Kreuger Tangibles

Greedy hands last week itched to grab 3,500 handsome red certificates. Each certificate represented 100 shares of Diamond Match Co. and the crisp paper pile was worth $4,500,000 on the New York Stock Exchange.

Four big banks (National City, Bankers Trust, Union Trust of Pittsburgh, Continental Illinois of Chicago) insisted the certificates were theirs, given to them as collateral by Ivar Kreuger when he could not pay a $3,800,000 loan. They would have sold the certificates long ago had not Irving Trust, now trustee for bankrupt International Match, insisted that the shares were the company's, not the banks'. The basis for this contention was that the banks knew of Ivar Kreuger's financial troubles when they accepted the stock as collateral, hence were treated as preferred creditors without reason. Court battles loomed.

The red certificates were not stricken International Match's only assets last week. The match & lighter monopoly in Turkey was definitely established and the trustees felt fairly certain that eventually Turkey will repay its loan from International plus interest--a matter of some $14,500,000. In Turkey, International's subsidiary match factory was reported to be in full blast last week with every expectation of continuing. Praise of Turkey's fairness was read into the record. But from all the other listed assets of International nothing tangible had arisen last week although investigators were reading thousands of telegrams, prowling into vaults.

The affairs of Kreuger & Toll, the holding company, were just as bad last week. Bankers throughout the world read with envy that Mahler's Bank of Amsterdam had broken all its relations with Ivar Kreuger in 1929, suddenly suspicious at his haste in seeking loans, the number of companies he controlled, the big profits he reported. In Manhattan the protective committee, headed by Bainbridge Colby and with Samuel Untermeyer as counsel, passed a resolution asking the Swedish authorities to demand a cash settlement from Kreuger's U. S. bankers before a re-organization of either Kreuger & Toll or International Match. The committee continued to hint it would sue the U. S. bankers for misrepresentation, ask them to rescind the sale of Kreuger & Toll bonds. In Stockholm bullish Swedes who hoped Swedish Match was still sound were dismayed last week when the company was granted a three-month moratorium. But they chuckled at an example of Ivar Kreuger's shrewdness which auditors stumbled upon in his private office. On the desk was a concealed button which could be pressed by "accidentally" moving a book with his elbow. It caused a dummy telephone to ring. Herr Kreuger could then ask his visitor to leave or could impress him with imaginary conversations with great bankers and statesmen.

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