ABSTRACT
Ivar Kreuger earned the nickname “Savior of Europe” by lending European governments nearly $400 million after World War I to rebuild their shattered economies. Greece used its $5 million loan to repatriate refugees from Turkey and Macedonia. Latvia and Estonia used Kreuger’s money to build railroads and purchase seed grain. Poland was able to aid flood victims. Kreuger’s $75 million loan to France helped stabilize the country’s currency. A grateful French Parliament awarded Kreuger the Grand Cross of the Legion of Honor, the country’s highest civilian medal. During the late 1920s, Kreuger was even mentioned as a candidate for the Nobel Peace Prize. Ivar Kreuger’s fortune was not built on oil, steel, shipping, or minerals. He
made his money selling matches for one-half penny per box. During the early part of the twentieth century, when people still cooked with wood or gas and before the invention of the pocket lighter, the world’s population consumed 40 billion boxes of matches per year. Kreuger’s 250 factories produced 80 percent of those matches. His business was built on the philosophy “It doesn’t matter what you make. Just so you make lots of them. And you control every one.”2 Ironically, Kreuger never carried matches himself, citing a “petty superstition” to anyone bold enough to inquire the reason. After Kreuger’s death in 1932, $115 million of purported assets could not be
located. Kreuger had attracted investors by paying dividends as high as 20 percent annually. Although his match factories earned millions of dollars of legitimate profits, they did not earn enough to sustain such generous payouts. Kreuger’s plan to dominate the world match market had deteriorated into an enormous “Ponzi” scheme. Dividends had been paid out of capital, and the company relied on subsequent loans and stock issuances to repay initial investors.
