March 2, 1880 — March 12, 1932

Abroad he acquired Deutsche Unionsbank in Germany and Union de Banques à Paris in France, often with the acquired company’s own money. These maneuvers were made both necessary and possible by his invention, decades ahead of his time, of Enron-style financial engineering, which reported profits when there were none and paid out ever increasing dividends by attracting new investment and/or looting the treasury of a newly acquired company.

By 1931 Kreuger controlled some 200 companies. However, the Stock Market Crash of 1929 turned out to be a major factor in exposing his accounting that ultimately proved fatal to both him and his empire.

In the spring of 1930 he visited the United States and gave a lecture about the situation in world economics at the Industrial Club of Chicago with the title The transfer problem and its importance to the United States. Speech held May 15, 1930. He was invited by President Hoover to the White House to discuss the subject and in June he was awarded the title Doctor of Business Administration by Syracuse University, where he had worked as a young chief engineer when Archbold Stadium was built there in 1907.

In 1929, at the peak of his career, the Kreuger fortune was thought to be worth 30bn Swedish kronor, equivalent to approximately US$100bn USD in 2000. and consisting of more than 200 companies. In the same year the total loans made by Swedish banks were barely 4bn SEK.

Tentative conclusions

One biographer called him a genius and swindler. John Kenneth Galbraith wrote Boiler-room operators, peddlers of stocks in the imaginary Canadian mines, mutual-fund managers whose genius and imagination are unconstrained by integrity, as well as less exotic larcenists, should read about Kreuger. He was the Leonardo of their craft. Robert Shaplen’s Introduction to Kreuger Genius And Swindler by John Kenneth Galbraith, (Alfred A. Knopf Inc. New York; 1960, p.x) Ivar himself admitted to some extent that not all was above board when he said, I’ve built my enterprise on the firmest ground that can be found – the foolishness of people. Kreuger Genius And Swindler by Robert Shaplen (Alfred A. Knopf Inc. New York; 1960, p.128) Perhaps Andrew Beattie best: Ivar Kreuger is still a bit of an enigma in history. At times it seemed that he was a solid, if ruthless, businessman, and at other times he appeared every inch a scam artist. Between those times, he either built a match monopoly that overreached or orchestrated one of the biggest pyramid schemes in history.

books.google.ca/books?hl=en&lr=&id=nn0G1wT8cagC&oi=fnd&pg=PR10&dq=related:bexGr3avgIsJ:scholar.google.com/&ots=KdIOMYm6Tu&sig=147GGhtVx7ieJfp68pXjr5wS0oU#v=onepage&q&f=false However, while paying high dividends was definitely one of the attractions of Kreuger’s companies, paying dividends to his investors did not come exclusively from new investors, which is the case in Ponzi schemes.

Balance sheets and Profit and Loss statements served one major purpose, if not the only one, for Ivar and that was they had to be helpful in his fund raising efforts. Often they were just pure fantasy to be revised at will to please investors. He also frequently treated the assets of corporations he controlled as if they were his own. However, things should be seen in the context of the time. IBM, for example, consolidated all its accounts in one named Plant, Property, Equipment, Machines, Patents and Goodwill. American Can doubled its reported net earnings in 1913 by claiming only $1 million of depreciation after having claimed $ 2.5 million the previous year. Many companies set up arbitrary reserves in good times to be used in bad years and few holding companies published consolidated financial statements.