, so Mr. Kirschenbaum's generosity has cost him more than he expected. "There are two and a half million people in Germany, ■as well as the financial powers of other countries, demanding that the pre-war money should be redeemed, and it will have to he done, in part at least, is Mr. Kirschenbaum's belief. Whether such will he the case or not, Mr. Kirschenbaum has given to the Auckland Museum, samples of the paper currency of all the Continental countries. The 10,000-mark note issued by the German Government in 1922, is very interesting. At one end, there is a picture of a man's head, representing Germany, bait looked at sideways, the head of an animal appears. Its fangs are m the man's neck, and it is meant to show Prance sucking 'the Wood of Germany. The whole effect is obtained by clever engraving and shading. Although 'they are worthless,- Mr. Kirschenbaum considers that in many respects, the better issues of Continental paper money are superior to our own, and the new U.S. currency is far better. He is a strong advocate of smaller banknotes and a standard size. By making all the banknotes the same size, and smaller, the U.S. Government has, he says, saved 20 million dollars on their latest issue. New Zealand, he considers, would save thousands of pounds by following the same system. Mr. Kirschenbaum intends to set up m business in Auckland. "But not in Queen Street," he says. His choice for a business site is in Pousonby Road.