Benjamin Josman Fink (1847–1909). always better known as B. J. Fink, was a Melbourne-based investor, financier, land and property speculator, and politician. First emerging as a major furniture retailer, he also invested in mining and the Georges department store. Fink established Mercantile Finance, which became his main company, among many other public companies. He is associated with the Melbourne land boom during the late 1880s—becoming known as the 'Prince of Speculators'—and with the subsequent crash of 1891-1893, which badly damaged his reputation. Fink's and his companies' financial failures were so large as to be significant in the banking crisis of 1893. Fink was an independent member for Maryborough and Talbot in the Legislative Assembly of the Victorian Parliament from 1883 to 1889.
The Block Arcade in Melbourne, which was built for Fink, is a remnant of his once extensive property holdings.
His wife, Catherine Fink (1854–1943), managed the Fink family fortune, after Fink's financial failure. Around the times of Fink's death and their son's death, she made some large philanthropic donations.
Early years and family background Fink was born on 21 April 1847, at St Pierre (Saint Peter Port), on Guernsey, one of the Channel Islands. He was the eldest son of Moses Fink (c. 1810–1885) and his wife Gertrude nee Ascher (c.1822–1893). His mother was a sister of the composer and pianist Joseph Ascher. His paternal grandfather, also Benjamin Josman (or Jossman) Fink, was a German-born rabbi.
Fink went to the Jews College in London, for around two years. It is now a rabbinical college, but also had a day school, until 1880. He did not complete his schooling there.
In April 1861, Fink's family arrived in Melbourne, aboard the ship Suffolk. At the time that they migrated, the family included four daughters and five sons, and another daughter—named Victoria—was born in Victoria. The family settled in Geelong, and Moses Fink initially worked for Hirsch Fink, as an itinerent hawker. Hirsch Fink, Fink's uncle, had been in business at Geelong, as a wholesale grocer and wine and spirit merchant since 1852.
Fink attended the Flinders School at Geelong for around two years. Two of his younger brothers, Woolfe Fink (1853–1914) and Theodore Fink (1855–1942), also attended that school, and later Geelong College. However, the Fink family moved to Melbourne, in 1871, and both those brothers attended Melbourne Grammar School. While there, Theodore was a classmate of Alfred Deakin, who became his lifelong friend. The two younger brothers both subsequently attended the University of Melbourne.
Woolfe Fink became a barrister and scholar of the classics and Shakespearean works. He would succeed Fink, as chairman of the Federal Hotels Group. His daughter was Molly Fink. Theodore Fink became a prominent lawyer in Melbourne, was the member for Jolimont and West Richmond, from 1894 until 1904, and became chairman of the board of Herald and Sportsman Newspapers Co. Ltd., which in 1902 became Herald and Weekly Times Limited.
Fink had two other brothers, Mark (or Marc) Fink (1848–1927) and Magnus Fink (1850–1915). After participating in the 'Hokitiki' [sic] gold rush in New Zealand, Mark (or Marc) lived at Brighton Beach in Melbourne. He was an active investor in various gold mines, including at Mount Browne, near Tibooburra. He became chairman of the Federal Hotels Group, after the previous chairman, his brother Woolfe, died in 1914. Magnus became a farmer on land at Buln Buln, in West Gippsland, although he did have some minor involvement in Fink's ventures.
Fink's elder sister, Cornelia, married Oscar Brandt, of Ballarat, in 1869, linking the Fink and Brandt families. Oscar Brandt became a pawnbroker at Geelong in 1872, and was later involved in some of Fink's companies. Brandt names were associated with various businesses that were also associated with the Fink family, well into the early 1900s.
On 14 October 1874, Fink married his Geelong-born cousin, Hirsch Fink's only daughter, Catherine Fink (1854–1943). Later described as "a tall handsome woman", she became vital to Fink's family's retaining or recovering much of its wealth, during the 1890s. After Fink's death in 1909, she continued to manage the family's investments.
Early work career (1863 - 1874) For around three years, from when he was 16, Fink was an importer and trader of produce, on the New Zealand goldfields. His brother Mark (or Marc) was on the Hokitika goldfield during this period. There were businesspeople of Jewish background on that goldfield during the rush years.
Fink began working as a clerk at the firm of Wallach Brothers in Melbourne, in 1865. In the same year, Wallach Brothers opened a large furniture store and showroom in Elizabeth Street Melbourne, and merged with S. Wallach and Co. Fink was still a clerk in 1868.
In mid 1869, Wallach Brothers advertised that they had received a shipment of Schwechten's pianos, and in August 1870 advertised the arrival of "another large assortment of these superior instruments". Two more shipments arrived in 1871. Schwechten pianos seem to have been selling quickly. Fink was a gifted pianist, and that helped his becoming a very successful piano and furniture salesman for Wallach Brothers.
Early business career (1874 - 1879)
Wallach Brothers Fink became a partner of Wallach Brothers. It is unclear what share of the business he owned or when he became a partner, but he did not need to buy his share. An biographical account, from 1887, states, "That perseverance, integrity, and application which have characterised his whole life, aided him in a few years in securing a partnership in that firm without the cost of any outlay." In June 1874, the partnership with Julius Wallach was dissolved, with Fink assuming sole control of the business.
During the 1860s and 1870s there was a shipping company, also 'Wallach Brothers', with an address of 153 Lower George St, Sydney. It should not be confused with Fink's retailer Wallach Brothers, which did not have a presence in Sydney until the early 1880s.
In 1879, Fink was suffering ill health, and he stood down from day to day management of Wallach Brothers, but retained ownership of the business. After a short period of rest to recover his health, he focused on investment and speculation. It was also in 1879, that Maurice Aron became Fink's partner in Wallach Brothers.
Investment and speculation (1879 - 1889)
Gearing Fink had probably borrowed to buy Wallach Brothers, and it was a financing strategy—now known as 'gearing' or 'leverage'—that he continued to use, as an investor and speculator. Gearing involves purchasing an asset, usually using some capital, but covering most of the purchase price using debt financing. At an extreme, the purchase of the asset can be financed by debt alone. However, if the asset falls in value repossessing the asset can result in a loss for the lender if there was insufficient equity capital provided by the debtor.
Another way of gearing is to buy an asset, and then mortgage it afterwards. Fink would later use this approach in his career, allowing a perception of ownership to exist, while freeing up cash for other purposes.
Successful application of gearing is predicated upon either rising value of the assets or upon increasing the cash flow derived from the asset. If asset prices rise, gearing increases the return for a given amount of capital investment. However, if asset prices fall sufficiently, the original capital investment can be wiped out entirely, leaving only the debt.
Mining Investments Coal mine Victorian investors had poured around £70,000 into a venture, known as the Australasia Coal Company Limited, which was developing a coal mine at Winding Creek—now Cardiff—near Lake Macquarie. This was at a time of major growth in the N.S.W. coal industry. The company's first chairman was James Munro, a name that would figure prominently in the later land boom, and its unravelling. Later its chairman was James Francis. The mine development was mismanaged. The investment was wasted, because funding ran out before the company's mineshaft reached the coal seams. An attempted capital reconstruction failed, and the company ended up in liquidation with its assets put up for sale by auction.
In what was one of his earliest purely speculative ventures, in September 1879, Fink bought the assets of Australasian Coal Company from its liquidators, for £8,500 (some sources say for £9,000). He then sold off the company's nearly-new machinery, realising an immediate profit.
He retained the mine itself. Fink stated that he intended to reopen the Australasia Coal Company Limited coal mine, once the Sydney-Newcastle railway line was completed. After the time that he bought the coal mine, he bought grazing properties in the Cobar area. The mine never reopened, and the land and a railway corridor to it was resumed by the Crown in 1907.
Gold mining Fink made investments in deep lead mines around Maryborough, including Napier, New Kong Meng, Chalk, and Duke mines. He was behind the Lord Nelson Gold Mining Company, St. Arnaud, and involved in other mines including the Great Southern Consols, at Rutherglen.
His revival of the mines brought popularity in Marybourough, leading to his becoming an elected representative for the area, in the Legislative Assembly of Victoria, from 1883 to 1889.
Banking In 1881, Fink created a bank known as the Mining and Agricultural Bank of Australasia, at Ballarat, in August 1881. It had authorised capital of £1,000,000, in 200,000 shares of £5 each. The initial issue was of 100,000 shares, of which 75,000 were reserved for the promotors of the bank. 25,000 were offered to the public, at a 10 shilling premium. It began business in October 1881, after changing its name to the Joint Stock Bank of Victoria—it had no connection with the similarly-named but far larger Australian Joint Stock Bank—and was buying gold as a part of its business.
Fink's Joint Stock Bank of Victoria merged with the larger, City of Melbourne Bank, in 1882. Fink and other Joint Stock Bank of Victoria shareholders received a significant shareholding in the merged banking venture,which carried on under the name of City of Melbourne Bank. Fink remained a shareholder until 1891, when he sold his shares. He ceased to be a director around the same time.
City of Melbourne Bank had resulted from the renaming of Victoria Finance and Agency Company in October 1873. It sought subscribers for its shares in November 1873. It raised more capital in 1877. It gave every sign of being a conventional, profitable colonial bank. A Scottish immigrant, who had banking experience in Scotland and Mauritius, Colin Longmuir (c.1841-1894), joined the City of Melbourne Bank, as an accountant, in 1876. Four years later, Longmuir became the general manager, a post he then held until his death.
Mercantile Finance In May 1881, The Lyell and Gowan business was folded into a new company, The Mercantile, Finance, Guarantee and Agency Company (Limited), with an authorised capital of £100,000, which was when Fink became involved. Andrew Lyell would remain the manager until 1888. The original company's shareholders were private investors.
In 1885, a new publicly-listed company was formed to take over the operations of the old. The new company, Mercantile Finance Guarantee and Agency Company Limited, had an authorised capital of £500,000 (in 100,000 shares of £5 each). The initial float was for 25,000 shares, of which 9,000 were offered to the public. Those shares were initially issued partly-paid, leaving £3 15s for later calls if needed. The nature of the business also changed to allow administration of deceased estates, negotiation of mortgages, and other investment functions. The public offer was reportedly oversubscribed.