Arendal crash

Last updated June 28, 2019

The Arendal crash (Arendalskrakket) was an economic crisis in Arendal, Norway, that occurred when the bank Arendals Privatbank went bankrupt in 1886 and the bank's co-owner Axel Nicolai Herlofson was revealed to have defrauded customers and co-owners systemically. The crash led to several other bankruptcies and unemployment in Southern Norway, and marked the end of Arendal as an important shipping town. It took over 80 years to overcome the effects of the crash.^[1]^[2] Herlofson was sentenced to six years penal labour.

Arendal is a municipality in the county of Aust-Agder in southeastern Norway. Arendal belongs to the region of Sørlandet. The administrative centre of the municipality is the city of Arendal. Some of the notable villages in Arendal include Rykene, Eydehavn, Færvik, Strengereid, Kongshavn, Kilsund, Brattekleiv, Longum, Saltrød, Staubø, Vrengen, and Kolbjørnsvik. The offices of UNEP/GRID-Arendal are also located in the city of Arendal.

Norway, officially the Kingdom of Norway, is a Nordic country in Northern Europe whose territory comprises the western and northernmost portion of the Scandinavian Peninsula; the remote island of Jan Mayen and the archipelago of Svalbard are also part of the Kingdom of Norway. The Antarctic Peter I Island and the sub-Antarctic Bouvet Island are dependent territories and thus not considered part of the kingdom. Norway also lays claim to a section of Antarctica known as Queen Maud Land.

Axel Nicolai Herlofson was a Norwegian fraudster who is known for causing the Arendal crash, after defrauding customers and co-owners of Arendals Privatbank which he had co-founded in 1874. His scheme had some similarities to a Ponzi scheme, and he had systemically falsified the bank's accounts for several years to cover up being insolvent. In 1886 the bank went bankrupt, and an investigation of Herlofson was initiated. He attempted to flee the country, but was arrested in the last minute and sentenced to six years imprisonment with hard labour, which he served in Norway's strictest prison at Akershus Fortress. He died in Christiania.

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References

↑ Arendals Tidende - Arendals mørke historie Archived April 17, 2012, at the Wayback Machine
↑ "Da alt raknet for sørlendingene", Aftenposten Amagasinet, 12 July 2013 (feature on Axel Nicolai Herlofson and the Arendal crash)

Literature

Johannes G. Torstveit: Storsvindel bankkrakk og nytt politisk parti 1886-88, Arendal 1886-1888, Arendals Tidende, 2012
Axel Smith: Av en ældre Arendalsmands erindringer fra de sidste 50 aar (1870–1920). I Arendal fra fortid til nutid. Utgitt ved byens 200-års jubileum som kjøpestad 7. mai 1923

Arendals Tidende is a local newspaper published in Arendal two days a week, on Mondays and Fridays. On Mondays Arendals Tidende is issued as an ordinary newspaper, and on Fridays it is issued in glossy magazine format.

Axel Christian Smith was a Norwegian priest and topographer.

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[1] Arendals Tidende - Arendals mørke historie Archived April 17, 2012, at the Wayback Machine

[2] "Da alt raknet for sørlendingene", Aftenposten Amagasinet, 12 July 2013 (feature on Axel Nicolai Herlofson and the Arendal crash)

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