HOW FORTUNES ARE WON.

Otago Witness, Issue 2010, 1 September 1892, Page 40

HOW FORTUNES ARE WON.

Br Murray Aston.

There can be no doubt that it is the lot of few to attain even a moderate competency, the great majority being content to toil on in a spirit of thankfulness if they can but earn sufficient to pay 203 in the pound; while many, especially those blessed with a quiverful of children, are never free from pecuniary anxiety, and could one but read their hearts what a page of- untold misery would be there revealed 1

A few, however, seem born to riches, and a sprinkling have attained the proud position, in the eyes of the world, of being styled millionaires. Such are the Rothschilds, and in the colonies, where a man in the possession of a few thousands even is sure to command a certain amount of respect, a little insight as to how great fortunes have been won may prove of interest.

Some 40 year 3 ago two young Germans, to avoid the conscription, it is stated, took up their quarters in the city of London. A couple of dingy rooms on the second floor of a building in a courb not far from the Stock Exchange, at a rental of L2O per annum, sufficed for their requirements.* A few pounds of capital served to open a banking account. The observance of strict economy, always buyers when prices were down, sellers when buying was the order of the day, resulted in success following their efforts; and one fine day a second-rate European State was in need of funds, for which, they were prepared to pay, in bonds, very liberally. Our firm had some capital and excellent cre3it. The money was forthcoming on the security of, say, 3 per cent, bonds at 20 per ce'nb. or 80 discount on the par value. More cash was wanted, and the brothers financed again. The money market soon became favourable for the issue of a loan for two millions. A great success attended the venture. The loan rose to a premium on the price of issue; the public absorbed the bond 3 as fast as they could be issued. The brothers thereupon bloomed into loan agents to the second-rate European Sfeate, ajd were created nobles. And richly they deserved their honours, for they never lent the name of their firm to any doubtful security, and the public were not' glow to discover their honesty, and any new venture to which their name was attached went , off " like hob cakes," and was sure to command a high premium. But although a loan agency ,is a most remunerative business, the calling of an arbitrageur is in the highest degree lucrative, and the telegraph has rendered it so. Every centre of any importance in Europe has its bourse, or stock exchange, where certain stocks ' are continually being bought and sold. Some of these securities are local and diffculb to negotiate, but certain of them are what is known .as international stocks, and easily bought and sold on all the bourses, being bonds to bearer, such as Government loans and leading American and Continental railway bonds. The arbitrageur, seated in his London office some 20 years or so ago had a grand time of it. He simply coined money. Turkish bonds would be very flat in Paris on the publication of some false telegram. The news would be flashed by wire to tho operator in London, where a large sale would be made, a corresponding repurchase being effected in Paris. Lombardo-Venetian railway shares, on the publication of a good traffic return, might rise in Vienna and at the same time be weak in London; and her.c again scope existed for the cunning arbitrageurs. The brothers in this way at one time made gigantic profits, but their extended engagements necessitated a large staff of clerks, and what more natural than that they should import from their beloved Germany a few cousins and nephews, who were cheap as regards pay and educated in the knowledge of several languages. But these young gentlemen were also endowed with a strong imitative faculty, and after patiently serving their employers and obtaining naturalisation papers, they suddenly stole a march on their beloved relatives and benefactors by becoming members of the London Stock Exchange, and dealing direcb with Paris, Vienna, B6rlin, ( Amsterdam, Rotterdam, New York, Phila- 1 delphia, &c , &c , whereas the brothers, not being members of the stock exchange, had been content to do their business through brokers. And now all tbis was changed, for a great rise in Spanish having taken place in Paris, before the brokers of the great firm could reach the market they had been forestalled, and so the arbitrageur business passed into other and younger hands ; bat not before the originators of the system had made their millions.

The firm of Stern Bros., of London, is a case in poiLt, as the Viscount de Stem passed away a°f cv years since, the proud possessor of a personality' sworn at under f Oft r million

pounds sterling ; and when his brother, the baron, died a little after, he had amassed no less than sixmillion pounds according to the Illustrated London News ; and, what is more "wonderful still, the accumulation of this vast hoard was generally regarded in oity circle 3 as the outcome of perfectly legitimate trading combined with a business record of the highest honour.