By Frank Leonard
Most North Americans probably do not realize that a century ago Swedish financier Axel Wenner-Gren began to manufacture and sell the famous Electrolux brand that soon included more than their grandparents’ vacuum cleaner. More recognized as a technological feat was the Wenner-Gren creation and operation of demonstration monorail systems at Disneyland and the Seattle World’s Fair. Some readers may recall his blacklisting by the Allies in 1942, purportedly for actions that supported the Nazis, which gave an element of notoriety to the “international mystery man.”
Axel Wenner-Gren, Electrolux founder and owner for many years. Photo: Electrolux
Better known in Sweden, of course, the name of the founder of Electrolux remains on the Wenner-Gren Center skyscraper in Stockholm, which he constructed as the headquarters for his philanthropic activities. But his fame rests as much on an ostentatious display of wealth – the purchase of mansions and yachts where he hosted extravagant galas – which frequently became subjects of examination and envy in supermarket tabloids. When Wenner-Gren died in 1961, some newspapers declared that he was the richest man in Sweden. The New York Times reported that he was a billionaire.
The financier has so far not been the subject of a detailed biography or business history. Only in 1975 did Wenner-Gren begin to emerge from the media shadow when a portion of his business correspondence came to light in the trial of close financial advisor Birger Strid and three other individuals for misappropriation of funds from one of his philanthropic foundations. From this trial emerged a three-part TV documentary and a commentary on some of his business ventures, which remain the best accounts in Swedish of the financier’s activities after Electrolux.
Wenner-Grenland – The Beginnings of a BC Megaproject, 1956-61 – Downtown Victoria Business Association.
But what Wenner-Gren described as his last and greatest venture – the project to develop a huge territory surrounding the Rocky Mountain Trench in northeast British Columbia – has been largely ignored in both Swedish and Canadian accounts. During the mid-1950s, the Social Credit provincial government of British Columbia under the leadership of Premier W.A.C. Bennett looked for new development schemes in the northeast corner of the province to complement the Alcan aluminum and hydro project in the north west. In the fall of 1956 Wenner-Gren took over an ambitious railway development plan for northeast BC that British landscape planner Percy Gray had conceived. With Gray as negotiator, the plan was presented, modified, and accepted by the government as a “memorandum of intention,” a secret preliminary agreement signed on 16 November 1956 which was not inserted into legislation or formally acknowledged by the government. In it, Wenner-Gren undertook to spend five million dollars on development surveys – mineral, forestry, water power – over a territory whose extent and boundaries were not specified, and to build a monorail covering 400 miles (650 km) along the Rocky Mountain Trench to extract the resources he found. In return, the government granted Wenner-Gren priority in developing the resources not yet claimed in this territory, provided he purchased the appropriate licences. Although the arrangement required Wenner-Gren to gamble a significant portion of his declining wealth on resources whose extent and value would be known only upon completion of the surveys, Strid enthused about the “enormous possibilities here” which “we have … for practically nothing.” To oversee the project, Strid immediately incorporated a new entity, the Wenner-Gren BC Development Company, located in Vancouver, whose capitalization was completely in the hands of Wenner-Gren and long-time associate Bernard Gore, with Gore as its head.
The first newspaper reports of the deal three months later prompted curiosity in BC about its principal. When he arrived in Vancouver in March 1957 to discuss details with Bennett, Wenner-Gren’s promenades – his press conferences, inspections, and meetings with dignitaries – became occasions of celebrity that many wished to witness. Initial enthusiasm for the project – headlines that hailed the “billion-dollar deal” and a cartoon that displayed a monorail crossing northernBC – were followed by accusations of a government giveaway to a foreigner of unsavoury reputation, and revelations of some of Wenner-Gren’s investment missteps elsewhere. But the widespread acceptance of a reporter’s humorous name for the unspecified development territory, “Wenner-Grenland,” revealed that the financier had made a mark.
Even though the initial hydro surveyindicated that dams on the Peace River would have a capacity of four million horsepower (three million kilowatts), Wenner-Gren admitted to Strid that the BC project would be “very difficult to finance.” After signing another agreement with the province concerning hydro development, he created a second concern, Peace River Power Development Company (PRP). With a Canadian president and board of directors, it appeared that Swedish control was finally receding. But Wenner-Gren and Gore took more than 85% of the capitalization by issuing stock to themselves at a discount – 33⅓ cents per share rather than par value ($1.00 per share), ostensibly to cover the cost of surveys. In 1960 Strid informed Wenner-Gren of the substantial return that he had secured by selling 500,000 shares at par. A year later Strid predicted that refinancing would make PRP shares increase in value ten times in ten years. But Bennett grew impatient with the lack of progress on construction and nationalized PRP along with BC Electric in August 1961. Wenner-Gren had already sold 3.1 million PRP shares at par value, however, and government compensation for his remaining shares netted a return that led Strid to exult that the organization had received $1.5 million more than the total that had been invested.
The Werner-Gren concession in the Rocky Mountain Trench area. Cartography by Eric Leinberger.
Wenner-Gren’s other ventures were less fortunate, however. The undertaking to construct a monorail had never made any sense, as the estimated cost for such a development line with uncertain traffic prospects exceeded the value of all railways in British Columbia at the time. Wenner-Gren paid for a survey for a conventional railway instead, but its estimated cost was even greater. This did not prevent Bennett and Gore from making blustery speeches at the “opening” in 1960 of the southern terminus of the projected Pacific Northern Railway, which disgruntled railway workers dubbed as “Probably No Railway” because nothing followed. After Wenner-Gren’s death, the survey became the basis for the government’s ill-fated Dease Lake Extension line during the 1960s and 1970s.
Aerial mining surveys by Swedish compatriot Hans Lundberg cost more than the railway surveys but led to little more than grandiose predictions of a “new Klondyke” and the “largest copper mine in the world.” Nevertheless, Wenner-Gren expected that these “mineral discoveries would offer the biggest returns within a reasonable time.” There were prospects for profitable forestry development in the area, but a planned pulp mill could not proceed without licences. Gore expressed his frustration that “we are handicapped by a complete lack of money.”
It is ironic that the single Wenner-Gren venture in BC that turned a profit was the concern that Bennett nationalized. In the final five years of Wenner-Gren’s life, the discouraging results of his ventures in BC largely repeated those of his other investments. The dismal performance did not prevent Strid from declaring in 1961 that BC must be “one of the corner stones of our organization.” Six months before his death, the Swedish financier wrote confidently to Strid in English that he expected more good news from BC. But in a shaky handwritten postscript in Swedish, Wenner-Gren confided that “perhaps we should pull back, even in BC, so that we can finally get off this never-ending treadmill, which really begins to exhaust me.”