Kreuger ~ The matchstick King.
Part 3: The Edgewater Beach hotel meeting - Fact or fiction?
what about the secret meeting at the Edgewater Beach Hotel in Chicago mentioned
earlier? Tracking down hard evidence is extremely difficult, since those who
reputedly attended would have certainly destroyed any incriminating evidence
very soon afterwards. There is also another complication in that the most-quoted
document seems to have been used by preachers and other ‘gentlemen of the cloth’
in America as an example of the consequences of greed and that our sins will
eventually catch up with us!
What follows is what I surmise happened and the backgrounds of the most likely
conspirators to have attended: At Chicago’s Edgewater Beach Hotel in 1923, a
secret meeting reputedly takes place in Arthur Cutten’s private apartments.
No documentary evidence of the discussion is known of, though undoubtedly Kreuger’s’
financial holding company IMCO in the US, and its links to other subsidiaries
world-wide were involved.
Kreuger had a number of deals going in Eastern Europe, and through it, was able
to convert money trapped out there into more ‘useful’ foreign currencies. IMCO
offered Americans wishing to evade US taxation a way of transferring profits
into investments abroad, via Continental, a Liechtenstein based holding company
which Kreuger had set up. Kreuger's dealings in Eastern Europe and his ability
to convert money into more ‘useful’ currencies to evade taxation and its transfer
across borders must have at some point been on the agenda. The document then
lists the people reputedly involved and how they eventually paid for their participation
in this, and a number of other dubious shenanigans.
Of the 12 individuals cited below, only Arthur Cutten, Richard Whitney, Charles
E Mitchell, Albert Wiggin and Jerome D Greene were definitely known to have
been deeply involved with Kreuger. That however, does not mean to say that the
authors of the Edgewater Beach Hotel document weren’t aware of further information
that proves that the others were involved.
Arthur Cutten, The greatest of the infamous grain speculators; He is
called before the Senate Committee on Banking and Currency which was investigating
the collapse of the stock markets and IMCO's involvement in this. Cutton displays
grave lapses of memory regarding his involvement in either of these, and due
to a lack of evidence, he is not charged. In 1936 Cutten is indicted on a charge
of tax evasion but he dies of a heart attack a few months before the trial in
his apartment at the Edgewater Beach Hotel, aged 66 in 1936.
Richard Whitney Most people in America will have heard of him, but for
those who haven’t, the following will suffice; A remarkable character who was
also a banker, investment advisor, and embezzler. He was born in Beverly, Mass.
His father, George Whitney, was a leading Boston banker, who undoubtedly encouraged
his son to go into the profession. Whitney graduated from Groton and then Harvard,
where he was elected to the prestigious Porcelland Club. He moved to New York
City in 1910 and became a member of the New York Stock Exchange in 1912, at
the age of twenty-three. Soon afterward he was principal broker for J. P. Morgan
and Company, of which his brother, George, was later vice-president. During
WWI, Whitney was a dollar-per-year executive for the Food Administration, headed
by Herbert Hoover, in Washington, D.C.
In the 1920's Whitney became a member of every major club and organization which
a member of the eastern aristocracy should belong. He was also treasurer of
the New York Yacht Club. In 1916 he married a young widow, Gertrude Sheldon
Sands and managed to take over her father's investment business, Cummings and
Markwald, and renamed it Richard Whitney and Company. In 1919 he was elected
to the governing board of the New York Stock Exchange. Whitney epitomized the
"old guard" of the New York Stock Exchange, a group of wealthy and almost autocratic
individuals who acted as if they owned the Exchange.
At the height of the Wall St panic on Oct. 24 1929, he appeared on the floor
of the exchange and placed purchase orders to stem the rush of selling. The
story goes that he appeared on the Wall St floor and placed an order for ten
thousand shares at 205, forty points above the market price. He also placed
orders that day for 15 to 20 other blue-chip stocks totalling $20m, the largest
personal trading episode of the 20th century. Whitney served on virtually every
significant committee of the exchange, including the business conduct committee.
At the time of his efforts in 1929, he was vice-president and acting president.
He served five terms as president of the exchange beginning in 1930. During
this time he was the spokesperson for "the Old Guard," which came under attack
from the newly created Securities and Exchange Commission, part of the 'New
Deal' instigated byFranklin Roosevelt, following the Wall St Crash. He appeared
as a witness at congressional hearings between 1932 and 1935.
When these investigations were made public, it was revealed that Whitney had
borrowed over $30 million from his friends, his family, and the accounts he
was entrusted with. A fair proportion of this money got into Kreuger’s hands.
When he declared bankruptcy, he owed approximately $6.5 million. He was then
charged with misusing funds from his father-in-law's estate, and pleaded guilty
as charged. He served three years and four months of a five-to-ten-year sentence
in Sing-Sing jail, When Whitney was released from prison, he moved to a family-owned
dairy farm in Barnstable, Mass. where he dropped out of public view and eventually
died 3 decades later, at the ripe old age of 86.
Charles E. Mitchell, The head of the National City Bank. He was found
to have had a number of dealings with Ivar Kreuger. He was eventually sacked
and goes through long and tedious proceedings for alleged income-tax evasion,
which result in the passage of the Securities Act of 1933, and Banking Acts
of 1933 and 1935. He dies December 14th, 1955.
Albert Wiggin, the head of the Chase National Bank. It is discovered
that he was deeply involved with Ivar Kreuger and was eventually sacked. The
large pension he had carefully arranged for himself was discovered and revoked.
Jerome D. Greene was an Investment Banker with Lee, Higginson and Co,
he sold on behalf of Kreuger, millions of dollars-worth of securities to US
investors. Greene also invested most of his own money in these deals, and lost
badly. Greene, a Communist, was undoubtedly encouraged via the KGB, to sell
Kreuger & Toll stock so as to also over-extend Swedish Match. Stalin hated Kreuger,
and feared Kreuger would stabilise the fragile European economies during the
20's and 30's, and thereby undermine his efforts to promote Communism. Discredited
in the US, Greene dies in 1959.
Charles Schwab, was President of the world's largest independent steel
company, US Steel and Bethlehem Steel. He died a bankrupt in 1939 living on
borrowed money for the last five years of his life.
Samuel Insull was originally employed by Edison as his private secretary
and later on became President of the world's largest utility company. At one
time, his Utilities holdings were valued at $3 billion whilst his personal fortune
was estimated to be between $75 and $300 million. He fled to Greece where he
lived on a ‘paltry’ $18000 per year until he was returned to the US where he
stood trial on charges of embezzlement, violating US bankruptcy laws and mail
fraud. He was acquitted in some of these trials, but the toll on his health
was considerable. He eventually dies of a heart attack aged 78 on a Paris subway
station, a fugitive from justice, with reputedly only 20 cents in his pocket.
Howard Hopson was a New York utility regulator who managed to buy up the
Associated Gas & Electric Company (AGECO), which was to become one of America’s
largest utility holding companies through a fraudulently run pyramid scheme
which kept him one step ahead of the stockholders and creditors who were chasing
him. Between 1940-1 he is found guilty of defrauding AGECO investors out of
$20m and income tax evasion for which he is sentenced to a total of 7 years
in prison. Through these trials he loses most of his $47m fortune, but one way
or another he evades prison life by managing to convince the authorities that
he is suffering from physical and mental health problems so they send him to
a sanatorium where he eventually dies aged 67 in 1949.
Albert Fall, who was a member of President Warren G Harding’s Cabinet. Here
he held the post of Secretary of the Interior. He was imprisoned for accepting
bribes from private oil interests in relation to the Teapot Dome reserve in
Wyoming and other reserves in California. Eventually he is pardoned from prison
when he became terminally ill, and died at his home in El Paso, Texas. Leon
Frazier, President of the Bank of International Settlements. He eventually commits
Jessie Livermore, is the last one of the possible conspirators and considered
the greatest of all the speculators on the Wall St Stock Market. He is accused
of being one of the speculators who precipitated the Great Crash of 1929, reputedly
making $100m in the process. He eventually commits suicide at the Sherry-Netherland
hotel in New York a week after Thanksgiving in 1940. Harry F. Sinclair is my
last suspect. Called before a congressional committee, regarding his involvement
with Albert Fall in the Teapot Dome scandal. He is eventually jailed for embezzlement.
In 1923, with the Wall Street bubble expanding rapidly, maybe these people sensed
that it was time to cut and run with what they have made and saw Kreuger as
their saviour. These Americans certainly thought they were getting one over
on the little Swede, when is in fact, they were being duped by a far bigger
shyster than all of them put together! It is known that Kreuger had an innate
knack for getting people to think that his ideas were theirs, and therefore
the scenario of him being invited to this gathering, rather than him actually
running it, sounds just like the kind of ploy he would have employed, and adds
further credence to the likelyhood of an event like this actually taking place.
To be continued ...