Ivar Kreuger

Early life

Kreuger was born in Kalmar, the eldest son of Ernst August Kreuger, an industrialist in the match industry in that city, and his wife Jenny Emelie Kreuger (née Forssman). He had five siblings.

At school, Ivar skipped ahead two classes by taking private lessons. At age 16, he began studies at the Royal Institute of Technology in Stockholm, from which he graduated with combined master's degrees covering both the faculties of mechanical and civil engineering, at the age of 20.

Early years in the United States

After the start of the 20th century, Kreuger spent seven years traveling and working abroad as an engineer in the US, Mexico, South Africa and other countries, but spent most of the time in the US. In South Africa, he ran a restaurant for a short time together with his friend Anders Jordahl, but they soon sold the restaurant. At an early stage, he came in contact with the patented

Kahn System for concrete-steel constructions that was exploited by Julius Kahn's Trussed Concrete Steel Company, when working for different engineering companies, among them The Consolidated Engineering & Construction Co. and Purdy & Henderson in New York. This new technique had not been introduced in Sweden at that time. In 1907, he managed to get the representative rights for the system for both the Swedish and the German markets, and at the end of 1907, he returned to Sweden with the goal of introducing the new methods in both countries at the same time. At that time, one of the experts in Sweden in concrete-steel constructions was his cousin Henrik Kreüger working at KTH in Stockholm.

Match business

In 1911 and 1912, the Kreuger family match factories in Kalmar, Fredriksdal and Mönsterås, run by his father Ernst Kreuger, uncle Fredrik Kreuger and his brother Torsten Kreuger, encountered financial problems. Kreuger was then advised by his banker Oscar Rydbeck to turn the factories into a stock corporation in order to raise more capital. This was the starting point for the reformation of the Swedish match industry as well as the major match companies in Norway and Finland. The goal was to get control of the entire match industry in Scandinavia.

With the family match factories as the base, Kreuger first founded the Swedish corporation AB Kalmar-Mönsterås Tändsticksfabrik in 1912. His father, Ernst, and uncle Fredrik, became the major shareholders and his brother Torsten was appointed the general manager. Ivar became a member of the board.

A merger between this company with several other small match companies in Sweden, the company AB Svenska Förenade Tändsticksfabriker was founded in 1913 with Ivar Kreuger as the general manager. Later, by merging with the largest match company in Sweden, AB Jönköping-Vulcan, Svenska Tändsticks AB (Swedish Match) was founded in 1917. Ivar had originally tried to convince AB Jönköping-Vulcan to merge in December 1912, but they had not been interested as Vulcan was the dominating match company in Sweden. Ivar then started to acquire all of the match companies as well as most of the raw material companies he could find in and around Sweden and then finally got AB Jönköping-Vulcan to accept the merger. He had been so persuasive in arguing for the merger that he managed to overvalue his side of the deal so that it was essentially the smaller organization taking over the larger one. It was his first big venture in inflating values, which became his prime tactic thereafter.

One of the main designers behind this operation, besides Ivar, was his banker Rydbeck. The total number of shares in the new company was 450,000. Ivar Kreuger personally owned 223,000 shares and his new holding company, Kreuger & Toll Holding AB, 60,000.

This company group now covered the entire match industry in Sweden, including all the major companies that manufactured the production machines used in the factories. The total number of employees working in match production in Sweden in 1917 was around 9000. It also had control over major companies supplying the raw material for the match industry. During this time Kreuger also acquired the largest match manufacturing companies in Norway (Bryn and Halden) and in Finland (Wiborgs and Kekkola).

However, Kreuger not only "acquired" companies but also introduced a new way of thinking in the Swedish match industry with large scale production facilities as well as ideas to increase efficiency in production, administration, distribution, and marketing.

He managed to unite the Swedish match industry as well as the major match companies in Norway and Finland. With this new company structure the match industry in Scandinavia became a major competitor to large manufacturers elsewhere. Ivar's methods resembled those John D. Rockefeller used in the formation of the Standard Oil Trust transforming dozens of struggling factories into a strong and profitable monopoly. The methods had become illegal in the USA because of anti-trust laws, but were not against the law in Sweden at the time.

A German chemist had invented phosphorus matches in 1832 but they were dangerous because the yellow phosphorus used was poisonous and because it was in the match head and thus could easily light by accident. The Swedes improved on the design by using a safer red phosphorus, which they put on the striking surface of the matchbox. They called them "safety matches". They made Sweden the leading exporter of matches and made matches the most important Swedish export.

It should be remembered that in the early part of the 20th century matches were a necessity for smoking and the lighting of stoves and gas appliances among other uses, and therefore demand for them was highly inelastic, meaning that a monopolist could raise prices (and hence profits) significantly without much affecting the quantity sold.

By expanding the Swedish Match company through acquisition of government-created monopolies, the Swedish company became the world's largest match manufacturer. Kreuger set up an affiliate to Kreuger & Toll AB in the United States, and together with Lee, Higginson & Co. in New York, formed the International Match Corporation. This group eventually came to control almost 75% of the world production in matches.

Ivar Kreuger never married, but lived for many years in different periods with Ingeborg Eberth (née Hässler), a physical therapist from Stockholm, who first met him there in 1913. According to the book she wrote after Kreuger's death in 1932, he was not interested in marriage or children and was very much focused on his business. She broke off their relationship in 1917 and moved to Denmark, where she married a Danish engineer named Eberth. They had a daughter in 1919, Grete Eberth (later to be an actress in Stockholm, married name Mac Laury). After some years she divorced Eberth and moved back to Stockholm with her daughter, reuniting with Kreuger. Mr. Eberth once kidnapped the daughter in Stockholm and brought her back to Denmark. Shortly thereafter Ingeborg, without notifying the authorities or police, went down to Denmark and brought the daughter back to Sweden by hiring a private fishing boat in Denmark that took them over Öresund to Sweden. The new period with Kreuger lasted until around 1928; after that they just met occasionally. The last time they met was in November 1931, just before Kreuger started on his final trip to America. Eberth received the news about his death in Paris on 12 March 1932, from newspaper headlines the day after.

Kreuger had private apartments in Stockholm, New York, Paris, and Warsaw, and a country place used during the summer season on the private island Ängsholmen in the archipelago of Stockholm. On business tours in Europe, he preferred to meet his business associates in Paris and then stayed in his flat at 5, Av. Victor Emanuel III (today named Avenue Franklin-D.-Roosevelt). He owned several specially designed motor yachts, among them Elsa built in 1906, Loris (1913), Tärnan (1925), and the most famous, Svalan (Swallow), built at Lidingö in 1928, a 37 ft, 4.9 ton motor yacht, equipped with a V12, 31.9 liter Hispano-Suiza engine from the US company Wright, with 650 HP output, capable of more than 50 knots (≈ 57 mph). A replica of the boat has been built.

He had a large private library in both his apartments in Stockholm and New York and quite a large art collection. The paintings were sold at different auctions held in September 1932, as all of Kreuger's private assets were incorporated into the bankruptcy. The collection in Stockholm comprised 88 original paintings, among them 19 by Anders Zorn and a great number of Dutch masters. The New York collection included paintings by Rembrandt and Anthony van Dyck.

Kreuger became the major shareholder when the Swedish film company AB Svensk Filmindustri (SF) was founded in 1919 and because of that, sometimes met celebrities from the film industry. In June 1924, Mary Pickford and Douglas Fairbanks were invited by SF to Stockholm and were guided around the Stockholm archipelago in Kreuger's motor yacht Loris. A five-minute film sequence of this occasion is stored in SF's film archive. Pickford, Fairbanks, Kreuger, Charles Magnusson (the manager for SF), Greta Garbo and various SF employees appear in the film.

While his family believed Ivar Kreuger to have been murdered, it was only more than 30 years after his death that many previously classified Kreuger & Toll documents and Ivar Kreuger documents were made public. Based on these and his insight in his brother's business and life, Ivar's brother Torsten Kreuger wrote a book in 1963 (2nd edition) called Kreuger & Toll, describing how Kreuger & Toll had been taken over, and how then the other Kreuger companies were taken over too. In 1965, Torsten Kreuger published Sanningen om Ivar Kreuger (published in English as: "Ivar Kreuger: The Truth at Last") arguing that his brother Ivar had been murdered. Recently, more books have been written saying more documents have re-appeared or were finally released to public scrutiny, and supporting Torsten Kreuger's assertions that his brother was murdered: Därför mördades Ivar Kreuger ('The Reason for the Murder of Ivar Kreuger') (ISBN 91-7055-019-0) (1990), and Kreuger-Mordet: En utredning med nya fakta ('The Kreuger Murder: An Investigation with New Facts') (ISBN 91-630-9780-X) (2000).