“The gold boom, and then the land boom. The gold boom is pretty much over, although many old timers are not willing to admit it. The land boom is crazy right now; but it cannot last, in my opinion. The signs all point to another five years—ten at the most—before the bottom falls out.”
“What signs?”
“We changed from a small town to a small city to a rapidly growing city to a city growing faster than the infrastructure and the treasury could support. Early in the boom, the city was beautiful. It became known all over as “Marvelous Melbourne”, and that it was. At its zenith, the gold boom brought incredible progress and very real problems that needed to be solved. Sudden wealth transformed this small port town into a frantic world center in a matter of months. The wharves were constantly jammed with shipping, cargo and migrants disembarking. A huge engineering project was undertaken to make the port more efficient and safer. Society turned upside down. Gold diggers, carpenters, and stevedores literally threw money away. They drank champagne from buckets and sloshed it on the muddy roads. Low-life Irish maids and ladies of the night paraded around in fancy coaches and cabriolets dressed in silks and diamonds.
“When the gold boom started to decline, the miners left for better pickings. The city’s tax base declined slowly at first then very rapidly. The infrastructure with such crucial things as sewage service failed. Sewage now runs in the streets. Can’t drink the water or even wash your clothes in it.
“The city fathers made a serious and bold decision to save the city. The remainder of the treasury was poured into constructing fine and attractive buildings some even twelve stories high: banks, government offices, civic buildings–the Customs House, Post Office, Treasury House, Parliament, and post office buildings. The government’s apparent confidence inspired the building of churches, coffee palaces, and hotels, all built by out-of-work miners. Architects and construction companies prospered beyond anyone’s imagination. Towers, spires, domes, and turrets reached towards the sky. A magnificent huge telescope was built here.
“It became a popular pastime for the citizens to visit Melbourne Observatory at night to observe the planets, moon and stars, through with the Great Melbourne Telescope. Living conditions improved. The tax base improved, but it was a house of cards. Much of the city smelled so bad you could not stand to go there. Instead of being “Marvelous Melbourne” it has gotten to be known by almost everyone here as “Smellbourne”.
“No one seems to see that we are in a land boom now, and that it is a bubble that will burst. My recommendation, Alexandra, is to use your money to buy property throughout Australia and to hold onto it. Property values will climb again after the coming fall. You will use the classical ‘buy low and sell high’ plan if you exercise courage and patience, and you will succeed beyond your wildest imaginations here in Australia.”
Alexandra was sobered by everything she had heard. She knew that she was currently rich enough to weather the Australian economic storm which was beginning to spread throughout the civilized world. She spent that afternoon divesting herself of stocks, bonds, and cash, and changing into gold bullion and precious gems, warehouses full of invaluable Chinese and Japanese silks, and bales and bales of cotton and woolen fabrics. Then came the major occupation of the next three days in Melbourne.
She began buying up good but undervalued property in Sydney, Canberra, and Perth. She retired early, exhausted by her frenzied buying and selling and the stress and anxiety of each decision. She would be either a pauper or a princess by the time all this boom, bust, and boom again played out.
The next day was Melbourne’s turn. It was a nice day; so, she took a landau to Stenka’s house. Together they took a cook’s tour of the city. They started at the Wharf where there was moderate activity, but not as frenetic as she had supposed a working day should have been. Carts, drays, vans, and wagons were being used for carrying goods; but as a sign of the lessening times, they were also being used to carry people–those of the lower orders; but still, the conveyances were better suited for animals. This appeared to be a harbinger of difficult times to come.
In the past, large ships like The Great Britain were unable to navigate the curving and rather narrow and shallow Yarra River. Cargo destined for Melbourne in that era had to be unloaded at Hobsons Bay and transferred by rail or by cargo lighter to warehouses concentrated around King Street, an expensive and inefficient process. During the late seventies, the colonial government determined to find a solution that would make Melbourne an important international port of call.
The solution was bold, even drastic. The marine architect hired by the province decided to change the course of the river by cutting a canal south of the original course of the river which shorted the river’s course and made it considerably more convenient. In 1884–when Alexandra landed in Melbourne–ships were able to sail as far up the river as Queensbridge and to take advantage of a turning basin which was created. In the years leading up to 1880, when Melbourne was “Marvelous Melbourne”, new arrivals—thousands every day–chased a single dream—gold—and cared very little about how the city looked. Alexandra was reminded of the attitude prevailing in Asia when she was involved in active trading. There everything revolved around the three Gs—God, Glory, and Gold. The similarity was disturbing.
Lodging houses and hotels–mostly of flimsy construction and temporary character–were packed to bursting point, many charging by the hour. Makeshift houses of iron, lumber, and canvas sprang up on the city’s edge with strictly pragmatic and utilitarian values—no ascetic concerns. After 1880, the town’s gentry began an effort to make the city presentable and important, beyond its being a center for gold prospectors. Now, Alexandra and Stenka were looking upon urban rot approaching collapse. Stenka was used to the sight, but Alexandra was shocked. The only building that looked like it did in the marvelous era was the first Melbourne International Exhibition building, built in 1880.
“Looks to me like there’s a profit to be made here, Stenka,” she said.
CHAPTER FORTY-NINE
SUCCESS IN MELBOURNE
Nothing can take the place of persistence. Talent will not. Nothing is so common as the unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. Press on has solved and always will solve the problems of the human race.
—George Romney, Give Yourself to Something Great,
Baccalaureate Address, University of Utah, June 5, 1960
Number 8, Chapel Street, Victoria Colony, Melbourne, Australia, November 19, 1889
Melbourne was becoming one of the largest cities—as judged by geographical area—in the world, in no small part due to the efforts of Alexandra Abramovich Tarasova-Yusupov, who—at the youthful age of twenty-eight, and unmarried at that—was becoming one of the grande dames of the city and a notable, even as far away as Sydney. Alexandra had dropped the patronymic from her name and avoided discussion of her Russian background. She and Stenka had poured millions of dollars into real estate over the past five years. Old streets were being repaired and cleaned; old neighborhoods were beginning to see new buildings; these made to last. For the past year, she and Stenka had concentrated their energy in the South Yarra and Prahran neighborhoods to create a post suburb where she could live in luxury and security. Paved streets, sewers, electricity, and police officers were now a regular part of the neighborhood; and other neighborhoods were beginning to follow suit.
Their investments were slowly beginning to reap rewards. Many Australians recognized the need to save Melbourne and decided to invest in businesses, buildings, and to make their homes in previously neglected and decaying parts of the city in order to attract other investors; and, more importantly more solid citizens.
Alexandra’s house—at Number 8, Chapel Street, near Greville Street in Prahran—was a handsome Edwardian mansion; and Stenka’s was located around the corner at Number 10
Grenville Street. Twelve new homes had either been completed or were in various stages of construction in the neighborhood around Alexandra and Stenka. It appeared that the two Russian émigrés had the Midas Touch, and investors studied their purchases—even their scouting movements through the areas of Melbourne that were beginning to rise again—to make their own land buys. This resulted in a self-fulfilling prophecy for Alexandra and Stenka.
So much so, that Alexandra happened on a pair of plans to guarantee their affluence for as far ahead as they could foresee. With Stenka, she started the Greater Melbourne Realty and Land Company to help prospective buyers and sellers to meet, and to grease the skids to hasten closures. She started the Greater Melbourne City Improvement Association patterned after similar organizations in London, New York, and Paris. Her concept was different from the others in that it was a bottom-up rather than a top-down plan.
Her ambitions were not altogether altruistic although many slum conditions were improved and the lot of the impoverished in Melbourne’s poor neighborhoods were improved. Slums were sites of poor land values, and Alexandra and Stenka bought them at pennies on the dollar. The sellers were then free to leave and pursue gold prospecting in the burgeoning gold-mining centers of Ballarat and Bendigo, which was their original desire. The buyers were willing and even eager to buy up land and to make it part of a thriving Melbourne in the making. The Greater Melbourne Realty and Land Company was more than eager to help both sides of all transactions–for a fair realtor’s fee.
By spring of 1889 The Greater Melbourne Realty and Land Company had land and buildings spread out over the central metropolis located on the large natural bay of Port Phillip along with expansions into the arid prairies beyond stretching out to the Dandenong and Macedon mountain ranges, Mornington Peninsula, and Yarra Valley. Stenka had learned an old ditty from British sailors which seemed to describe the capitalistic policy of their enterprise and sang it quietly every time they made a particularly lucrative transaction:
Top of Form
Bottom of Form
My father makes counterfeit money
My mother makes synthetic gin
My sister sells kisses to sailors
And oh how the money rolls in
Chorus
Rolls in, rolls in, oh, how the money rolls in, rolls in
Rolls in, rolls in, oh, how the money rolls in
My brother’s a slum missionary
Out savin’ young lassies from sin
For a shilling, he’ll save you a redhead
And oh, how the money rolls in
Chorus
Grandma’s a boardin’ house keeper
She takes pretty workin’ girls in
She hangs a red light in the window
And oh, how the money rolls in
Chorus
Stenka became ill with tuberculosis in May and was unable to participate in their day-to-day business activities. That meant that Alexandra now had to handle all the major and minor details of getting a tramway started. In the spring, the tram extended only from Swanston Street to Chapel Street; and getting funding for her planned throughway to the wharf area was becoming ever more difficult because the financiers found it difficult to lend large sums to a woman with no man backing her up. Alexandra had to make less than fully fair deals with the patrimony of Melbourne and of Australia as a whole in order to complete funding. Although she felt like she had quartered some of her integrity to get the funding, the tramway was a reality by the end of November.
The Greater Melbourne Realty and Land Company participated in the establishment of a hydraulic facility in 1887 which manufactured elevators; the result of that fundamental local success—was the construction of high-rise buildings comparable to those seen in New York City, London, and Berlin. The company’s most ambitious project—which required obtaining funding from almost every bank in Australia and not a few in America and England—was to improve the railway system to a safe and reliable transportation network that rivaled the one in Switzerland. Plans were made for a grand opening celebration for the Melbourne Tramway system to coincide with the city’s Christmas celebration. Nearly every major thoroughfare within the Melbourne Center area was now interconnected.
Alexandra loved her new home, in part because she had created it herself; and it was neither a Tarasova nor a Yusupov construction. Each time she arrived at that thought, her mind drifted back to what she had lost. Her husband had betrayed her in the most bestial way by stealing away her two children. Neither the man nor the boys had been located in more than eight years of searching. She had lost half of her working capital because Boris had taken his portion of the accounts’ assets when he absconded. He was technically owed that much of the money legally; but ethically, it were an abomination in Alexandra’s mind—another betrayal. The betrayal was made all the worse because—under Russian law—she could not even obtain a divorce after years of legal wrangling. Alexandra resolved never to trust a man again.
She would control her life, and, certainly, her assets so long as she lived. She had managers, accountants, and attorneys, to ensure against another predation. Alexandra had used up so much of her time searching for the boys that Jardine-Matheson severed relations with her. Her parents maintained their good relations with the giant maritime corporation, and their wealth accumulated rapidly over the years since Boris had left. That had led to acrimony between her and Abram and Irina until she decided to make a break with them and to emigrate to Australia. After three years, she no longer corresponded with them. She stopped using her Russian patronymic and also the inclusion of the Tarasova portion of her surname which added an exclamation point of finality to her Russian life.
Before the evening of the tramway celebration, Alexandra visited Stenka, concerned that he would not be around much longer. She loved the old man and genuinely valued his wisdom. He had some studied wisdom to share with her that night.
After an exchange of their usual pleasantries and sharing aperitifs, Stenka became serious and asked for Alexandra’s full attention.
“My tear, I vill tire qvickly, ant I have sometingk to tell you. Ve haf zeen a golt boom ant a crash and lately a lant boom. Both ver expected. Now, you must expect another crash. Land prices haf gone crazy. Ve, ant a few others have mate fortunes. But, my tear, dis cannot last. I predict a crash before the turn off the century. Promise me that you vill get out of lant, buildingks, ant loaning money to speculators. You are rich. You can become poor. Get out or you vill end up like Henry Frenchman and H.H. Walsh up in the Plenty Ranges, Louis John Michel and his friends at Anderson’s Creek, the Brentanis in Collins Street, the Forresters, the gold and silver smiths, the Clinches, and the Hobarts to name a few.”
His voice faltered. He coughed up a little blood.
“Get out off the biznesss now,” was the last thing he could manage.
Stenka died a week later.
The day after the tramway celebration, Alexandra arranged for a Russian Orthodox funeral in the humble little home in Collingwood that served as a chapel. No priest was available, but subdeacon Ivan Ioannis Dionisii came all the way from Sydney to officiate. He was the grandson and namesake of Father Dionissi, the Russian Orthodox chaplain who conducted the first orthodox service in Russia in 1820.
Alexandra spoke as the only friend of Stenka’s after Dionisii completed the formal ceremonies.
“Stenka Mazepa was a Don Cossack, a very brave fighter, a man of courage in all aspects of his life. He served me as a guardian and protector during my girlhood and several times came close to making the supreme sacrifice for me. He was loyal to a fault to my mother and father, and that level of loyalty was the pattern of his life. He was among the faithful Russian Orthodox from his childhood on and should be kept in your memory here in Melbourne as such forever. He and I were business partners at the time of his death, and it is my pleasure to announce that he will leave a sum sufficient to build a real chapel for your community. It is too bad that he could not live lon
g enough to see its completion.”
There were a few white lies in that short eulogy, but Alexandra was certain it would have been to Stenka’s liking. He possessed all those good attributes; he was a lifelong proud Cossack and a warrior; and he was orthodox to his core and to the end. He–of course–never heard of the chapel he was going to bequeath and which would become the Mazepa Orthodox Religious Center in time. Alexandra did not begrudge a kopek of the generous contribution.
What was important to her was Stenka’s last advice, and Alexandra heeded it assiduously. The day after his simple funeral, she began to dismantle her companies, business associations, and to liquidate all her holdings. That process took three full years while the Melbourne economy began to unravel at the seams. The land crash was worse than the preceding gold rush crash. By the end of 1889, the land boom and fully run its course. Alexandra sold as fast as she could, sometimes at bargain prices. The economically embattled city watched falling asset prices, shrinking commodity prices, diminished use of transportation systems with resultant falling prices and profits, severely increased pressure on borrowers resulting in mounting defaults.
The defaults undermined the stability of Melbourne’s and then all of Australia’s lending institutions. Widespread failures were evident early among the land banks and building societies beginning in 1891 and that frightened trading bank depositors. In 1892, the unthinkable happened–the suspension and then liquidation the Mercantile Bank of Australia followed a few months later in 1893 of the Federal Bank of Australia. What destroyed the banks was their interdependent linkage with the building societies—many brought into being by Alexandra and her company.
The “Great Crash” was in full swing.
The population of Australia suffered increasing anxiety about the safety of the other twenty-two banks in the country. Melbourne was hit first and worst. Bank shares carried additional liability, and many of the demands for payment were triggered by suspension heaping misery on top of loss. The fall gained an inexorable momentum as bank shareholders—most Australians–began dumping stock as fast as they could before depositors could begin to look for safer investments. By the late 1880s, the boom had run its full course to the end.
The Mysterious Alexandra Tarasova-Yusupov Page 36