Very random thoughts on Gringott's Bank

[Steve]

No: HPFGUIDX 98441

--- In HPforGrownups at yahoogroups.com, squeakinby <squeakinby at t...> wrote:
> Since Harry's inheritance just came up, I've long wondered how this 
> bank works.
> 
> First tho I wondered how the Potters amassed so much gold.  What did 
> they do for a living?
> 
> On to the bank.  This gold is simply in a vault, hence it's not 
> getting any interest.  Shouldn't it have been invested? With all the 
> money handling going on there, surely the Goblins conduct business 
> in much the same was as the RW, investing and such.
> 
> Is Arthur Weasley's pay automatically deposited in their vault?
> 
> Jem


bboy_mn:

Of course, the answer is, we don't know, but that's never stopped us
before; so we speculate.

Here is a link to a relatively recent thread that starts out talking
about Sirius, his bank vault, and how he managed to by Harry's
Firebolt broomstick. In the course of the discussion, it breaks off on
several tangents; one of which is ...

From:  "Steve"/ bboy_mn
Date:  Mon Apr 19, 2004
Subject: Re: Sirius and Gringotts - Banking Q & A; mostly Q
http://groups.yahoo.com/group/HPforGrownups/message/96410

This won't necessarily answer all your questions, but some interesting
points are touched on. Mostly, in this post, I've done exactly what
you've done; ask a lot of question, and speculated on a few answers.

The thread starts with this post...
Date:  Mon Apr 12, 2004
Subject:  Sirius and Gringotts
http://groups.yahoo.com/group/HPforGrownups/message/95704

Potter's Gold-
First and foremost, James inherited most of his money, so he didn't
really need a high paying job. As long as he had work here and there,
now and then to offset his expenses, he was good to go.

Some speculate that since the inventor of the Golden Snitch was from
Godric's Hollow, and that the Potters were living at Godric's Hollow
when they dies, that they were the heirs to the 'Golden Snitch' fortune.

The problem with that is we don't know for a fact the Gordic's Hollow
is the Potters ancestral home. I may have simply been a house they
rented or borrowed while hiding from Voldemort. So the 'Godric's
Hollow' connection is very strained.


Gold in the Vault-
I have many speculations on Gringotts, all of which I like to call
'logical expansions of the wizard world'. Which means, I made it all
up, but I tried to make up things that are logical and likely.

I think money can be transferred from account to account. Meaning that
Arthur could get direct deposit of his pay, if he chose to. It also
means that Sirius can mail order Harry's Firebolt broom without having
to lug around a bag of gold. The order form was an authorization for
Quality Quidditch Supplies to transfer the gold from Sirius's vault to
their own vault.

Since the purchase of Harry's broom by Sirius implies the possibility
of a written authorization to withdraw funds, that opens the door for
Checks and Bank Drafts. We haven't seen them, but it seems the logical
extension of what we have seen.

I also believe, when you are in a hurry, you don't have to go to your
vault to get money. You simply sign a withdrawal slip, the Goblins
give you money from 'cash on hand' then later remove that money from
you personal account.


Magical Bankers-
Notice how easily Molly is able to remove money from Harry's account.

I believe that the Goblins have some type of in-grained magical truth
detection. So when Quality Quidditch Supplies presents Sirius's
authorization to withdrawn the money for Harry's broom, they
instinctively know it is a valid authorization. 

Equally so when Molly takes money from Harry's account. The Goblins
have some instinctive means to determine that Molly is making a
legitimate authorised request for Harry's money.


Investment Bankers-
I think the Goblins are heavily into investing. They exist for the
sole purpose of making money and they are open to doing so by any
means necessary. For example, the most common bank investment is
loaning money. We have already seen examples, such as the Goblins
loaning Ludo Bagman money to finance his gambling. Reasonably, they
would make personal and business loans. But, on your life, you do not
want to default on a loan from the Goblins. I suspect the rules are
very strict and the penalties equally harsh and unforgiving.

Another question, all those tombs upon which the Bank is curse
breaking, are they robbing those tombs or are they working in
cooperation with local wizarding governments for a share of the
'booty'? Cusse breaking and treasure hunting has to be an immensely
profitable business. When Harry first enters Gringotts, he sees some
Goblins weigh out Rubies the size of coal (tennis ball to softball
size in my eyes). 

In additions to personal and business loans, I suspect that rather
than loan money to up and coming businesses, the Goblins invest in the
company by buying a share in the company. If the company is successful
the Goblins get an ever growing return on their investment, and
instead of getting their money back with interest, they get a return
in the form of profit sharing for as long as the company is in business. 

I suspect that the Goblins can be a little ruthless in their lending
practices. I speculated in a Fan Fiction, that the Goblins, in the
distant future, loaned Fred and George money for their business.
Unfortunately, F&G didn't read the loan agreement carefully, and
didn't notice a clause that allowed the Goblins to refuse to take cash
payment. But instead, claim an equal value share of the collateral,
which in this case was the business itself. 

Much to their immense dislike, F&G became business partners with the
Goblins. Wise, but not totally ethical, move on the part of the
Goblins. As Weasley enterprises grew, the value of the Goblin's
investment grew. That combined with profit sharing, and over time, the
Goblins got a return many many many times the size of their orginal
investment. That's exactly the kind of sneaky business practice I can
see the Goblins engaged in. 


Goblin's and the Muggle World-
I suspect Wizard Law reigns in the Golbins a bit, and prevents them
from mucking up business in the muggle world. But I don't think it
keeps them out of the muggle world entirely. I suspect that the
Goblins have several 'front' businesses in the muggle world run by
muggle borns or muggles who have married witches or wizards. They use
the 'front' business to 'launder' muggle money, and engage in
investmenting in the muggle world. Also, they may be involved in front
businesses that exist to move legal goods and services between the two
worlds. 

You know the Goblin's motto, "Anything for a buck". (I made that up.)

Well, it's all pure speculation with hardly a shred of evidence to
back it up, but that's how I see it.

bboy_mn