CHANCES SEIZED

Hokitika Guardian, 31 May 1932, Page 2

CHANCES SEIZED

FORTUNES GAINED AND LOST

SOME INSTANCES RECALLED

The tragic end of Ivar Kreuger recalls the rise and fall of other powerful magnates whose existence was due almost entirely to the war and the pronounced economic changes caused by the conflict.

It is generally . believed that Hugo Stinnes was the pioneer in the field of leaping fortunes from the steadily downward trend of a- country's currency by borrowing internally by expanding "proceeds forthwith, and by repaying ai, a somewhat- later date with money ■which in the meantime- has shrunk materially. This process is repeated until the sponsors of such policy achieve all or most of what they originally set out to accomplish.

Althouglit the credit is ordinarily given to Stinnes, the true father of inflation is Camillo Castiglione. It is he from whom Stinnes learned. Cnstigilione hailed from Trieste and was the son of a divine. He was selling automobile tyres before the war. He managed to become a director in an Austrian tyre company. During the Avar, business flourished. He branched out. He participated in the formation of aeroplane manufacturing concerns. Ho received profitable orders atid governmental decorations. He acquired a bank.

TOPPLES TO RUIN

After the war Castiglione became Italian- because of Trieste being ceded to Italy. He was called upon to act as intermediary between Italia,n finance and Austrian industry. He acquired an interest in the Alpine Montan, one . of Europe’s leading iron and steel concerns. He sold his interest to Fiat'at enormous profit. F Nothing succeeds like success. Castiglione soon became the all-powerful uncrowned ruler of Austria. He leaned somewhat to the romantic. He married the winner in. a beauty contest, an actress famed for her looks, even though not for histrionic ability. - He became anxious to profit from a declining'franc. ,He felt that the French currency . was destined to foblow the mark, the krone and the rouble.* He miscalculated this time. His losses in franc speculations were tremendous. Before long it was dm-, covered that the edifice, heihad built had grown too huge. - It had become unwieldy and unmanageable. It began to collapse, and it dragged-down with it its_, founder, Camillo.. Castiglione-—the •son of a Trieste divine, after •he had held sway for a decade. Hugo Stinnes proved an apt pupil o J an; apt teacher. Stinnes was not a novice. He belonged to a family which had distinguished itself in the field of Genian industry and finance. However, he would never have laseli ris spectacularly had it not been for the depreciation o? the mark. For four yours, from 1020 to 1028, Stinnes was the. most talked of and the most thought of man, not-, alone n Germany, but in the whole world. Never before x - lia<;l loaders iq. business. or finance occupied public opinion quite so much. One rarely encountered a newspaper, econotfiic report, cr political address which dicFnot refer to or.mention Germany’s nay; Europe’s, mystery man.

THE STifNNES EMPIRE

Stinnes wasc born years before bis Scandinavian colleague, lvar Krueger. At tbe age of twenty-three lie founded his own business. Curious though it may seem, he, too, studied engineering, specialising in mining engineering;. His company had a capital’ of about £3OOO, held by Hugo Stinnes and his wife. Stinnes took an interest in organising,; in. 1898, the Khine-Westphalia. electric company, one o-:‘ Europe’s leading public utility concerns. Four years later lie

owned a controlling interest. At the end of the conflict the Stinnes fortune Avas greatly impaired. At any rate, lie said so. Speaking before the State Economic Council in November, 1922, lie declared:

“There is no one avlio as result of the AA'ar, especially a Avar Avliich Avas lost, has incurred so much damage, or Avhose enterprises have suffered so much as I and the various enterprises Avith Avliich I have been affiliated.” >

Less than two years later ho owned or controlled or Avas interested in establishments of various types and descriptions, not only in Germany, but throughout the Avorld. Prior to his death his affiliates abroad numbered 572, including forty-eight in LatinAmerica-, seven in the United States and Canada, ten in the South Sea Isles, eight in Asia Minor and (Persia, and six in Africa.

' The collapse of the Stinnes empire Avas caused by the same reasons Avliich Avere responsible for the decline of the Castiglione edifice. The combine had become umvicldy. The stabilisation o! the mark made it impossible to continue to finance various projects at the expense of creditors. Had lie not died at 54, Stinnes might haA*o prevented the complete disintegregration of his fortune. His son Edmond could not take his father’s place. His younger soil, Hugo, Avas anxious to expand even further. The .two brothers constantly disagreed, except in one tiling to maintain ’ the fortune and the power o' the house of Stinnes. Conditions, however, had changed, which the two heirs did not seem to realise.

THE LOWENSTEIN MYSTERY

The end of Alfred Lowenstein, onetime Belgium’s'richest man. avlio had amassed a fortune in artificial silk stocks, Avill probably remain a mystery. He is doubtless the most .snectacular o' the inflation kings. He did not. like bis col'eague in Sweden, slum publicity He was an enthusiastic flyer. He maintained luxurious apartments in three European capitals, and flew from one t° the other, often in the course of a few hours. He would breakfast in Brussels, attend a meeting at noon in London; and dine in Paris, all in one day.

After having acquired an intc-est in the leading artificial silk concerns, Lowenstein turned his . attention to utilities. He was a heavy buyer of American pOAver and light issues. The collapse of the market- in rayon securieies seriously impaired Lp-werstein s position. On one of his flying trips to Paris he is belieA r ecl to have fallen out of the ’plane. Thus came to an end another man avlio for a short period of time Avas liis country’s foremost financier.