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When George Told the Millionaire ‘No’

When I was studying to be a minister of the Gospel, my student churches were two adjacent wooden churches in the inner slum areas of Melbourne. For seven years during the 1950’s and 1960’s the people of those inner slum areas were my parish.

Towards the end of my time in College in the late 1950’s Australia was going through a period of tremendous growth and expansion. It was called the great Menzies boom era. There was a great deal of land speculation and people wanting to make money were keen on buying blocks of land in the outer suburbs, keeping them for a year, then selling them again for often double the price they had paid for them. Land speculation was rife, interest rates on borrowings had reached an all time high and share prices were rising at a fantastic rate. Paper profits were being made everywhere by people who quickly bought into companies to take advantage of high promised returns.

The most popular kind of investment around Melbourne in those late days of the 1950’s lay in vending machines. The prospectus said that these fully automatic machines would soon be stationed in every corner of every shopping centre, in the bus and tram shelters and at the railway stations. We would soon have an economy where everybody could buy anything they wanted just by putting two shilling pieces into machines which would automatically deliver a newspaper, a cup of hot chocolate, a bottle of Coca Cola, a block of chocolate or a packet of cigarettes. Twenty percent return on your money per annum was being promised by all the vending machine companies.

Goods flooded into the country. The rage was American cars with fancy tail fins or powerful motor bikes from Japan.

After the austerity of World War II the country was now on a mad buying spree. Every store now offered credit to people to buy their goods. The older people warned us of another depression and told us not to buy on credit. We had been brought up to think that you should not buy anything you did not have cash for and if it was essential then you put a deposit on it and placed it on lay by, but you certainly did not buy anything if you did not have the money for it with the exception, perhaps, of your one big investment of a house.

But that was old fashioned advice. Now the thing to do was to buy everything on credit. Smart people obtained credit from their banks and people who could not get it from their banks could receive it from other lending institutions or from stores.

But the famous boom time of Robert Gordon Menzies when Australia rode high on the sheep’s back following the successful sales of wool during the Korean War, was now to be followed by the 1960 credit squeeze. It was brought about by the mini budget of Harold Holt but always remembered as the Menzies Credit Squeeze.

The mini budget brought with it a very savage realization that if you had purchased goods without adequate money to pay for them then you were in trouble. Sales tax on cars doubled overnight. Companies could no longer claim as tax deductions the interest they had to pay on money borrowed for speculation. Builders went broke. Land speculators became bankrupt. New buildings stopped half finished. Within two months the boom had turned to bust. Large numbers of Australian were unemployed.

Some Australian companies which had been the darlings of the investors were now facing huge losses and there was doubt that they would survive. The vending machine companies crashed one after the other. Reid Murray, a group of companies mainly in electrical appliances around Australia, went into liquidation.

And so did the short fat man who came to see my mother in 1959.

Before the crash the boom was at its height. I was in my last year at theological college studying to be a minister. My mother had rung me one day at college, a very unusual event. She asked me if I could come home that night and meet a man who was coming to see her. I was surprised that my mother should be meeting with any man, for she had been a widow ever since I was eight years of age.

My mother asked me to come home to listen to a business proposition he was going to put to her.

I left college immediately after my last lecture and headed my big black BSA 500 motor bike back towards Box Hill.

My Mum wanted to talk to me with great seriousness: “You know I have battled ever since your father died to keep the business going, but I have decided I will sell it. Ever since Robbie died and you decided to go into the ministry, I have realized there is no point in battling on to keep the cake shop and the bakery going. I have got a man coming to buy the business and the property from me tonight and I thought you should be here.”

My mother had taken my decision to go into the ministry very hard. She could not understand why I should throw my life away when she had planned it that I should be a business man. She had kept our central property in the heart of Box Hill, against all the odds and in spite of all the difficulties, year after year with the hope that I would take it over and run the family bakery business.

My decision to go into the ministry was a mystery to her as our family had no close connection with the church at all. But she thought she would let me try the college for a year or two, and that maybe I would get it out of my system and drop out, being drawn back to the more exciting world of business.

She wanted me there that night for the historic decision of selling the property and the business to bring home to me the serious realization of what my decision to go into the ministry really meant. It had meant the end of an era of bakers that had run through my great grandparents, my grandparents and my father. It meant the end of our holding one of the key properties in the whole Box Hill shopping centre where I had grown up. She wanted me to realize what the decision was costing her, that I should go into college and not continue the business that she and her husband before her had worked so hard to provide for their children.

I felt very bad that night about the pain she was enduring about selling the business and property that she had worked so hard as a widow bringing up four small children to preserve.

The doorbell rang and she went to answer it. I stood behind her in the passageway. Outside the door in the light of the porch light was a short, fat man with clipped moustache and a heavy Polish accent. He had a big bunch of beautiful flowers that he had bought for my mother and in his other hand a very elegant clear cellophane bag in which there was an orchid corsage. In the background I could see the lights of his car outside our front gate. It looked like a big black Mercedes.

He introduced himself: “My name is Stanley Korman, Chairman of Stanhill Pty Ltd. May I come in, and may we, Madam, have a wonderful night of finalizing business together?” He smiled at my mother in a very greasy fashion as he gave her the flowers. I expected him to take her hand and kiss it.

My mother let him into our front lounge room. It was not a pretentious room. We had two club lounge chairs and a couch in maroon tonings, and against one wall the fireplace with a Kelso slow combustion heater which used to burn coke. It had twelve little mica windows through which the red flames could be seen burning on this cold winter night. Some of the mica windows were black from the smoke.

Mr. Stanley Korman launched into a spiel about how he had come to this country with nothing and had built himself up to be one of the richest men in Australia. He claimed to be the largest textile manufacturer in Australia. He indicated that tens of thousands of Australians had invested millions of dollars into his properties. He owned the Chevron Hotel in St. Kilda Road, and was building a big new Chevron Hotel in Kings Cross. He had just bought Factors Limited and was the owner of Rockmans Stores.

“All the people in Australia trust me. They have given me their money and I have given them back fortunes. Ordinary people have invested with me. I have made them a fortune”, he said.

He was forceful, energetic and exciting. My mother had told me earlier in the night that our bank manager of the Commercial Banking Co. of Sydney, Mr. Monteith, had said that Mr. Stanley Korman surely was one of Australia’s best known business men but that she should think carefully before she decided to sell such a prime piece of property.

Stanley Korman smiled. He had several gold teeth. “I vant to buy your property. I will give you a good price. I really want to make it the key to the whole renewal of Box Hill. I have a plan to rebuild the entire shopping centre of Box Hill. It will become the largest shopping complex in Australia and the key to it is your property. It is a very nice property, right in the heart of the entire block, and if I can have your property it will become the headquarters of Rockmans Box Hill.”

“We will build a beautiful building and sell the finest garments.”

Mr. Stanley Korman looked at me. “Have you ever worked in a store, George?” he said. He had been calling me George all night but neither my mother nor I corrected him. “You ever work in a store, George?” I replied that as a matter of fact I had. I had worked for Cox Bros and had worked in the manchester department.

“Vonderful, vonderful, George.” Mr. Stanley Korman was beaming. He looked at my mother, “This young man, George, would make a good store manager. I would be happy for him to be a manager in one of my stores. I will pay you 100,000 pounds now, but I suggest to you that instead of you having it in cash I will double that amount for you in just four years. You can leave it in Rockmans Box Hill and I will pay you 25% per year interest. You will soon double your money and you, young George, you can work for me in one of the stores. You can be a trainee manager first and then I am sure one day, George, you will come to Box Hill as manager of the Box Hill store.”

I looked at my mother. She was smiling ecstatically, the big bunch of flowers in their cellophane on the couch beside her and the orchid corsage in its cellophane packet on the arm of the chair. She had never believed that she would get such a good offer for her property. Not only was there the promise of a large amount of money but the promise of a job for her son, too. Mr. Korman’s generosity and benevolence was almost too much.

My mother looked across at me and said, “I must ask my son for his advice. What do you say, son?”

I do not know whether it was a sense of business acumen or whether it was just that I did not like the oily Mr. Korman, but I looked at my mother and said simply, “George says ‘No’, mother.”

Mr. Korman immediately burst out into a long line of forceful arguments. “Rockmans will be a great store here in Box Hill. Box Hill needs a good store like this. You could not get a better price from anybody else. Box Hill has a great future, and you can have a great future with me.”

My mother had always been a woman of very good business sense and suddenly the thought of George saying ‘No’ pulled her up in her headlong flight into agreement. I could see immediately in her eyes that she had changed her mind and set her heart resolutely. “No, Mr. Korman, I will not sell my property.”

Mr. Korman persisted, “If it is only a matter of 10,000 pounds my dear lady, I am quite sure I would be able to find an additional 10,000 pounds for you.” My mother looked at him. “No, Mr. Korman, it is not the money at all. My husband and I worked hard all through the Depression and World War II to gain that property and we want it for our children. I am sorry that you should have come here tonight, but I do not intend to sell.”

Stanley Korman tried to persuade my mother with many arguments but she was a resolute woman and would not budge. He went out of that home hardly stopping to say ‘Goodbye’ and certainly he did not call me George again.

It was just after this that Mr. Menzies imposed the credit squeeze. The paper fortunes fluttered down to the floor of the stock market. The company of cards collapsed. Stanley Korman had been making and spending money but tens of thousands of investors in his companies never got any. The credit squeeze came hard and the companies of Stanley Korman fell in a heap. It took years for the Victorian Government to fully investigate all of the intricate dealings between one company and the other. But in the end the report came to the State Government charging the small, fat man with the clipped moustache with mismanagement, dishonesty and lying. Stanley Korman was convicted and sentenced to gaol in Pentridge.

If Mr. Menzies had not called the credit squeeze then he probably would have gotten away with his business dealings another year or two and by that time a grateful Australian public would have knighted him as one of the great business brains of our country.

One year after the credit squeeze Robert Gordon Menzies called an election which was the closest cliff hanger ever. It took nearly a week to decide that his government had been re elected with a narrow majority of just one seat, Mr. Jim Killen in Queensland, and that being won ironically on the preferences of a communist.

Stanley Korman served his time in gaol working largely in the prison library. I read the papers with great interest when he was released and then fled the country to America. Over the years I saw a few references to him being a large and significant property developer in Arizona. He died in Las Vegas in July 1988 and his body was flown home for a quiet burial in the Melbourne cemetery. There was hardly anyone present and no one was weeping. The man had been described as a genius and a fraud. He did not seem to be able to recognise right from wrong, nor to know the limits of his personal use of other people’s money. He was laid to rest in an unpretentious grave.

My mother never regretted making that decision to keep her property. Years later she was to sell it but at the right time and for the right price. And as for me, I went back to the College of The Bible and to my student ministries at Ascot Vale and Newmarket. Out there among the slums there were many people who had placed their small life savings into companies run by the small man with the clipped moustache. Many of those people who had very little lost all in the companies that disappeared during the credit squeeze of 1960.

But as for the rest of the people – investments, stocks and shares, interest rates – these were the terms that were totally irrelevant to the daily struggle to survive amid unemployment and low incomes. The people who came to my churches in Ascot Vale and Newmarket were the poor and the unemployed and those who had the most menial jobs at the abattoirs, the racecourse and the sale yards. They were the people of my parish.

These were the people I would think about each Sunday night as I walked into the heavy air blowing from the abattoirs and start my motor bike to head back to the College of The Bible to continue to train for the ministry thinking about my meeting with some of God’s children in the slums of Newmarket.


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