Thus, after the funeral, my world was overturned by the labyrinth of legal proceedings, a storm that, mercifully, lasted but a week. The simplest of these tasks was securing the death certificate. Inheritance posed no significant challenges, for my father had left no will. We entrusted the Austrian civil code to allocate the estate, sparing our family the toil of deliberation. Yet amidst this bureaucracy, Gustav's determination bore fruit: he persuaded our mother to apply for survivor benefits, an endeavor as tedious as it was uncertain.
This effort promised modest but significant relief: a reduction in taxes for the following two years. More importantly, it secured a considerable fund for Gustav and me to attend any university within the Austro-Hungarian Empire when the time came.
At this time, I was on the cusp of completing my primary education, years ahead of schedule. Gustav, by contrast, had already entered the world of speculation, trading stocks legally as an adult. This was, however, merely a continuation of his earlier and less lawful ventures.
Between 1896 and 1904, Gustav operated within a clear area of illegality, exploiting the physical nature of stock trading at the time. Transactions were conducted in person, and Gustav claimed to trade on behalf of his "father"—in truth, the British businessman with whom he had arranged a covert agreement.
This arrangement, while ingenious, was inherently restrictive. Gustav could not assume financial liabilities, as any leverage required proof of identity or collateral, both beyond his reach. Furthermore, the lack of formalized options trading at the time added to his limitations.
Today, such methods have been rendered obsolete by the rise of electronic trading. The physical stock market is rapidly fading as these revolutionary machines—some even compact enough to fit on desks!—takes its place.
When Gustav and I received the educational fund, we resolved to divide it equally. However, this plan faced immediate complications. The government mandated that the entire sum be spent solely on education, with checks requiring official approval so as to ensure compliance and prevent misuse.
I must confess that I was initially unaware of the ingenuity behind Gustav's scheme until he explained it to me in detail. For those harboring any notions of replicating such a strategy today, let me caution you: in the modern era, such maneuvers would be swiftly condemned as tax evasion and punished accordingly. Considered general avoidance.
The crux of Gustav's plan lay in exploiting the system of "Accredited Institutions." Before modern accreditation standards, universities could gain legal recognition despite lacking academic merit. For a substantial fee, they provided not only a degree but an entire fabricated academic record, including grades and courses—a complete university education in appearance but devoid of substance.
Through a connection, Gustav partnered with one such institution. He wrote a check for the entire educational fund to the college, which in turn returned ninety-five percent of the amount to him in cash, granting him complete freedom over its use.
I must admit, I harbored grave doubts about Gustav's plan. What if the institution simply kept the money? While his actions, though not illegal, skirted the boundaries of propriety, they risked attracting unwanted attention from the authorities.
Yet, when Gustav presented the full sum a month later, my doubts gave way to pride. This was his moment—his chance to fulfill the dream of making his mark, whether in London or America.
For years, Gustav had nurtured this ambition, even as our parents initially opposed it. Only by demonstrating the substantial Krone he had already (illegally) accumulated did he secure their reluctant approval.
The government funds, combined with Gustav's savings and liquidated stock holdings, were just enough to finance his journey to play the markets in either London or America. This resolved a major obstacle in his path.
Although Gustav's English was impeccable, the Austro-Hungarian Krone was pathetically weak compared to either the British pound or the American dollar—25 Krone to the pound, if memory serves. At last, with these funds, he could finally begin his contest with or against the invisible hand.
Chapter seven: In the House of my mother III --- 1904/1906
For years, Gustav had spoken of his intentions, but now his time had come.
He chose to leave for London, a decision met with approval from both mother and me. The reason, as he expounded, was simple: the gold trade. London, the very heart of this industry, held the world's largest trading market for this precious metal.
There, in London, he could exploit enormous leverage through less-than-legal means, risking everything for what could be astronomical returns—five, even twenty times the investment. The wealthy and ambitious were always flooding the market, ever seeking ways to make ill-gotten gains. It was not quite the stock market, but the difference was nothing but academic.
The volatility of gold prices created minute fluctuations, but enough to make a fortune. Banks and speculators alike viewed it as an ideal asset—collateral for loans, a vehicle for investment—even if doing so meant breaking the rules of speculation.
Gustav would exploit this loophole to its fullest. By opening positions using illegal leverage, he manipulated the system, using his paper positions to accrue even more legal debt, perpetuating the cycle of fraud.
A mere change in attire, a fine suit, and some clever deception—this was all that was needed to persuade the banks that he was a worthy investment. After all, in a mere season, he had already amassed over a thousand pounds from essentially nothing. What might he achieve with more?
Once the banks had been fooled, Gustav purchased whatever stocks he could, confident that the year would end in a bull run. His belief was vindicated, and he was rewarded with a staggering sum of four thousand three hundred pounds after settling debts, cuts, and taxes. Enough to buy a small manor in his very first year! Ill-gotten, perhaps, but he had won.
When Gustav wrote to us, detailing his earnings from that first year, my initial reaction was pride. But soon, fear set in. Such immense debt, such widespread exposure—it was a perilous game, and one mistake could lead to ruin. I wrote to him, urging him to abandon any further aggressive or illegal strategies.
He could play it safe, retire before thirty, live in a grand house in Vienna, with a full staff. I thought his ambition was driven by nothing but greed, a desire for money for its own sake. Later, I would come to understand: it was not the money that drove him, but a dream—a dream that would one day mirror my own.
By early 1905, Gustav had already embarked on a journey abroad, seeking loans from nigh every corner of Europe—and even America. His strategy remained unchanged: using money to gain leverage on gold, and using gold to acquire more loans. He was determined to win once again, and win he did.
By the dawn of 1905, Gustav had amassed thirteen thousand pounds sterling—equivalent to 325,000 Krone, the value of one hundred houses. In early 1906, the only comfort I received was his decision to reduce his leverage. As Gustav put it, he needed to downsize his portfolio. By then, the markets were beginning to show signs of instability. He would have to be more selective in his acquisitions and far more cautious in managing his debts.
What he accomplished was, without question, the most aggressive—and illegal—trading strategy I had ever witnessed. From a mere 2000 Krone to 325,000 in just two years. A sum that represented the culmination of lifetimes of work, it was almost incomprehensible. A staggering increase of 162.5 times the original value.
In retrospect, it is almost unfathomable that he escaped the notice of the British authorities. He had used somewhere between one and two thousand pounds that were not even his in that year alone—whether through banks attempting to hedge or wealthy individuals seeking to profit without paying taxes.
My own financial fortunes between 1904 and 1906 were far less enviable. I had devoted myself to painting, and while I could honestly claim to have made remarkable progress, the true measure of my improvement was evident in the increasing quality of my work from season to season.
In 1905, I began selling my street art for a modest sum of Krone. I had reached a point where I deemed my work worthy of such recognition. I felt pride swell within me, for even though Gustav was the breadwinner, sending money home, I was beginning to carve out my own path. For the first time, I could sense the dreams I had long held within my grasp.
To my dismay, mother began urging me to attend art school. I understood her reasoning completely. Gustav was already making a name for himself in the world, while I—an adult—was merely a man painting for a handful of Krone on street corners. She pointed out that such an education would improve my style, allow me to study color theory, and deepen my understanding of artistic methods.
I hated the very idea of leaving her behind. Since our father's death, she had grown ill, though the changes were subtle—slower to rise, later to wake. It was the small things that revealed it. Yet she insisted it was nothing, that she was fine.
It was doubt that kept me by her side, but after weeks of persistent pleading, I finally decided, of my own accord, to apply. The school of my choice was the Vienna Academy of Fine Arts. My application would be reviewed in January of the following year, and I would have to present the culmination of my life's work.
Eight months were all I had to prepare.