Evening star., 1932-03-14
H|NDENBURG VOTE
AVERTS NEW PANIC
Distracts Public Attention
From Kreuger Collapse
and Suicide.
BY CONSTANTINE BROWN.

Paul Won Hindenburg, the octoge-
marian President of Germany, has saved
Europe from a panic similar to the one
which occurred last Summer and re-
suited In the Hoover moratorium. Hin
denburg's overwhelming vote at the
polls yesterday has completely over
shadowed the consequences of the
spectacular dificuIties Of the Kreuger
companies which eliminated in the
suicide of Ivar Kreuger. head of that
important concern.
According to Washington diplomats
who have been in close touch with the
financial developments In Europe in the
last few weeks and who had seen and
talked to Kreuger only three weeks ago
when the Swedish financial magnate
visited Washington. the effects OF the
maIts suicide might have been similar
to the panic created by the failure Of
the Austrian Kredit Anstalt which
brought an almost chaotic situation In
Europe last year.
Difficulties Discounted.
1t is true that well informed finan-
which were facing the many compa nies
and enterprises organized by Kreuger
in the last seven years. 1t was gen.
orally known by the bankers and finan-
ciers that Kreuger had spread too
much that the depreciation of the
currency in many of the countries
where he had either organized his vari-
Gus industrial concerns or to whom he
had lent substantial sums of money,
would make 1t very difficult for the
Swedish financier TO meet his obliga-
tions
He tried to obtain credits In the
United States, but the bankers, while
admitting the soundness of his enter
prizes and the steadiness of the leader,
were loath to part with the many mil
lions Kreuger needed in order to meet
his obligations, and refused him the
required loans.
All this was known in high banking
circles, but was not to the rank and file
of the investors, who had been induced
to believe during the last few years in
the solidity of the Kreuger enterprises
whose bonds and stocks were considered
as the only remaining gilt-edge securi-
ties IN Europe. They were IN many cases
preferred to certain government bonds
Consequently II was feared the effect
of the suicide Of Kreuger would cause
a run on most Of the European banks
Distraets Public Mind.
Fortunately, however, the tremendous
vote Hindenburg obtained ct the polls
has distracted public attention in Ger
many and France, two most important
eepters OF Europe. In both countries
the Hindenhurg success is interpreted
as complete victory OF the stable
Democratic elements in Germany over
the extreme Nationalist and Communist
factions. Both in France and Germany
public opinion was so intensely interest
ed in the results Of the German presi-
Dental elections that the tragedy of the
Kreuger enterprises was overlooked.
In financial circles the results Of the
investigation of all the Kreuger busi-
nesses is awaited with anxiety. 1t is
fairly well known what his commit
mentS were, but nobody knows exactly
what he had on the right side OF the
ledger
Kreuger is the fourth financier in
Europe whose meteoric career ended In
disaster. The first one to rise speetac-
ularly and then break down under the
stress of the political difficulties OF Eu-
1Cpc Was GIlG 1Ctdth4I I1N6o NtAAhaC9;
who at one time was considered worth
about $25O,00O, 900. He died broken
hearted
A finaneier, whose spectacular career
ended in an alleged suicide, was Alfred
Loewenstein, the Belgian hnancief;
HAIRY, minor English financial
light, went bankrupt to the extent of
$50 600, 900, and Is serving o l5-year
term in an English prison. The last
and the most substantial one, KreuEer,
committed suicide Saturday when, on
his return from the United States, ne
realized all the credit sources which
might have saved him and his institu-
tiens were closed to him.
Kfeuger was not a speculatof, nor an
unserupulous fnaneier. He was Pfae-
tieal and steady and combined his imam
cial ideas with sound political ideals.
Sought Peace In Europe.
During the conversations he has had
in Washington with President Hoover
and other important officials he ex-
pounded the theory that Europe could
be reorganised on peaceful basis by
the formation of a network of closely
tnterrelated industrial and financial or
ganizations In every country. He want
CA W CiC w Vic EulOpCdu atdVCo Ii
knot so they should be interested In the
financial and economic progress of their
neighbors. He loaned European coun-
tries, such as Poland and Rumania, sub
stantial sums in exchange for certain
menopolies, like matches and tele-
phanes. Starting with smaller nations,
he wanted to work up his scheme TO
more important states, 30 that in the
END they would be more interested In
the economic welfare of Europe than
in political misunderstanding. HIS
scheme seemed more workable than
that OF the late French foreign secre-
taFy. Aristide BRAND, because the lat
ter planned TO organize Europe on o
pacific basis by customs union, for
which Europe Is not prepared as yet.
Kreuger wanted to work less spec
tacularly, but more efficiently; he
wanted the European states to grad
ually feel their interests In the eco
hemie field were closely related TO each
other. He worked alone. Being oitizen