The Gun Shop on the Avenue
Three hundred meters. That was the distance between the front door of his apartment building at 5 Avenue Victor-Emmanuel III and the entrance to Gastinne-Renette, the Parisian gun shop whose windows displayed dueling pistols hung in pairs and English rifles polished to a military gleam. Ivar Kreuger had walked past those windows hundreds of times — turning left out of the building, past the former Poiret boutique where rich American women lingered on the curb, toward the Rond Point where the avenue met the rolling traffic of the Champs-Élysées. He had always been in a car. There had always been a car. On the evening of March 11, 1932, for the first time in anyone's memory, the man the Economist would compare to a hero of Aeschylean tragedy walked.
The clerk received him in the lighted shop. "Monsieur desires...?" An automatic, a revolver — it makes no difference which. The 6.35mm Browning was too small. The 7.65? "Non, plus gros! Plus gros!" Bigger. Bigger. He settled on a 9mm, paid, and walked back into the gathering dusk carrying the weapon that, by the following noon, would be lodged in his chest.
He had returned to Paris that week from New York, where, for the first time in a decade, he had failed to raise money. The pallid face was whiter than usual, drawn. His doctor told him his heart was weak. That much was medically accurate. Everything else about his condition — the state of his companies, the solvency of his empire, the provenance of $140 million in Italian government bonds sitting in his safe — was a lie of such structural complexity that even now, nearly a century later, forensic accountants cannot agree on exactly where the truth stopped and the fiction began.
What is known: on the morning of Saturday, March 12, 1932, Ivar Kreuger rose, dressed, wrote three letters, undid his waistcoat, lay down on his bed, and put the bullet through his heart. He was fifty-two years old. He controlled three-quarters of the world's match production, owned factories in forty-three countries, had lent more than $300 million to sovereign governments on four continents, and had extracted approximately $650 million from investors — a sum whose real equivalent today approaches something like $15 billion. Within weeks, Price, Waterhouse & Co. would declare his assets "greatly in excess of the items they purported to represent, entirely fictitious, or a duplication of assets." He had credited his companies with more than a quarter of a billion dollars in imaginary earnings. He had forged the Italian bonds with his own hand.
John Maynard Keynes called him "maybe the greatest financial intelligence of his time." John Kenneth Galbraith, less charitably, called him "the Leonardo of scammers." Both were correct. This is the essential paradox of Ivar Kreuger — not that genius and fraud coexisted, but that they were, in his case, indistinguishable. The same faculties that allowed him to structure a genuinely innovative global monopoly also allowed him to falsify its books with preternatural calm. The same charm that seduced bankers on two continents also seduced their auditors. The line between visionary financial engineering and criminal deception ran straight through the center of the man, and he walked it with a steadiness that unnerved even those who admired him most.
By the Numbers
The Kreuger Empire at Its Peak
~$650MTotal capital raised (1917–1932), mostly from US investors
250+Match factories in 43 countries
75%Share of global match production controlled
$300M+Loans to sovereign governments in exchange for monopolies
$250M+Imaginary earnings credited to his companies
$140MIn forged Italian government bonds
400+Subsidiary companies in the Kreuger web
Kalmar, or the Manufacture of Silence
The Kreugers had been established in the Baltic port town of Kalmar since 1710, when a German journeyman baker named Johann Kröger set up shop and settled down. For two generations the family struggled. Then it produced Peter Edvard Kreuger, who married the richest girl in town — Amelia von Sydow, whose long face and prominent cheekbones, so different from the squarish lines of typically Scandinavian features, would reappear in Ivar — and built a shipping empire, a paper mill, and, critically, a match factory. When Peter Edvard died, the match plant passed to his third son, Ernst, who married Jennie Forssman, whose family tree included pioneers in the Transvaal, a man who went insane, and a suicide.
Ivar was the third child and the first son, born on March 2, 1880. "He never cried about anything," his mother recalled. "He ate regularly and took care of himself and was just an angel." The angelic quality was deceptive. It masked a precocity that family lore inflated but that documented evidence still renders remarkable: by five, the boy could reportedly recite a sermon verbatim, then recite it backward. By seven, he could add, subtract, multiply, and divide. He had cool gray eyes — "appraising" was the word everyone reached for — that belonged to a much older person, eyes that seemed to take in everything and give back nothing. His classmates called him "the quiet one." The nickname stuck for life.
He was shy and frail. The rugged outdoor games of his Nordic contemporaries repelled him, and he wandered instead through the woods collecting wildflowers — a passion he would retain long after he had lost the capacity for romantic love, or any other recognizable human attachment. Painting, music, the opera — all left him indifferent. But flowers never did. And the first thing he ever stole was an envelope of pressed flowers belonging to a grammar-school classmate.
The stealing is noted here because it was noted, exhaustively, after his death, when every known episode of his life was analyzed for telltale signs of criminality. His critics found ample evidence. He cheated at school — not more than his classmates, but better. "His principle was to follow the line of least resistance," one schoolmate recalled, "and to achieve the maximum results with the minimum of effort." He could go months without reading, then crib his way through examinations undetected. Others who tried the same thing got caught. Kreuger never did. At the Royal Technical University in Stockholm, where he enrolled at sixteen — three years ahead of the average graduate — the pattern intensified. Assigned to construct a drawbridge model from blueprints, he did nothing until the deadline loomed, then approached the most diligent students and persuaded each, successively, to let him copy one required part. He glued the collection of duplicates together. The instructor pronounced his model the best of the lot.
"The students who let him copy their work appeared to be almost proud of having helped him win out over them," a classmate observed. Here was the embryonic form of what would become his most lethal talent: the ability to make people feel honored by their own exploitation.
The New World, in Steerage
Early in August 1900, Kreuger arrived in New York from Sweden, having made a steerage crossing in a small boat for approximately thirty dollars. He was twenty but looked sixteen. He had less than a hundred dollars. For several days he walked the hot city, displaying his diplomas at construction firms and getting nowhere. He attributed his failure to his youthful appearance and wrote to his parents in Kalmar that he would gladly exchange his professional qualifications for a beard.
His letters home from this period are revealing — not for what they confess but for what they notice. Chicago, where he went next and rented a room for two dollars a week from a "clean Dutch family," struck him as rural, unremarkable. But New York:
"It is an unusual, beautiful city, much more metropolitan than Chicago.... In all the restaurants, at all the tables, there are four fans driven by electricity, which make it quite cool. When in New York, I visited the stock market. There was real liveliness. I have seldom seen people look so absorbed in what they were doing."
The stock market. Twenty years old, broke, sleeping in a rooming house — and what rivets him is the trading floor. The image of those absorbed faces would pull at him for the next thirty-two years, drawing him back across the Atlantic again and again until the market that fascinated him destroyed him.
In Chicago he took a job selling lots to European immigrants for a real-estate firm that hired immigrants as salesmen. His first day, a Swede in the office asked what he'd done "on the other side" that he was running away from. The question amused him. For six weeks he didn't make a sale. He later claimed — with the embellishing instinct that made every autobiographical anecdote both illustrative and unreliable — that he was reduced to begging on the streets and picking food from garbage pails. (He also claimed to be simultaneously paying for a surveying course, which complicates the portrait of destitution.) When he finally sold a lot, earning fifty dollars, weeks passed before the next. He quit.
What followed was a peripatetic blur. Lineman for the Illinois Central Railroad. Colorado, hoping for mine work. New Orleans, where he "had a little money now" and where, by his own account, he rescued a seven-year-old girl who had fallen from a Mississippi excursion boat, earning a medal inscribed "Only a hero will give his life for others." The medal existed — he kept it on his desk for decades, enjoying the ritual of having visitors coax him into the story — but no name was inscribed on it, and the exploit has never been independently verified. Then Veracruz, building bridges with a fifteen-man team, thirteen of whom died of yellow fever. Kreuger contracted the disease himself, dragged himself to New York to convalesce, developed severe conjunctivitis, became convinced he was going blind, and wrote to the Norwegian girl he had fallen in love with at university that he could no longer think of marrying her. In the spring of 1901, shattered and barely twenty-one, he went home.
The Heart Murmur and the Refusal
Sweden in 1901 was not the humming, prosperous center of industry it would become. After America, it struck the young man as somnolent, prosaic. Stockholm was a tranquil capital where business was conducted along artisan lines. Kalmar was worse — provincial, deadening. His conjunctivitis cleared up. His strength returned. But the Norwegian girl — the physical therapist he had courted at the university — had changed her mind and refused him.
This was, by every account, one of the major emotional events of his life. He would have mistresses in the future — many, some said — but never again would he fall romantically in love. Something closed. The rejection fused with his already pronounced reserve to produce a man of almost clinical detachment, capable of extraordinary social performance but incapable of, or at any rate uninterested in, genuine intimacy. Friends would later describe his warmth as real but strategic, his kindness as authentic but instrumental, his confidences as seemingly full but actually empty. He was, as one associate put it, "always there and never there."
The Swedish military examined him and found a heart murmur. He was discharged from conscription. By the end of 1901, mustached now and with slightly more money, he sailed back to New York, where the mustache — or perhaps the extra year of worldliness — helped him land a job at fifty cents an hour with Purdy & Henderson, steel-construction consultants on West Fourteenth Street.
There is plenty of room in this country. The people are hard but they give one a chance. At home everyone talks about his love affairs, but here people discuss their business prospects. That suits me. I can breathe here.
Purdy & Henderson was closely associated with the Fuller Construction Company, builders of the nation's earliest skyscrapers, and the connection gave Kreuger a peripheral but eager role in the genesis of the Flatiron Building, the Metropolitan Life Tower, Macy's, the Plaza and St. Regis Hotels. More importantly, the job was a listening post. In his off hours, he read biographies of Daniel Drew,
Jay Gould, Commodore Vanderbilt, and studied Rockefeller's triumphant battle to monopolize oil. He regarded "knowing somebody" as the prerequisite to getting ahead, and he went to bold extremes. One morning, having read that a wealthy local industrialist had died, Kreuger forged a letter of introduction from his own father — "Your old friend, Ernst Kreuger" — called at the home of the deceased, feigned surprise at the death, offered condolences, and handed the letter to a son. Nothing came of it directly. It was simply good practice.
Johannesburg, and the Limits of Grief
Among the engineers at Purdy & Henderson was a young Norwegian named Anders Jordahl — loyal, competent, unimaginative, destined to become the nearest thing to a confidant Kreuger ever had and one of the most uncomprehending of his associates. Jordahl was the archetype of a Kreuger relationship: useful, grateful, sincere in his devotion, and perpetually uninformed. When an English firm offered to send Kreuger to London for the Carlton Hotel project in Johannesburg, he wasn't interested — but he recommended Jordahl, who went off brimming with gratitude, apparently incurring a lifelong obligation. Jordahl would later serve as Kreuger's chief personal representative in the United States. His top salary was twelve thousand dollars a year.
By 1903, Kreuger had joined Jordahl in Johannesburg, supervising the installation of steel parts for the Carlton. He grew bored quickly. The two opened a restaurant near the center of town — Kreuger putting up fifteen hundred dollars, Jordahl three hundred — and Kreuger soon bought out his partner. He still talked about the Norwegian girl. He told Jordahl they were engaged, which was no longer true if it had ever been. One afternoon, Jordahl returned to their shared room and found Kreuger weeping on his bed, an open letter beside him. "My girl is dead," he said.
After that, Jordahl recorded, Kreuger "was very downcast and mournful for a long time." Then he speculated in gold and made a quick seventy-five hundred dollars, joined the Transvaal militia, took up hunting, and in the summer of 1904 abruptly said goodbye to Jordahl, the restaurant (which had been making only a small profit), and Johannesburg itself. What followed was a year of aimless wandering: the east coast of Africa, India, Paris, London — where, his substance exhausted, he took an ignominious job selling cutlery and safety razors — then Toronto, then Philadelphia, where he opened another restaurant that folded rapidly. The floundering lasted until 1906, when he returned to New York and was hired by the Consolidated Engineering and Construction Company, which promoted him with startling speed to manager and vice-president and sent him to supervise the building of Archbold Stadium at Syracuse University. (In 1930, Syracuse would award him an honorary Doctor of Business Administration, a distinction that would cause its bestowers more pain than perhaps any honorary degree in American academic history.)
At Syracuse, Kreuger encountered reinforced concrete — a novelty controlled by Julius Kahn of Detroit's Trussed Concrete Steel Company. Kahn suggested Kreuger introduce the technology to Sweden. The proposition ignited something. Kreuger quit Consolidated and sailed home, writing to his parents in a letter calculated both to announce his plans and to soften his father for a loan: he had had his fill of "making money for second-rate people."
The Tarpaulins and the Floodlights
On May 18, 1908, Kreuger entered into a partnership with Paul Toll — a Swedish engineer two years his junior, less visionary, more grounded — to exploit reinforced concrete in Swedish construction. Kreuger put up twenty-five hundred dollars, extracted from his father. Toll put up nothing.
Paul Toll was the necessary counterweight: a man of methodical competence who wanted to build buildings, not empires. He would eventually run the construction side of the business — solidly, without drama, without headlines — while his partner did whatever his partner wanted. The asymmetry was there from the beginning. It was structural. And it was permanent.
Their first contract was a three-thousand-dollar job providing reinforced-concrete beams for a small-town electric-power plant. Their second was a twelve-thousand-five-hundred-dollar viaduct. Before the end of 1908, they had the contract for Stockholm's first "skyscraper" — a six-story department store that still stands. The terms were exacting: premiums for early completion, penalties for delay. Kreuger intended to collect the premiums.
What he did next was, in its way, the first act of his public career, and it contained in miniature everything that would follow — the audacity, the technical competence, the willingness to impose his will on physical reality, and the instinct for preempting obstacles. He rigged heavy tarpaulins against the Swedish winter cold. He installed heating facilities. He brought in floodlights — radical ideas in Sweden — and kept the concrete operation running twenty-four hours a day. When sleepless neighbors complained to the police, Kreuger was ready: he had secured a certificate from an eminent building authority stating that once begun, it would be folly to interrupt the pouring of concrete in cold weather. The police officer concurred. A Stockholm paper grumbled that "if this American method of building catches on, Stockholmers will never have a quiet night again." The skeleton was finished in two months. The premium was seventy-five thousand dollars.
Within three or four years, Kreuger & Toll was the foremost building concern in Sweden. Among its notable projects: the Stockholm Olympic Stadium for the 1912 Games, the NK department store, Stockholm City Hall — where, in a detail that almost beggars irony, the Nobel Prize ceremonies are held.
The World Match Monopoly
In 1911, Kreuger & Toll incorporated with a quarter of a million dollars in capital under a charter that included a provision Kreuger had drafted himself: "the company may, in connection with its affairs, acquire shares in other concerns as investments." With that single clause, he walked out on the engineering profession forever. From that moment, he handled the firm's business operations exclusively, and the clause became the legal foundation for everything that followed.
The match business came to him through family, geography, and the particular economics of a small country with a big invention. Sweden was the birthplace of the modern safety match — invented in 1844 by Gustaf Eric Pasch, a professor at the Royal Academy of Science in Stockholm — and possessed large stands of aspen, whose wood was ideal for manufacture. A boom-and-bust cycle in the late nineteenth century had produced, by 1903, one dominant survivor — Jönköping & Vulcan Match Factories — and roughly a dozen small independents, among them the Kreuger family's plant in Kalmar.
In 1911, a new law allowed Swedish banks to invest in industry for the first time. Kreuger asked a young banker named Oscar Rydbeck — who would become his principal banker, his friend, and one of his most spectacular dupes — whether the family's match business might benefit. Rydbeck proposed issuing stock, using shares as collateral for a bank loan, and using the loan to buy the other independents. Kreuger deliberated for more than a year. On March 18, 1913, he announced the formation of United Swedish Match Factories, Inc. — known as the Kalmar
Trust — consolidating ten firms under his personal direction. It was capitalized at a million dollars. Jönköping & Vulcan had three times as much backing.
He had absolute confidence in his ability to achieve a monopoly, and he was equally sure that he would then be able to repay his huge debt with handsome profits all around.
The confidence was justified — or at least, for a time, it appeared to be. Kreuger moved with a speed and cunning that compensated for inferior capital. He bought one of the only two Swedish manufacturers of matchmaking machines. (His brother Torsten owned the other — a convenient arrangement.) He traveled to London to recruit his uncle Fredrik Kreuger, who headed a British match-sales agency and didn't want to join forces; Kreuger got the old man drunk enough to sign. When the First World War disrupted raw-material imports, he began manufacturing his own potash and phosphorus. When the war cut off Jönköping & Vulcan's Far Eastern trade routes, he filled the vacuum. The Kalmar Trust lost seven thousand dollars in its first year, cleared sixty thousand in its second, and by its third was earning two hundred thousand and paying a twelve-percent dividend.
At the close of 1917, operating "almost singlehanded," Kreuger negotiated the merger that created the Swedish Match Company — a $35 million trust combining his Kalmar operation with Jönköping & Vulcan. He managed to place such a high value on his own stock that the smaller company, in effect, swallowed the larger. He emerged as head of Swedish Match, immediately transferred 120,000 shares — slightly more than a quarter of the total — to Kreuger & Toll, and credited Swedish Match with $2 million for them. The transfer marked the beginning of a relationship so complex that it was, by design, "virtually impossible for anyone but Kreuger himself to know for sure just how much of Swedish Match was owned by Kreuger & Toll, or vice versa, at any given time."
From this base, he launched an international campaign that consumed the next decade. After the armistice, he expanded into England, recaptured Asian markets, dumped matches in Germany and Russia. Because the German mark was worthless and money couldn't be extracted, he used proceeds to buy real estate in Hamburg, Danzig, and Berlin. He conducted negotiations in what he called necessary secrecy, recruiting a network of agents — "a dozen or more men, nearly all of them unacquainted with each other, who were not outstandingly bright and some of whom were definitely on the seedy side" — to acquire factories on his behalf. Swedish banks advanced him $20 million in credit. With this underground syndicate, he took control of match production in England, Belgium, Switzerland, Holland, Austria, Norway, Finland, Denmark, Hungary, Czechoslovakia, and Yugoslavia.
Then he evolved the model that made him famous. Starting in the mid-1920s, Kreuger began lending money to cash-strapped governments — many of them reeling from war debts, unable to borrow in international capital markets — in exchange for legal monopolies on match production within their borders. The governments would tax matches or earn royalties; the revenues would service the Kreuger loan. It was elegant. It was original. And it appeared to align the interests of lender and borrower in a way that traditional sovereign lending did not. Among the nations with which he struck such deals: Ecuador, Peru, Poland, Greece, Hungary, Yugoslavia, Romania, France, and Germany. By 1929, Swedish Match controlled more than half the world's match production.
The money to fund these loans came overwhelmingly from American investors. In the winter of 1919–20, Kreuger established American Kreuger & Toll, a New York holding company capitalized with $6 million in Swedish Match stock, and began the systematic extraction of capital from the American public that would continue until the end. The pitch was simple and, in its first iteration, legitimate: by investing in Swedish Match, Americans could earn profits from a monopoly abroad. The venerable Wall Street firm of Lee, Higginson & Co. — old Boston money, impeccable reputation — became his American agent in 1923. Percy Rockefeller, nephew of John D., sat on his board. Rockefeller gushed to fellow directors: "He is on the most intimate terms with the heads of European Governments. Gentlemen, we are fortunate indeed to be associated with Ivar Kreuger."
The Poetic Approach to Annual Reports
Kreuger's essential philosophy of accounting — if it can be called a philosophy — was that a balance sheet was simply a canvas on which to paint a picture in the brightest possible colors. His approach to annual reports was, in a word that his contemporaries actually used, "almost poetic": the function of figures was not to reproduce a situation as it existed but to set forth his vision of an ideal world. If he had any realistic theory at all, it was one of continuing organic growth. Neither events nor cycles should retard progress. Mounting profits — whether they really existed or not — accompanied by ever-soaring dividends — even if they came out of capital — were necessary to keep the customers happy and the credit coming.
Consider a single example. In 1919, Swedish Match reported an impressive increase in profits, and the dividend rate was raised from twelve to fourteen percent. The profit increase, however, was based largely on the value of assets acquired in Germany, where the mark was hopelessly inflated. Kreuger, in preparing his annual statement, had merely calculated how much these assets would amount to in kronor if the marks could be converted under what he defined for himself as "normal conditions." That same year, Kreuger & Toll paid a stupendous twenty-five-percent dividend on profits that had risen, on paper, from a little over $1 million to not quite $1.75 million. In his annual statement, Kreuger listed two-thirds of these profits as derived from "various transactions." For him, even that was moderately explicit.
This was the method, and it scaled. When bankers tried to pin him down, he protested that a secret cannot be kept if it is known to more than one man. He kept no notes. He left no IOUs in the petty-cash drawer. He moved money between companies with the fluidity of a man rearranging furniture in his own apartment, because, in a fundamental sense, that is what he was doing — the companies were all his, the distinctions between them were fictions maintained for the benefit of outsiders, and the outsiders' job was to supply capital, not to understand.
By 1921, a few perceptive Swedish financial leaders had begun to feel the first twinges of actual suspicion. A government banking inspector looked into Swedish Match's claim of having doubled its prewar export business and reported, in a confidential memorandum, that the company had exaggerated the gain by fully fifty percent. Jacob Wallenberg, then a young officer and later head of the powerful Enskilda Bank, gained access to the memorandum. "We discovered exactly what Kreuger owed several banks in Sweden," Wallenberg recalled decades later. "His position was very definitely not what a careful banker would call a sound one."
Sound or not, Kreuger's biggest years still lay ahead. He was still to extract a quarter of a billion dollars from the eager and credulous American public.
Two Lives
By the early 1920s, Kreuger was definitively leading a double existence. One was public: the emerging business titan, worldly, considerate, deferential to his elders — letting banker Rydbeck introduce him in London as "the coming man in Sweden." He appeared on the cover of Time on October 28, 1929 — the day before the crash, an exquisite piece of timing that no novelist would dare invent. He was friends with Greta Garbo and an advisor to President Hoover. He played a role in the Nobel Prize ceremonies. He promised dividends of fifteen to thirty percent in an era when such returns seemed merely ambitious rather than mathematically impossible. The stocks and bonds of Kreuger companies became the most widely held securities in the United States and the world.
The other life was compounded of secret schemes and secret forms of release. Late in 1917, he took a tremendous plunge in the dollar market — the dollar was then worth only 2.34 kronor — borrowing heavily in kronor to buy dollars. By 1920, the dollar had soared to 5.7 kronor, and he converted back. The maneuver netted the equivalent of $2 to $3 million. He speculated compulsively, especially toward the end, plunging wildly in Wall Street in a futile attempt to trade his way out of disaster. He maintained mistresses across multiple cities. He was vulnerable to blackmailers — extremely so, the investigators would discover — and paid them lavishly. He bribed public officials in countries where he sold, or hoped to sell, matches. He moved money through more than four hundred subsidiary companies, many of them shells, creating a labyrinth so intricate that even the fifty-seven reports Price, Waterhouse would eventually produce — the biggest postmortem of its kind ever made — could not trace all of it.
The dividends, of course, were the engine. To attract new capital, he had to pay spectacular returns. To pay spectacular returns, he dipped into old capital, concealing this by falsifying his books. The structure was, in its essentials, a pyramid: new money paying returns to old money, dressed up in the language of industrial monopoly and international statesmanship. It was not identical to a Ponzi scheme — real assets existed, real monopolies produced real revenue, real matches were struck and burned in forty-three countries — but the profits those assets generated could never support the edifice of promises Kreuger had built on top of them.
The gap between reality and representation widened year by year. By the mid-1920s, Kreuger had begun to supplement his accounting fictions with outright forgery. The most spectacular instance: $140 million in counterfeit Italian government bonds and notes, the signature of Italy's Minister of Finance reproduced by Kreuger's own hand. He also faked phone calls to prime ministers and presidents to prove to board members how powerful he was — lifting a telephone, speaking fluently in the relevant language, hanging up with a casual "Mussolini sends his regards." Whether the calls were real or staged, the effect was the same: everyone believed.
The Frozen World
The Wall Street crash of October 1929 did not immediately destroy Kreuger. His stocks held up better than most. He completed a $125 million deal with Germany at the end of that year, and for a time his reputation as a safe harbor amid chaos actually attracted capital. But the sustained contraction that followed — what would become the Great Depression — slowly drained the oxygen from his system. Capital markets froze. Investors stopped buying. Banks stopped lending. The spread between the six to eight percent interest he earned on sovereign loans and the fifteen to thirty percent dividends he paid out became unsustainable even by the standards of creative accounting.
He attempted to sell his stake in Ericsson, the Swedish telephone company he had acquired in 1930, to its American competitor International Telephone and Telegraph Corporation for $11 million. ITT's auditors discovered that Ericsson's balance sheet had been padded with fake assets. The deal was canceled. ITT demanded repayment. There was no money.
The Swedish Central Bank refused to lend him more. Swedish authorities demanded a thorough review of his position. He knew what the review would find.
In early March 1932, he sailed to New York one last time, seeking loans for his labyrinth of companies. He failed. He returned to Paris. His face was whiter than usual, and drawn. He had called a meeting for Saturday noon — his companies' executives, international bankers — to discuss the financial position. On Friday, his doctor warned him about his heart.
Saturday morning he arose, dressed, wrote three letters. And while his associates and bankers grew impatient at his tardiness in a room elsewhere in the city, he went to his bedroom, lay down, and fired the 9mm Browning he had purchased three hundred meters from his front door.
The Unraveling
The Paris police withheld the news until after the world's stock markets had closed for the weekend. When it reached Sweden, it caused something akin to panic. In London, a "high Swedish authority" received a reporter from the Times with a sad face. "Poor Kreuger," he said. "Creditors were closing in on him."
The immediate public reaction was grief, not suspicion. The New Statesman described him as "a very Puritan of finance." The London Times declared that "least of all does personal suspicion light upon him." The Economist — the same publication that would later recant with a ferocity proportional to its earlier credulity — wrote that he was "a man of great constructive intelligence and wide vision who planned boldly, yet on a basis which seemed to be protected by carefully devised safeguards." Keynes praised him. The world mourned a titan felled by depression.
Three and a half weeks later, on April 6, Price, Waterhouse issued its first statement.
Then the Italian bonds were revealed as forgeries. Then the fifty-seven reports began. Then Lee, Higginson — the distinguished Boston firm that had sold Kreuger securities to the American public since 1923 — admitted it had been the victim of "flagrant misrepresentations" and acknowledged that "gross frauds have been perpetrated by Mr. Kreuger." Lee, Higginson would not survive the scandal. It was absorbed by other firms. A pillar of Brahmin finance, undone by a match salesman from Kalmar.
The Swedish committee investigating his construction firm concluded that its 1930 balance sheet "grossly misrepresented the true financial position of the company." Investigators estimated the total loss at $2 billion — more than Sweden's national debt. Kreuger's father, Ernst, eighty years old, was served with a writ charging "gross negligence" for letting his son do with the company whatever he liked. Kreuger's brother Torsten — who had flown to Paris and secured custody of the body without an autopsy being performed — was arrested and sued for more than $1 million in cash and securities allegedly transferred by Ivar shortly before the crash. The body was shipped to Sweden in a sealed coffin and privately cremated. No public viewing. No autopsy. The absence of these things would fuel conspiracy theories for decades — including the claim, advanced by Torsten himself thirty-three years later, that Ivar had been murdered.
What Survived
The congressional investigation of Kreuger's companies led directly to the Securities Act of 1933 and the Securities Exchange Act of 1934 — the foundational legislation governing American capital markets to this day. The generally accepted accounting principles that structure modern financial reporting were developed, in significant part, as a response to the Kreuger scandal. His innovations in off-balance-sheet financing, shell companies in tax havens, and complex derivative-like instruments are the direct ancestors of the structures that would surface again at Enron, at Lehman Brothers, at FTX. His invention of Class B shares — a dual-class stock structure that separated voting rights from economic ownership — remains in use by technology companies from Google to Meta.
Swedish Match itself survived, remarkably. The company reorganized, shed the fraudulent accretions, and continued operating as a legitimate match manufacturer. It still exists today as a subsidiary of Philip Morris International, employing over 7,500 people, producing snus and nicotine pouches under brands like ZYN. The factories Kreuger built still run. The monopolies he negotiated eventually expired, but the industrial infrastructure he created proved durable enough to outlast both the scandal and the man.
His mother, informed of the death, asked for only one possession: the medal — "Only a hero will give his life for others" — that sat on his desk, the one with no name inscribed on it, from the rescue that may or may not have happened on a Mississippi excursion boat in the last year of the nineteenth century.
The Envelope of Pressed Flowers
After the suicide, a peculiar detail surfaced. Svelte Mrs. Ingeborg Eberth, who described herself as Kreuger's nearest and dearest friend, announced in Stockholm that she had received a letter in his handwriting — "neither stamped nor postmarked" — three weeks after his death. "I believe it came from Russia," she said. "It contained only a few lines of greeting. I believe Ivar is alive!" She had been planning to write his life story; "the life story of the man about whom I know more than anyone else." The announcement may have been a publicity stunt. But thousands of small investors continued to hope that the great man had faked his death. That a sealed coffin and a private cremation meant something. That a brain so capable of deception could surely have deceived death itself.
They were wrong, of course. The deception had limits. It always does. The story of Ivar Kreuger is, finally, the story of what happens when the gap between representation and reality grows so wide that only one event can close it. He had spent his life painting canvases in the brightest possible colors — balance sheets, annual reports, telephone calls to prime ministers, the performance of wealth, the performance of genius, the performance of confidence. Everything in life, he once said, is founded on confidence. The 9mm Browning was the first honest statement he had made in years.
In Kalmar, in the museum dedicated to the Swedish match industry, a photograph shows a boy with cool gray eyes, frail, unsmiling, holding nothing. In the woods outside town, the wildflowers he collected as a child still grow in the same stands of aspen whose wood built his empire. The flowers bloom. The matches are struck. The aspen is indifferent to both.
