HIGH FINANCE: The House of Matches

It was March 12, 1932. In Paris, diplomats and common men moved in solemn lines past the bier of a fallen world figure, Aristide Briand. Across the Seine, in a room on the Avenue Victor Emmanuel III, another world, figure wrote three short notes. One of them ended: "Goodbye now and thanks. I.K." The big, round-faced man rose from his desk, smoothed out the unmade bedclothes, lay down, shot himself with a pistol just below the heart.

The headlines, reserved for Briand, instead blazoned the news: Ivar Kreuger, the grammar-school dullard from Kalmar, Sweden, who had grown up into the world match king, had killed himself. Why?

Nobody knew—at first. Then everybody knew. Kreuger was one of the greatest swindlers of all time.

Last week, after thirteen and a half years' work, Manhattan's Irving Trust Co. finally came to the end of the incredibly complicated financial web of forgeries, theft, fraudulent bookkeeping, and companies which existed only in Kreugers imagination. As trustee of the bankrupt International Match Corp., an American concern and biggest of 140-odd subsidiaries of the huge holding company, A/B Kreuger & Toll; Irving Trust submitted its final, 171-page report on its stewardship. The box score:

¶Kreuger had swindled the public directly of $560,000,000, of which $250,000,000 came from the U.S.

¶All of his companies had gone broke, and many a staid old U.S. firm, including Lee, Higginson & Co. had teetered dangerously from the financial earthquake.

Good Money After Good. When it started poking in the ashes of the Kreuger bonfire on April 13, 1932, Irving Trust found only $9,881 in cash on hand. Also on hand, from creditors all over the world, were 24,000 claims totaling $1,168,000,000. Only claims on debentures bought by American investors were allowed. Irving Trust weeded them down to $98,000.000 —then set out to find what Kreuger had done with all that money. It never found out. Most of the cash simply disappeared.

In hunting down assets, Irving Trust had to learn the match industry from the bottom, so as to carry on the business of International Match, which had subsidiaries in 15 foreign countries and an annual sales volume of $14,000,000. Irving Trust sued the U.S. for recovery of back income taxes which Kreuger had paid on fictitious income, finally got $1,345,000.

Thirty-two Cents on the Dollar. Irving Trust got Sweden to surrender $21,000,000 of $50,000,000 in German bonds which Kreuger had stolen from International Match to use as collateral against his own indebtedness. Then, with the help of the U.S. Government, it forced Nazi President of the Reichsbank Dr. Hjalmar Horace Greely Schacht to pay $2,000,000 on their interest.

On the most fantastic of all Kreuger's frauds, the bank could do nothing. Kreuger had had a Stockholm printer print $102,000,000 worth of counterfeit Italian bonds. Kreuger had clumsily forged the appropriate names to them.