In 1925, the Eiffel Tower needed repairs.
But that was a divisive topic.
Public opinion varied. Some people felt it would take too much money to maintain.
Today, the general opinion is that the Eiffel Tower is beautiful – an iconic part of Paris’ skyline.
Back then, there were some who found it ugly.
Couple that with high maintenance and no surprise, some citizens wanted the steel tower dismantled.
Some of the biggest scrap dealers in Paris received a letter from the ‘Deputy Director General (Ministry of Mail and Telegraphs)’.
The dealers were asked to meet the government official in a posh hotel. They were also asked to keep a low profile. This was a sensitive and secretive topic.
The government official – Victor Lustig – met the dealers separately in the hotel room. He informed them that the government was planning to get rid of the Eiffel Tower – 7,000 tons of scrap steel.
Victor took the scrap dealers on a tour around the tower in limousines. He showed them what was going to be available.
One of the dealers, Andre Poisson, seemed keener than others.
He asked lots of questions to verify the offer. Poisson was new to Paris and was gunning to bag this major deal.
Victor Lustig slipped into the conversation a bit about himself – that he was a government official and did not earn much money; that this was a big deal.
Poisson understood the hint. Victor Lustig was nudging for a bribe.
A government official asking for a bribe – this was enough validation for Poisson. He saw a clear path to getting 7,000 tons of scrap steel.
He paid Victor $70,000.
One hour later, Victor left Paris. In fact, he left the country of France altogether. He went to his home country of Austria.
From there, he kept a close eye on the newspapers. But he was not in the news.
Poisson was embarrassed. He did not report to the police that he got scammed.
Victor Lustig was a scammer, not a government official.
He was a master at his profession. His scams were elaborate and vast.
He routinely scammed people who would otherwise be extremely careful.
After repeated scams in Paris, Victor felt it was unsafe for him to stay there. He took a ship and went to America.
On the cruise, he spent lavishly. His co-passengers grew curious about his source of income.
Reluctantly, he spoke about his “money box”.
After much hesitation, he showed his friends a wooden box in which he would enter one note. And it would give out two notes!
Many guests wanted to buy the box from him.
But he refused.
Eventually, he would sell it to whoever bid the most. Sometimes for $10,000. Sometimes higher.
He went on such journeys multiple times. He would always sell when the ship was about to reach the US.
How did it work?
He just inserted a few real notes into the box. After some time, the notes would run out.
But by then, Victor would be long gone.
This money box was a scam he pulled off numerous times – even on some senior government officials.
His most courageous act was probably on the dreaded gangster-criminal, Al Capone.
Victor asked Al Capone for $50,000. He promised to double the money in 2 months.
2 months later, he returned to Al Capone and informed him that he had failed; and that he came to return the $50,000 he took from Al Capone.
Impressed, Al Capone, gave him $5,000 as a reward for his honesty.
Turns out that Victor’s original plan was this – to impress Al Capone with his honesty and get rewarded for it.
He was captured by the police a number of times. And he managed to escape the prison a number of times.
He eventually died of pneumonia – in prison.
If there’s one thing that Victor Lustig’s case highlights, it is this: smart people are not immune to scams.
Victor had scammed big businessmen, government officials, and even one of the most dreaded gangsters in America.
Whenever a financial transaction is involved, careful studying is absolutely necessary.
The images above were generated using AI tools.
Quick Takes
+India’s GDP growth rate stood at 6.7% in the April-June quarter (vs 7.8% in the Jan-March quarter): MoSPI.
+Production by 8 main sectors of India increased 6.1% year-on-year in July (vs 4% in June). Steel, electricity, petroleum, and coal sector output rose the most.
+India’s forex reserves rose to an all-time high of $681 billion after adding around $7 billion in the week that ended on 23 Aug.
+NPCI launched new features for ATMs which include making deposits using only UPI, without the need for a physical card.
+ECOS India Mobility IPO was subscribed 64.26 times. Retail subscription: 19.78 times.
+Premier Energies IPO was subscribed 74.38 times. Retail subscription: 7.69 times.
+The government has approved 3 new railway extension projects worth more than Rs 6,000 cr in Odisha, Jharkhand, West Bengal, and Chhattisgarh.
+Indian startups received $6.3 billion in venture capital funding in the Jan-Jul period, a 43% year-on-year rise: GlobalData report.
6-Day-Course
Theme of the week: safe investments
We’ve reached the end of this week’s course that started on Monday. Here’s a test you should take. Get pen and paper!
Question 1:
The risk involved with FDs depend on the size of the bank. FDs in large banks have ____________ risk as compared with small banks.
-Higher
-Lower
-Equal
Question 2:
Investing in gold ensures higher returns at any day you want to sell your investment. Price of gold never falls with time.
-True
-False
Question 3:
Arrange the following investment options based on the risk involved — property, government bonds, and share market.
-Share market > property > govt bonds
-Govt bonds > property > share market
-Property > govt bonds > share market
Question 4:
If you want slightly higher returns than investing in govt bonds, which of the following options can be a good choice with minimum risk?
-FDs
-Large-cap mutual funds
-Corporate bond funds
Question 5:
Low-risk investments like liquid funds, FDs, gold, etc. are a good way to store emergency money. It helps in growing your money with very low risk involved.
-True
-False
Answers:
Q1: Lower
Q2: False
Q3: Share market > property > govt bonds
Q4: Corporate bond funds
Q5: True
The information contained in this Groww Digest is purely for knowledge. This Groww Digest does not contain any recommendations or advice.
Team Groww Digest