Manawatu Daily Times A Fallen Lucifer

Manawatu Times, Volume LV, Issue 6839, 21 April 1932, Page 6

Manawatu Daily Times A Fallen Lucifer

It was only to be expected that a time like the present, breaking as it has clone all records for financial losses and nnsolvable economic problems, should have produced what appears to be the most gigantic fraud in history. But that one of the smallest countries in Europe—and one least affected by the economic blizzard—should have given to Europe Ivar Kreuger and his colossal swindles is a queer commentary on the plight into which the world has drifted and an illuminating sidelight on the interdependence of nations. A Swedish matchmaker commits suicide in Paris, and the stock exchanges of two continents rock on their foundations. Who was this man, to whom half the smokers of the world, New Zealanders included, paid toll on every match they struck? Ivar Kreuger was born in ISSO, in a small Swedish country town, his father being the manager of a match factory—a family concern. In 1900, having passed his final examinations at the Royal Technical University in Stockholm, lie went abroad, without any capital whatever, to try his fortune. In New York he was employed by a real estate firm; in Illinois he worked for a railway contractor; in Mexico he engaged in bridge-building. Then he moved to Johannesburg, where he took over the construction of a hotel at a crisis, secured the necessary backing, and made a profit of several thousand pounds. ( This was Kreuger’s first outstanding success and he spent the fruits of it on travelling in many countries and acquiring invaluable first-hand knowledge of markets and languages. While still in the early twenties he was able to speak and write three or four foreign tongues. “The money was useful to gain experience, while I had the time,” he told a friend in later life. “I never doubted the possibility of getting more money. But time and opportunity come only once.”

Then, as afterwards, Kreuger was helped by liis remarkable memory. Often he proved his capacity to recall the exact terms of a letter hastily read several years previously, and he possessed an extraordinary power of remembering the text of long past conversations. In 1907, at the age of 27, he returned to Sweden, well primed with the -essentials of material success, and in that year he combined with his friend, Paul Toll, -to start a contracting firm at Stockholm. In 1913 Kreuger and Toll, assisted by Kreuger’s family interest in match production, acquired its first holding in a match-manufacturing company. Four years later came the great amalgamation of Swedish match manufacturers—the Swedish Match Company. As more than 90 per cent, of the production of Swedish matches was for exportation Kreuger immediately found himself faced with the intricate problems of selling on the world markets. With the aid of a staff of highly qualified colleagues the Swedish match industry was soon transformed into a world industry, with subsidiary companies and allied enterprises in all the most important countries, and the foundations were laid for all the subsequent dominating enterprises in world-finance, 'England came into Kreuger ! s scheme of operations through his association with the British- Match Corporation. In addition, through the Swedish Match Company and the International Match Corporation of America, he was able to claim in 1928 that his group controlled the match trade in America, Germany, France, Sweden, Norway, Poland, Peru, Greece, Australia, New Zealand, South Africa, Japan and other countries, and employed 60,000 workpeople.

During the past 14 years foreign borrowers turned to the Kreuger group for financial assistance, and, provided the borrowers were prepared to give in return “match monopolies,” large loans were arranged. Loans of this nature were granted among others to Poland, Greece, Estonia, Hungary, Latvia, Yugoslavia, Rumania, Peru and Germany. The combine controlled match factories in 45 different countries in Europe, North and South America, and the Far East. The consolidated balance-sheet of the Swedish Match Company and its subsidiaries for 1930 showed assets valued at £45,000,000, while the Kreuger and Toll assets were valued at a considerably higher figure. The issued share capital of the Kreuger and Toll Company amounts to about £4,250,000. There are also issued about £7,500,000 of participating debentures and about £10,000,000 of 5 per cent, sinking fund debentures.