Greatest Crook

Eleven days after a pistol shot in Paris put an end to Ivar Kreuger's fantastic dreams of a match empire, Price, Waterhouse & Co. sat down to audit the Kreuger books. Within a month they pronounced Ivar Kreuger a crook. But until last week when Price, Waterhouse issued the final report on their world-wide investigation, no one knew precisely how good a crook or how great a swindler Ivar Kreuger really was.

Threading their way through the ledgers of a dozen holding companies, 140 operating subsidiaries and trading concerns, Price, Waterhouse traced his manipulations back to 1917. Even before that Ivar Kreuger had been at it. "The fraudulent practices assumed large proportions in 1923 and 1924," the report stated, and had reached a climax in the forgery of $100,000,000 of Italian Government bonds. During those 14 years Ivar Kreuger reported profits of more than $300,000,000, but Price, Waterhouse unearthed operating profits of only $40,000,000 including "a number of items the genuineness of which is doubtful." Thus in the booming 20's Ivar Kreuger could earn but 1 1/2% on his capital. "Neither these earnings nor any other facts . . . lend any support to the view that Kreuger possessed ability so extraordinary as to warrant the grant to him of the freedom from control or disclosure of his actions which he enjoyed."

During this "freedom from control'' Ivar Kreuger mulcted the public of $560,000,000, gulled banks & bankers for another $164,000,000. Out of the $724,000,000 capital at his disposal he paid back to the public, in interest and "dividends," $180,000,000. In securities, monopolies and associated companies he invested $458,000,000, worth last March at market prices $207,700,000--all that remains of Kreuger's $750,000,000 dream.

Two items in the Price, Waterhouse report give the measure of Ivar Kreuger as a crook and a swindler: "Withdrawn by Ivar Kreuger on current accounts," and "Securities and other assets appropriated" --432,046,000 Swedish kroner net, at par about $115,000,000.

Kreuger was able to make off with $115,000,000, Price, Waterhouse, explained, not only because of the confidence he inspired and his autocratic powers but also because of "the loyalty or unquestioning obedience of officials who evidently were selected with great care (some for their ability, others for their weaknesses). . . ." Moralized Price, Waterhouse: "The history of this Group of Companies emphasizes anew the truth that enterprises in which complete secrecy on the part of the chief executive as to the way in which important parts of the capital are employed is, or is alleged to be, essential . . . are fundamentally unsuited for public investment."*

In Washington last week Senator Peter Norbeck, onetime South Dakota well-digger, set his Banking & Currency Committee once again to probing buying & selling practices on U. S. stock exchanges (TIME, July 4). They began by poking in the ashes of Kreuger's matchdom. Witnesses brought the Committee up to date on Kreuger history but were unable to shake Senator Reynolds's firm belief in the No. 1 Kreuger legend: that Ivar Kreuger's death was as false as his life. Lesser legends added recently to the great book of Kreuger lore:

P:That after Kreuger's death young & beauteous women in all parts of the world bombarded his executors with demands for their regular allowances. P:That Kreuger once opened a trading account with a Paris broker, giving him authority to speculate in U. S. stocks. The broker promptly lost most of the money in the account. Fazed not a whit, Kreuger supplied more money, told the broker to keep it up until he learned how to speculate. Until Kreuger's death the broker was still learning to speculate and Kreuger was supplying more & more money, no questions asked. P:That Kreuger never drank anything but champagne but that he could drink magnums of that without getting drunk. P:That when Kreuger's health became a matter of grave concern, U. S. bankers asked him to name the man they were to turn to in case of his death. Kreuger gave them the Paris address of Professor Bollitov, a sometime fabulously rich Russian tycoon, who knew as much about his labyrinth of companies as himself. The bankers cabled their Paris representatives to locate White Russian Bollitov. At the address given, the representatives were informed that Professor Bollitov was away, would return shortly. Meantime Ivar Kreuger returned to Paris. When the bankers' representatives called again, Ivar Kreuger in a great false beard received them solemnly as Professor Bollitov, answered all their questions. P:That when he was in a city where he was not well known, Kreuger would always sneak away from his friends to roister from night club to night club, entertaining the hostesses with naughty stories in French, German, English or the Scandinavian tongues.

All the Kreuger legends are but gropings in the dark for the real explanation of how Ivar Kreuger, mortal man, duped prince, pauper, layman and banker, so long and so completely. They are merely attempts to simplify the complex, enigmatic personality that seemed always to compel blind faith. And though accountants can explain what he did, the final explanation of how he did it lies sealed in a Swedish urn.

*Corporate publicity is once more in the ascendancy as an object of public and private reform. Not until last fortnight did the New York Stock Exchange demand independent audits of all annual financial reports issued by companies applying for security listing (among important corporations still auditing their own books are Standard Oil of New Jersey and Royal Dutch Co. for the Working of Petroleum Wells in Netherland Indies). But this ruling is of little present importance because it does not affect companies whose stocks & bonds are already on the Big Board (unless they list new securities), nor does it stipulate the degree of disclosure. Most corporations, notably big tobacco and chemical companies, remain free to tell investors as little as they choose. Though the Stock Exchange agitates for quarterly reports from corporations with listed securities it does not yet demand them. For a more notable step toward frankness, see p. 15.

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