Ivar Kreuger
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Ivar Kreuger (March 2, 1880 - March 12, 1932) was a Swedish financier, entrepreneur and industrialist. In the time between the two world wars, he was one of the most powerful businessmen in Europe, basing his business activities on match production. He gained a match monopoly and became known as the "Match King".
Ivar Kreuger
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History
Kreuger was born in Kalmar, the eldest son of the banker,
industrialist and Russian
consul Ernst Kreuger and
his wife Jenny.
In school Ivar skipped ahead two classes to graduate at age 16, continuing his studies at
the Royal Institute of
Technology in Stockholm
where he graduated with two Master's degrees from the
faculties of mechanical and civil engineering, at the age of 20.
From the turn of the century he spent seven years
travelling and working abroad as an engineer in the U.S., Mexico, and South Africa, among
other countries, before returning home.
In 1908, he formed
construction firm Kruger
& Toll, with fellow engineer Paul Toll.
The firm was a success and won prestigious contracts like the construction of the Stockholm
Stadium and the department store Nordiska Kompaniet in
Stockholm.
Companies
In 1917
Kreuger formed Svenska
Tändsticks AB (Swedish Match), which by expanding
through acquisition of national monopolies became the worlds largest match manufacturer.
He set up an affiliate to Kruger & Toll in the United States and formed the International
Match Corporation which eventually came to control two
thirds of the world production in matches.
In the years when Europe was suffering from the problems of
the Great
Depression, Kreuger's companies would often give loans to
European governments needing money, and as a security the government would grant his
empire the match monopoly in this country.
In 1929 Kreuger loaned equal to $28 million to Romania. In return, he gained a monopoly
in match sales. This debt remained unpaid to 2002.
Kreuger did not limit himself to mere matches but gained control of most of the forestry industry in the northern Sweden and planned to became a head of a cellulose cartel.
After founding the pulp manufacturer SCA in 1929 Kreuger were able to
acquire the majority shares in telephone company Ericsson, the mining company Boliden, and major
interests in the ball bearing manufacturer SKF, the bank Skandinaviska Kreditaktiebolaget
as well as others. Abroad he acquired Deutsche
Unionsbank in Germany
and Union
de Banques ŕ Paris in France
and by 1931 an estimated 200
companies were controlled by Kreuger.
However the Stock Market Crash of 1929
turned out to be a major factor in the liquidity crisis that would be fatal to both
Kreuger and his Empire.
At the peak of his career the Kreuger fortune was estimated at a value of 30 billion Swedish kronor in 1929, equivalent to approximately 100 billion USD in 2000. In the same year the total loans made by Swedish banks were barely 4 billion SEK, and an average worker had an annual salary of 3,195 SEK.
Kreuger Crash
By 1932, rumours had started spreading that Kreuger & Toll and other companies forming Kreuger's empire had become financially unstable. Securities of Kreuger & Toll were very wanted in the Wall Street. When the company went bankrupt in 1932, claimed assets worth of $250 million turned out to be nonexistent.
On March 12, 1932 Ivar Kreuger was found dead in a hotel
room in Paris. Evidence
suggested that he had shot himself, committing suicide rather than face his creditors.
Later rumors (or rather conspiracy theories) claimed
that Kreuger's wounds had not been self inflicted, but the death nevertheless precipitated
the Kreuger Crash which hit both investors and the group companies.
Prior to the crash, Kreuger had issued thousands of debentures. These were very popular, and a firm public belief in the rising Kreuger empire convinced contemporary Swedes to invest their savings in these "Kreuger papers". Following the Kreuger crash, these debentures became worthless, and several thousand Swedes lost their life savings as a result.
Kreuger is interred in the Norra begravningsplatsen in Stockholm.
Fictional depictions
Ivar Kreuger was the inspiration for the "Bjorn Faulkner", a character in Ayn Rand's 1935 hit Broadway play, Night of January 16th.
Ivar Kreuger was also the inspiration for the character of Paul Kroll in the 1933 Hollywood film The Match King directed by William Keighley, starring Warren William and Lili Damita
Trivia
Invented Three on a Match (superstition) in order to get people to use more matches.
Source
- Torsten Kreuger: Die Wahrheit über Ivar Kreuger, West Berlin: Ullstein Verlag, 1968
External links
- Ivar Kreuger - Bibliography at Project Runeberg
- Ivar Kreuger - A television mini series (in Swedish)
- Ivar Kreuger - at www.ivarkreuger.com
