AUSTRIA: Ph

The second largest insurance company in Europe ended its existence last week with an announced loss of nearly $80,000,000. Viennese, nervously watching from the sidelines the Ethiopian crisis and the German crisis, suddenly realized that another bomb for the peace of Europe was ticking away at their very feet.

No connection with the U. S. Phoenix Insurance Co. is the equally important Vienna Phoenix Life Insurance Co., known throughout Central Europe as “Phönix-Wien.” Founded in 1882, it established branches throughout the empire, grew prosperous. The break-up of the old Austrian empire did not seem to affect it. Phönix-Wien rode like a duck over the wild inflation of 1923. Less than a year ago Phönix-Wien boasted assets of nearly 750,000,000 schillings ($150,000,000), controlled 15 different companies and had absorbed two-thirds of the insurance companies in Austria.

Middle of March Phönix-Wien’s pudgy little Director Wilhelm Berliner died under mysterious circumstances. Within a few days the small subsidiary Kompassbank failed and the Bourse knew that Phönix-Wien owed at least $50,000,000. When police sought Heinrich Ochsner, director of the Finance Ministry’s section supervising private insurance companies, he blew his brains out.

Press censorship was clamped down on all references to the scandal. Several footless efforts were made to prop up the sagging company. Last week came the end when Phönix-Wien disbanded, three directors were arrested, and from its ashes rose a new insurance company called Austrian Insurance Co. Ltd., capitalized at only $2,000,000. Foreign Phönix policyholders will have to stand their loss. The new company hopes to save Austrian policies with a 5% premium rise, a special tax on other Austrian insurance companies.

Those were the facts. The whispers going the Socialist rounds in Vienna were far more colorful. When the Nazis came to power in Germany one of the most successful methods of gaining popular support for their anti-Semitic campaign was the forced bankruptcy of many large Jewish firms in Germany. Phönix-Wien, apart from its handsome board chairman, General Carl Vaugoin, was almost exclusively Jewish.

A fat, bald little Viennese, Director Wilhelm Berliner loved a sense of power above personal comfort. Since the War he never occupied a permanent apartment. Known and respected in every chancellery in Europe, he spent about 300 nights a year on trains. He never took a sleeping car, and intimates insisted that he never slept at all. He would lock himself in a compartment every night, dictate furiously to his four secretaries. He always stopped at third-rate hotels but insisted on having six rooms, so that one visitor might never know who his other visitors were. German newshawks, if they wanted an interview with Dr. Berliner, had to catch him en route to the railroad station. Somewhere in his numerous locked brief cases Austria’s insurance Napoleon kept a toothbrush and a stiff collar. He had no other baggage.

Neutral observers still believed last week that Dr. Berliner was honestly devoted to the interests of his firm, that he died naturally of a heart attack. While the Socialists ruled Vienna, he lent money to the Socialist Party, then, just to keep a sheet to windward, helped finance the Fascist Heimwehr of Prince von Starhemberg. And he is said to have lent money to the Nazis.