Starting an investing blog covering the junior mining sector requires some preparation. So I trekked up Howe Street and east on West Georgia to the Vancouver public library, where I borrowed Fleecing the Lamb: The Inside Story of the Vancouver Stock Exchange, by David Cruise and Alison Griffiths.
Published by Douglas & McIntyre in 1987, two years before Forbes magazine dubbed Vancouver the “scam capital of the world,” the book’s pages are populated by hucksters, Houdinis and a species of wolf native to Howe Street. The Vancouver Stock Exchange existed, the authors argued, to serve itself and fleece investors, even if the occasional gold nugget turned up in the blizzard of paper blasted out by VSE issuers.
Twenty-five years later, much – and little – has changed. The VSE has been absorbed into the TSX Venture Exchange and regulation has improved. Vancouver has cleaned up its act and is recognized as a global centre of mineral exploration excellence. But every now and then, uncomfortable echoes of the past emerge: a gold junior proclaiming imaginary ounces, a geologist salting assays or the latest pump-and-dump scheme that has relocated south of the border.
And now, as then, Howe Street remains an address where smart speculators can profit handsomely.
Also featured in Fleecing the Lamb are prospecting and trading legends who still inspire awe, Vancouver power players who discovered mines and built fortunes.
With gold poised to continue its ascent as the hum of central bank printing presses gets louder, World of Mining will feature in coming days some of Howe Street’s more colourful characters. For if, as Mark Twain stated, history rhymes, it’s time to shine a light on a well-travelled street that’s about to get some more traffic.
Gustav Konstantin (Alvo) von Alvensleben
Born into German nobility, the leisure-loving von Alvensleben arrived in Vancouver in 1904 virtually penniless. But he found another gear in his new homeland, as well as a restless ambition and the ability to leverage his charisma into cash flow. He worked as a travelling merchant throughout the Fraser Valley, shot game that he sold to the Vancouver Club and high-end city restaurants, and bought a fishing boat in 1905, which he used to cash in on one of B.C.’s greatest salmon runs. Von Alvensleben married Edith Mary Westcott, a Ladner woman.
Gold brought him to Vancouver, but he soon discovered that the real gold mine was real estate. Von Alvensleben set up shop on Granville under the name Alvensleben Finance and General Investment Co. He then “marched into the office of the editor of the Vancouver Sun newspaper and imperiously demanded an open-ended account,” according to Fleecing the Lamb. “ ‘Credit?’ asked the bemused editor. ‘For how long, and to what limit?’ ‘Forever,’ Alvo shouted. ‘And no limit.’ “ (He got 90 days of credit).
Von Alvensleben was a mysterious, flamboyant addition to a sleepy Vancouver Stock Exchange when he bought one of the first seats on the fledgling exchange. Rumoured to be Kaiser Wilhelm’s man in North America, he turned his European charm into a flood of money from financiers in both Vancouver and Europe.
A pioneer on several fronts, von Alvensleben’s first promotion was a company drilling for oil in the Athabasca tar sands, and he was soon backing timber, fishing and coal mining companies. With impeccable timing, he made a fortune in Vancouver’s real estate boom between 1908 and 1912, by which time he’d built a fortune estimated as high as $25 million (the equivalent of $500 million in 2012 dollars).
Along the way, he financed the Dominion Trust building at Hastings and Cambie and the Wigwam Inn at Indian Arm, whose guests included John D. Rockefeller and John Jacob Astor. Von Alvensleben moved his family into a Kerrisdale estate on West 41st Avenue that is now Crofton House, a private girls’ school (there is no mention of Alvo on the school website’s History page).
But 1913 brought recession to Vancouver, and falling housing prices drove the leveraged tycoon overseas to raise more money. World War I broke out during one such trip to Europe, and von Alvensleben’s German connection worked against him. His Canadian properties were seized by the Custodian of Enemy Property and he retired to Seattle, where he dabbled in the stock market and property development.
Von Alvensleben later returned to B.C. to mine a small placer deposit in the north, but his fortune was gone. He died in Seattle in 1965. “We were always a very poor family,” Alvo’s son said of the family’s later years in the U.S.