Pepper King

In London it is possible to speculate in dried flies. And on at least one occasion there was a disastrous attempt to corner the market in ant eggs. To such a pretty trading pasture at some indeterminate date went greasy Garabed Bishirgian, fresh from the sere uplands of his native Armenia. He took a flier in Turkish carpets. He traded in caviar. He gambled in tin. By the time he set himself up as a stockbroker, his friends declared that his only god was a "rising share." In 1929 he swore allegiance to His Majesty George V.

Fortnight ago Garabed Bishirgian went down to his model farm in Surrey, where he fancies prize pigs. There far from his swank Park Lane house, where the extravagance of his fabulous stag parties awed even his rich friends, the greasy, thick-set little Armenian contemplated disaster. Garabed Bishirgian was now the "Pepper King," and, as all Britons knew, the pepper pool was due for a grand smash.

Failure of Strauss & Co., one of the biggest commodity houses on the venerable Baltic Exchange, gave Mincing Lane the jitters (TIME, Feb. 11). The Strauss failure was brought on by its short position in peanut and vegetable fats, of which there is a decided world shortage. But what tripped the Pepper King was not a shortage but a glut.

Capitalizing on the British craze for commodity speculation that started in 1932, a pool lofted the price of pepper from 18-c- per Ib. last autumn to 31-c-. That attracted the attention of Indian exporters, who promptly began to shake all their pepper on the pool. By last week London warehouses were bursting with no less than 42,000,000 Ib.--a three-year supply.

On the eve of "settlement day," when the pepper plungers would have to lay nearly $10,000,000 cash on the line for their contracts, came news that a fresh pepper shipment of 13,000,000 Ib. was London-bound aboard a steamer ploughing up the Red Sea. And when Garabed Bishirgian returned from his week end with his 600 pigs in Surrey, he found that pepper trading had been suspended.

For three days the embarrassed firms, including the Pepper King's own house of James & Shakespeare, Ltd., strove to put their accounts in order for settlement day and the inevitable tumble in pepper prices that would follow. Garabed Bishirgian, who had often deliberately lost at high-stake poker in order to help the friends he had whipsawed in the market place, was calm. Pepper trading was suspended for another day and then another and another.

But frowning on the public orgy in pepper, in shellac and in other recent British favorites, the banks refused to aid. It was predicted that six firms would collapse. Fear spread throughout the City, cutting heavily into the sale of three big new bond flotations. Although settlement day was postponed over last week end, James & Shakespeare was in too deep for even its smartest stockholder. To the wall it went with no inconsiderable part of Garabed Bishirgian's fortune. One other house failed before the banks relented.

Final casualty was Rolls & Sons, a 75-year-old produce house, which was unable to meet its obligations when the pepper market reopened with the settlement price fixed at 16-c- per Ib., a 45% drop.

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