19. April 2021

Can a Swedish Billion Kronor Credit to the Soviet Union explain Staffan Söderblom's disastrous meeting with Stalin?

By Peter Axelsson

 

June 15, 1946 - Meeting between the Swedish Ambassador Staffan Söderblom and Joseph Stalin

On the evening of June 15, 1946, the gates of the Kremlin open. The Swedish Ambassador Staffan Söderblom has been granted a rare audience with the Soviet leader Joseph Stalin. The meeting has been initiated by Söderblom. The short conversation focuses on one topic only - the missing Swedish diplomat Raoul Wallenberg who had disappeared in Hungary a year and a half earlier. Söderblom suggests to Stalin that Wallenberg is probably dead, and requests an official confirmation that he cannot be found in the Soviet Union.

Nothing could be more wrong. Raoul Wallenberg is alive and imprisoned near the Kremlin. In fact, a short time before his meeting with Stalin,  a high-level Soviet official had indicated to him that Wallenberg may be alive and found. So why did Söderblom ask for a meeting with Stalin only to speculate that Raoul Wallenberg was dead?

Just a few days after Söderblom's discussion with the Soviet leader the Swedish government announces plans for a billion Swedish kronor (SEK)[1] trade credit to the Soviet Union. Swedish officials have reason to believe that the massive credit will be unpopular with the Swedish public. This article investigates whether Staffan Söderblom’s meeting with and statements to Stalin about Raoul Wallenberg in June 1946 were connected with the plans for a large Swedish-Soviet trade ad credit agreement, and if so how.

 

In 1934, in a newspaper column, the influential Swedish banker and businessman Marcus Wallenberg Sr. publicly criticizes the Swedish government’s plans to provide the Soviet Union with a 100 million SEK trade credit. (Which at the time corresponded to approximately 25 million USD, or 500 million USD in today’s value.) Wallenberg sees several disadvantages with the intended credit. The risk is too high. The interest rate is too low. Sweden puts its financial policy at risk. "In my view," Wallenberg concludes, "the [Swedish] state should not enter into this deal, even if satisfactory interest terms could be secured."[2]

March 1934 - Marcus Wallenberg Sr. expresses his concerns about the planned credit to the Soviet Union

Wallenberg’s comments are not well-received among supporters of the proposed trade and credit agreement. The Soviet Ambassador to Sweden, Alexandra Kollontay, has worked tirelessly to make the credit a reality. The work has been so stressful that Kollontay writes in her diary: ”I see nothing of life. The loan obscures everything."[3] Expectations in the Kremlin have also been high, so much so that earlier the same year Kollontay met with the Soviet leader Joseph Stalin to speak in favor of the Swedish credit.[4]

But now, in March 1934, more and more critical voices in Sweden are being raised against granting the Soviet Union the intended loans. And after Wallenberg's public criticism, the prospects of a deal are all but non-existent. Kollontay writes in her diary: "The slander started in earnest after the shameless article by Marcus Wallenberg, Sweden's  'uncrowned finance king'. And it was certainly a rude article! […] An unbelievably rude article."[5]

Realizing that the credit is doomed to fail, the Soviet leadership attempts to save face by withdrawing from the negotiations with the Swedish side.[6] But, naturally, Kollontay is devastated. After signing the letter in which the Soviet government informs Sweden that it has no longer any interest in a Swedish credit, she declares: "I feel as if I had killed my own child, I have worked for a whole year to prepare this agreement."[7] And, of course, the Kremlin knows which Swedish actor has played a major part in wrecking the credit arrangement - the Wallenberg family.[8]

The backlash against the proposed credit to the Soviet Union also brings its main Swedish proponent, the Social Democratic minority government, to the brink of collapse. At the end of April 1934, the Swedish newspaper Aftonbladet's headline reads: "The conservatives [Högern] demand a vote of no confidence against the Socialist government - Harsh charges in the discussion today - The Russian loan in limbo." It is mainly Sweden's Minister of Finance Ernst Wigforss who is viewed as responsible for the debacle. Another Swedish newspaper writes: "The reaction against the Russian agreement is unexpectedly strong. The presentation of the proposal was a mistake. It is surprising that such skillful tacticians as the Social Democratic politicians have not understood this. It was reported that the Prime Minister and Foreign Minister, Mr. [Per Albin] Hansson and Mr. [Rickard] Sandler, had strong concerns, but that Mr. [Ernst] Wigforss had been an ardent supporter of the credit proposal and succeeded in influencing other members of government to give their support.”[9]

Discussions about a new credit

April 1934 - Serious criticism is leveled against the Socialist government about the Soviet credit

Ten years pass. We move to the autumn of 1944, when a new credit  between Sweden and the Soviet Union is under discussion.[10]

Much is the same. Alexandra Kollontay, the Soviet Ambassador to Sweden, and Ernst Wigforss, Sweden's Minister of Finance, are once again in charge of the negotiations on the Soviet and Swedish side, respectively.[11] However, the size of the credit being discussed has increased tenfold – to one billion SEK. Even if there is consensus about the size of the loan, the precise terms of the credit still need to be discussed between the two parties. The Soviet leaders, naturally, want to pay the lowest possible interest rate and prefer  a long repayment period over a short one. The Kremlin is also eager to avoid terms conditioning Swedish loan payments on the delivery of Soviet goods to Sweden.[12] Furthermore, the Soviet leadership is only interested in an official Swedish state credit.[13]

The Swedish industry, including companies in the Wallenberg family’s sphere of influence, has a different view. There are concerns over state credits being issued, which could strengthen the government’s influence over Swedish businesses. One of the Swedish companies with negative experiences of state credits is Wallenberg-controlled ASEA, a leading Swedish engineering company. In the autumn of 1944, its CEO Thorsten Ericson speaks out to emphasize the importance of "keeping the state away from #lending [...]."[14]

Thus, conditions for conflict are rife, in particular when considering why the negotiations in 1934 failed to result in an agreement - meaning the strong opposition by Marcus Wallenberg Sr.  In fact, for some time Soviet intelligence agencies have been gathering information about the Wallenberg family.[15] Also, in 1944, Alexandra Kollontay is said to have reported to the Kremlin that Raoul Wallenberg- a family member with no direct involvement in its business operations - was heading to Budapest, Hungary, on a special humanitarian mission.[16]

A few months later, in early 1945, the Red Army takes control of Budapest and Soviet officers encounter Wallenberg in the city. By all accounts, the atmosphere at this first meeting is rather positive, as the two parties have a common enemy in Nazism. But just days later, an order arrives from Moscow. The order bears the signature of Soviet Deputy Defense Minister Nikolai Bulganin, but most likely the order was issued by Stalin himself.[17] The order reads: "Raoul Wallenberg, found on Benczúr-street in the eastern part of Budapest, is to be detained and taken to Moscow. […]."[18]

January 1945 - The Soviet order to detain Raoul Wallenberg and to take him to Moscow

The question that arises is why Stalin ordered Raoul Wallenberg’s arrest and transport to Moscow. Since Wallenberg’s detention coincided with the sensitive Swedish-Soviet credit negotiations discussed above – is it possible that Raoul Wallenberg was detained by the Soviets as a means to put pressure on the Swedish side in the negotiations?[19]

The theory that Stalin may have arrested Raoul Wallenberg in order to use the young Swede as a hostage has been expressed more frequently in recent years. For example, Vadim Birstein, a leading expert on the history of the Soviet State Security Services, said in an interview in 2016: "My personal belief is that Stalin wanted to use Raoul Wallenberg as a ‘bargaining chip’ in negotiating a loan or other economic issues."[20]

There are other circumstances that support this proposition. Already in his youth, Stalin used kidnappings and ransom payments to raise funds for the Bolshevik Party.[21] The use of kidnappings continued throughout Stalin’s life, including in his role as General Secretary of the Communist Party. According to the historian Robert Conquest, Stalin viewed the imprisonment of relatives as a tool to enforce loyalty. Conquest writes: "There is no doubt that threats to the family – the use, that is, of hostages for good behavior - was one of the most powerful of all Stalin's safeguards."[22]

Stalin as a young man

The fact that Raoul Wallenberg was barely interrogated during his imprisonment in Moscow also seems to indicate that he was detained to be used mainly as a bargaining chip, and not as a source of information. Although the Soviet MGB officers make allegations of espionage in the few interrogations of Wallenberg, they seem to be noticeably uninterested in the secret information he is likely to possess if he had links to any type of intelligence services. During Raoul Wallenberg’s first four months in captivity, he is only interrogated twice. By comparison, as the author Bengt Jangfeldt points out, Wallenberg's cellmate Gustav Richter was interrogated no less than 21 times during the corresponding period, sometimes up to three times a day.[23] Raoul Wallenberg's fellow inmates later confirm that the Soviet interrogators’ interest in the Swede's alleged espionage activities seems to have been limited.[24]

By contrast, during one of the few interrogations of Raoul Wallenberg, the Soviet interrogators emphasized  his ties to the Wallenberg family. As Gustav Richter recounts: “During the time [spring 1945] Wallenberg spent with me in the Lubyanka Prison, he was only interrogated once. Among other things, the officer who conducted the interrogation, told him: “You are known to us. You belong to a big capitalist family in Sweden."[25]

As follows from the above, there are circumstances suggesting that Stalin imprisoned Raoul Wallenberg with the intention of exerting pressure on the Swedish government and the Wallenberg family in some form, possibly to secure the coveted Swedish state credits.

Different opinions about the Soviet Union

If Stalin's aim was to secure massive Swedish financing on favorable terms, why was Raoul Wallenberg not released when that financing eventually was successfully obtained? Sadly, the answer to that question seems to be found not only in the Kremlin but also in Sweden.

By the autumn of 1945, Raoul Wallenberg has been missing for over six months. His parents, i.e. his mother Maj and his stepfather Fredrik von Dardel, are naturally extremely worried. Information received shortly after Wallenberg’s disappearance has placed him in the Soviet Union, or at least under Soviet protection. Therefore, at a meeting with Sweden's new Foreign Minister Östen Undén, Raoul Wallenberg’s parents request that the Swedish government raise the matter directly with Soviet officials. The meeting ends in disappointment for the von Dardels as Undén rejects their request.[26]

Instead, during the autumn of 1945, steps are taken to realize Sweden's billion SEK credit to the Soviet Union. As the credit issue resurfaces, Foreign Minister Undén, who is a close friend of Finance Minister Ernst Wigforss, gives a speech in the Swedish city of Örebro. [27]  Undén presents a positive image of the Soviet Union and expresses a desire for increased trade with the Eastern Bloc.[28]  He notes that Sweden has the ability to grant relatively large credits to the Soviet Union in order to achieve increased trade.[29]

October 1945 - Speech by Östen Undén in Örebro in which he presents a positive image of the Soviet Union

However, shortly after, at the start of 1946, it becomes increasingly difficult to pursue a Soviet-friendly policy for those Swedish politicians who wish to do so. In particular, the Swedish public's view of the Soviet Union deteriorates significantly following Sweden’s forcible repatriation of nationals from the Baltic states, an event which remains controversial to this day. The Swedish government complies with the Soviet demand to extradite around 150 Baltic soldiers who fled to Sweden at the end of World War II, but these plans meet strong resistance from a cross-section of Swedish society, including the Swedish military, the Church of Sweden and the Swedish Red Cross. Even King Gustaf V intervenes against the extradition. But these efforts are to no avail. The government decides to comply with the Kremlin's demands and horrible scenes take place in January 1946 when the extradition order is enforced. A Latvian soldier ends up taking his own life. In light of these events and the resulting public criticism against his government, Prime Minister Per Albin Hansson becomes so depressed in the spring of 1946 that he fears being scorned by members of the public on his daily commute to work.[30] Foreign Minister Undén receives police protection due to various threats against his person.[31]

Autumn 1945 - The plans of the Swedish government to forcibly repatriate Baltic refugees to the Soviet Union leads to massive protests in Sweden

 Despite the protests against the extradition of Baltic refugees to the Soviet Union, the negotiations for a comprehensive credit and trade agreement with the Soviet Union commence shortly thereafter. Foreign Minister Undén writes in his diary on 2 April 1946: ”Telegram from Moscow concerning Russian interest in resuming trade negotiations. 'The political prerequisites exist.' I have thus been right in my view that a good relationship with the Soviet Union can be established."[32]

Things are now moving ahead at a fast pace. Ingemar Hägglöf, a Foreign Ministry official who is taking part in the secret credit negotiations, writes: ”And so the machinery was set in motion - a huge apparatus […] The lights burned until late at night."[33] However, after the much criticized repatriation of the Baltic nationals, public support for a huge credit to the Soviet Union cannot be expected. Nor is there support for a Soviet credit in the Swedish business community. Originally, the main argument in favor of granting a credit to the Soviet Union was to secure productivity in Sweden during the expected post-war recession. However, by the spring of 1946 Sweden's industry is already booming and concerns about an impending recession have disappeared. In fact, Swedish companies are instead struggling with labor shortages to fulfill incoming orders.[34]

Still, the Swedish government seems determined to push through the Russian loan despite changed circumstances. Gunnar Hägglöf, a high-level Swedish Foreign Ministry official, makes the following observation: "When I was first briefed on the course of the Swedish-Russian negotiations in May 1946, the economic development had taken a completely different direction than previously expected. One could wonder if we should not have informed the Russians that Sweden could not undertake such significant credits as previously discussed. […] However, the government reacted very strongly against such proposals."[35]

New information about Raoul Wallenberg?

The credit negotiations between Sweden and the Soviet Union continue during the spring 1946. At the end of April 1946, the media is able to publish leaked information about the discussions. On April 26, the Swedish newspaper Dagens Nyheter reveals that the loan amount is extensive, even though the paper incorrectly cites an amount half of its actual size, i.e. 500 million SEK: "The [credit amount] seems to be large in comparison with other estimates on other occasions."[36]

April 26, 1946 - New information about the granting of an extensive credit to the Soviet Union

Three days later, on April 29, Undén meets with the Soviet envoy Ilya Chernyshev. They discuss the credit agreement, and Undén writes in his diary: "[Chernyshev] also commented on the trade agreement negotiations and emphasized the importance of a positive result. I sincerely hope for that."[37]

Unexpectedly, the Wallenberg case is suddenly revived in the midst of all these events. The Swedish Foreign Ministry had requested envoy Staffan Söderblom to ask the Soviet authorities about the names of the three Soviet officers who were said to have escorted Wallenberg away from Budapest.[38] Therefore, on April 30, Söderblom meets with Alexander Abramov, the head of the Scandinavian department at the Soviet Ministry of Foreign Affairs (MID). Söderblom and Abramov begin their meeting by discussing the credit agreement. Abramov informs Söderblom that the Kremlin wishes to conduct the forthcoming credit negotiations in Moscow. Söderblom promises to check if a Swedish delegation can come to Moscow as early as "in 2-3 weeks".[39] After discussing the planned credit, Söderblom raises the Wallenberg case. The conversation apparently takes an unexpected turn when Abramov suddenly seems to indicate to Söderblom that Raoul Wallenberg may be alive. After the meeting, Söderblom writes the following note for Undén: "[Abramov’s information] could be interpreted as an indication that Wallenberg is alive after all and has been identified in a camp or something similar."[40]

Thus, a potentially delicate situation now arises for the Swedish officials who are in the process of realizing the hoped for credit and trade agreement. On April 26, Dagens Nyheter publishes information about a planned Russian credit. Three days later, on April 29, Undén has a meeting with Chernyshev in which both express support for the agreement. And then, just one day later - on April 30 - Alexander Abramov suddenly appears to indicate that Raoul Wallenberg may be alive.

A few days later, Söderblom travels back to Sweden from Moscow.  On his agenda is a meeting with Östen Undén. No one knows what Undén and Söderblom discuss when they meet on May 5.[41] The fact that Söderblom, at Undén’s request, will soon leave Moscow and move to another position within the Foreign Ministry is almost certainly one topic. But given the previous week’s events, it can reasonably be assumed that Undén and Söderblom also discuss the following two, potentially irreconcilable, issues: the Swedish government’s ambition, without apparent public or business support, to push through a credit of 1 billion SEK to the Soviet Union, while simultaneously pressuring the Soviet government to clarify the recent and encouraging information about Raoul Wallenberg’s disappearance and whereabouts.

A Swedish request to meet Stalin

Two weeks later, in mid-May 1946, the Swedish government approves the plans to give the Soviet Union a loan of 1 billion SEK. The government discussion, which concerns one of Sweden's most important trade agreements, takes less than one hour.[42]

Staffan Söderblom returns to Moscow a few weeks later. As Söderblom is about to leave his position in Moscow, he meets with the Soviet Foreign Minister Vyacheslav Molotov for a farewell audience. As expected, the credit negotiations are discussed during the meeting.[43] But Söderblom also makes a bold, and unique, request to meet Stalin.[44]

Simultaneously, an official Swedish delegation has arrived in Moscow to negotiate and finalize the terms of the credit.[45] Söderblom introduces the members of the delegation to the Soviet Minister of Trade Anastas Mikoyan. The negotiations start immediately thereafter.[46] Already within a week or so there is a draft agreement in place and information about the negotiations is now beginning to leak to the Swedish press. For example, on June 8, the headline of Svenska Dagbladet reads: "Good hope for a Swedish-Russian trade agreement".[47] Shortly after, Dagens Nyheter reports on the progress of the negotiations with a headline suggesting that the trade agreement is expected to be concluded soon.[48]

April 26, 1946 - New information about the granting of an extensive credit to the Soviet Union

It should be noted that at this time there is still a lack of information about the most sensitive part of the agreement, namely that the Swedish government intends to offer the Soviet Union a billion SEK credit.[49] For example, Dagens Nyheter reports on June 11: "About the details of the negotiations and the scope of the future agreement, credits, etc. one can still say nothing."[50]

A few days later, on the evening of June 15, Söderblom's car rolls into the Kremlin. Stalin personally receives the Swedish Ambassador.  After an exchange of courtesies, Stalin wonders if Söderblom has "any requests?" Söderblom, who had asked for the meeting, informs Stalin that there are no particular issues to be discussed. However, after making this statement, Söderblom mentions one topic he would like to talk to Stalin about. The topic relates to the missing Swedish diplomat Raoul Wallenberg: "As I just said, I have no particular subject to raise with you. But since you have asked the question, I would like to mention one thing."

Söderblom then describes to Stalin the Swedish humanitarian rescue operation in Budapest and Raoul Wallenberg's important role in this operation. "Was his name Wallenberg?" Stalin asks, noting the Swede’s name on a piece of paper. Söderblom confirms the name. And soon the crucial part of the conversation about Raoul Wallenberg begins – a conversation which, at times, has been compared to a death sentence:[51] [Stalin]: "You do know that we gave orders that the Swedes should be protected." [Söderblom]: "Yes, and I am personally convinced that Wallenberg fell victim to an accident or to robbers." [Stalin]: "Have you not received any notice on the matter from us?" [Söderblom]: "No. I consider it probable that the Soviet military authorities have no information on the further fate of Wallenberg. […] However, I would like to receive an official statement that all possible measures have been taken to search for him, although, sadly, they have so far been unsuccessful, and an assurance that we will receive further information, if anything is learned about Wallenberg's fate." […] [Stalin]: "I promise you that the matter will be looked into and solved."[52]

The conversation lasts just five minutes. According to the Kremlin's schedule Stalin had initially set aside one hour for the meeting with Söderblom.[53] Hence, it appears that Söderblom's main purpose to meet with Stalin was to present a theory about what had happened to Raoul Wallenberg, and to obtain an official assurance from the Kremlin that the Soviets had made fruitless attempts to locate the Swedish diplomat. Söderblom makes this request despite the fact that shortly before he had received indications from the top-level of the Soviet Ministry of Foreign Affairs that Raoul Wallenberg was alive. Just two days after the meeting with Stalin, on June 17, the Swedish newspaper Expressen manages to obtain confirmed information about the Swedish government’s plan for a Soviet credit.

What influence did the credit agreement have on the Raoul Wallenberg case?

June 17, 1946 Expressen receives confirmation of the billion kronor credit

The hypothesis that the Swedish government’s strong desire to grant the Soviet Union a massive credit had a negative impact on the attempts to save Raoul Wallenberg is not entirely new. Recently, Bengt Jangfeldt refers to the credit agreement in his book from 2012 and asks the following question: "Was [Raoul] sacrificed for the sake of good relations, so that the trade and credit agreement would be secured?"[54] And in the 2015 biography of Peter Wallenberg the credit negotiations are briefly mentioned when Sweden's passive approach towards the Raoul Wallenberg case is questioned: “There was another possible reason why the Swedish establishment so prudently tiptoed around the Soviet contacts immediately after the end of the war. A major trade agreement with the Soviet Union was discussed already during the war by the coalition government."[55]

Since the credit issue has been put forward as a possible explanation of the Swedish government’s much criticized passivity in the Wallenberg case, the question arises why this theory has not been thoroughly investigated. In fact, the theory that economic motives may have influenced Sweden’s official handling of the Wallenberg case was examined in 2003. An analysis of the issue by the so-called Eliasson Commission was published as part of an official inquiry – Statens Offentliga Utredningar (SOU, Public Governmental Inquiry).[56] The Commission presented its findings in a formal report, "A Diplomatic Failure - The Case of Raoul Wallenberg and the Swedish Foreign Service". The report states: "One of the purposes of this investigation is to assess whether the Swedish government allowed the handling of the Raoul Wallenberg case to be affected by economic considerations, in particular in connection with the "Russian credit"."[57]

The Commission concluded that the Swedish government's desire to realize the large Soviet credit and trade agreement cannot explain its cautious actions in the Wallenberg case. The report says: "In connection with the credit agreement, it can be discussed whether the government was so concerned about the agreement that it led to appeasement and passivity. However, this is not likely, since Sweden obviously was the lending party."[58]

The events presented and discussed in this article, however, makes it possible to arrive at a conclusion which differs from the one expressed by the Commission in 2003. There are three main points that may warrant a different position on these issues:

The first point concerns the question of whether the credit agreement was in focus at the time of Söderblom's meeting with Stalin in June 1946. The Commission claims that both parties had relatively limited interest in the credit when the meeting took place in the Kremlin. The report says: "As noted […] interest for the agreement on the Soviet side was not particularly strong until August 1946, when it [in connection with the United States' involvement] was raised to the level of super power politics. […] Nor was the interest on the Swedish side [for the agreement] always at a peak level. The agreement seems to have been most interesting during the first half of 1945, when it was still uncertain whether it would be possible [for Sweden] to resume trade with the West."[59]

However, the Swedish newspaper articles mentioned above show that Sweden's and the Soviet Union's interest in the large credit and trade pact was significant and coincided with Söderblom's request to meet with Stalin. Dagens Nyheter's headline on June 11 for example, only four days prior to the extraordinary meeting between Söderblom and Stalin, reads: “Moscow is soon awaiting an agreement, the situation is set.”

June 11, 1946 - Dagens Nyheter reports about the successful negotiations

The second point concerns the question of whether in the spring of 1946 the planned credit should be regarded as politically motivated rather than economically motivated.  In its official report, the Eliasson Commission claims that at the time of the Kremlin meeting, the credit is still mainly economically motivated. The report states for example: "Until the summer of 1946, there are no signs that the credit agreement is perceived as justified for reasons other than economic."[60] Contrary to what the Commission claims, there are reasons to view the Swedish government’s desire to grant the credit as being mainly politically motivated already in the spring of 1946. At that time, Sweden's industry is already thriving, and the previous fear of a recession has been supplanted by supply chain problems to fulfill incoming orders.[61] For example, in the beginning of May 1946, Erik Boheman, at the time Sweden's Ambassador in Paris, wrote a letter to Rolf Sohlman, the chief negotiator of the Soviet credit agreement. In the letter Boheman emphasizes that the planned arrangement does not appear to be economically wise: "The proportion between exports and imports [in the draft agreement] seems very unfavorable to me, and in the next few years we should have no major difficulty in getting rid of [sell] our [Swedish] goods. […] In order to justify such an agreement, the political benefits must therefore be highly significant. But, is this really the case?  […][62] Also the above-mentioned Gunnar Hägglöf states that in the spring of 1946, the planned credit is motivated chiefly by political reasons, and not by financial arguments. Hägglöf had the chance to discuss the intended credit structure prior to Söderblom’s meeting with Stalin: "When [in May 1946] the issue [the credit] was discussed with members of the government, I soon realized that the whole question of the agreement had a political background."[63]

The third point concerns the question of whether the intended credit was publicly communicated and already had received political support before Staffan Söderblom's meeting with Stalin. The Eliasson Commission report states: "Gunnar Myrdal, Minister of Trade, gave a speech [in May 1946] in the Swedish parliament and each parliamentary party declared support for the negotiations [with the Soviet Union] to begin."[64] This statement creates the impression that, by May 1946, there was explicit political support for the credit negotiations with the Soviet Union. However, the Commission's statement should be supplemented with the following information. Myrdal’s address to the parliament in May 1946 did mention the ambition to expand Swedish trade with the Soviet Union by concluding a trade agreement. However, Myrdal did not mention that the planned trade agreement included a Swedish credit amounting to one billion SEK. Ingemar Hägglöf, who was taking part in the negotiations, describes Myrdal’s speech as follows: "Gunnar Myrdal took […] - it was in May 1946 - the appreciated initiative for a debate concerning the government's trade policy in both chambers of the parliament. He initiated the debate by giving a long exposition. In the exposition he did mention, albeit very briefly, the pending negotiations with the Soviet Union. These involved, he said, "a substantial increase in our trade to the east." But he did not say anything about the credit.”[65] In fact, the government's lack of disclosure regarding the intended credit would later be criticized. For instance, a year later, the Swedish newspaper Dagens Nyheter writes: "The former Minister of Trade [Gunnar] Myrdal admitted […] that the Advisory Council on Foreign Affairs should have been consulted before the Swedish negotiators went [to Moscow] with their [government] directives in May [1946]."[66]

Can Söderblom's meeting with Stalin be explained?

Why is it important to highlight these three points? The 2003 inquiry gives the impression that there was limited interest in the Swedish-Soviet credit agreement at the time of Söderblom’s meeting with Stalin. Moreover, the Commission asserts that, to the extent that the planned credit was relevant in June 1946, it was primarily relevant for financial (not political) reasons. The Commission further alleges that the credit had already received parliamentary support before the meeting with Stalin. These three circumstances, if correct, would support the conclusion that there is no causality between Söderblom's message to Stalin about Raoul Wallenberg and the soon-to-be announced Swedish-Soviet credit.

However, the situation at the time of Söderblom's meeting was, apparently, different. In June 1946, negotiations concerning the credit and trade agreement had already reached an advanced stage. The alleged support for a credit, from a busy Swedish industrial sector, was already very much lacking. Also, at this time, the Swedish parliament and its Advisory Council on Foreign Affairs were not sufficiently informed about the government's credit plans.

This is what the situation looks like just prior to Ambassador Söderblom's meeting with the Soviet leader in June 1946. In addition, the Swedish public is already quite upset in light of the Swedish government's recent extradition of Baltic refugees to the Soviet Union, as requested by the Kremlin. What would happen if it now turns out that Raoul Wallenberg, a Swedish diplomat and hero of the Holocaust, is being held captive in the Soviet Union? The one billion SEK credit would be impossible to grant, and its Swedish supporters would be heavily criticized. Based on these premises, there is a risk that the astonishing message to Stalin about Raoul Wallenberg most likely being deceased was not, as it has been claimed, simply a disastrous mistake on the part of Sweden's Ambassador. Sadly, the analysis above shows that there could have been other, more complex motives behind Söderblom’s key message to Stalin about Raoul Wallenberg.

The Author

Peter Axelsson works as a risk analyst focusing on Eastern Europe. Previous publications include "A political analysis of the military transports conducted on the passenger ferry M/S Estonia" (Kvartal, September 26, 2019). Axelsson holds a Master of Science in Business and Economics and a Swedish Master of Laws Degree.

Contact: susanne.berger@rwi-70.de
Photos: Peter Axelsson; Header ©Irina Grotkjaer

 

Notes

[1] One billion SEK in 1946 corresponded to 250 million USD at the time, or 4 billion USD in today’s value. (In order to put a Swedish credit of 1 billion SEK in 1946 into perspective the amount can be compared to Sweden’s total export of goods in 1946 which amounted to 2.5 billion SEK. See Statistisk årsbok för Sverige 1948 [Statistical Yearbook of Sweden 1948], Tab 108, Införsel och utförsel åren 1836—1947, p. 129)

[2] “Wallenberg varnar för ryssavtalet.” [Wallenberg warns of the Russian agreement], Dagens Nyheter, March 21, 1934

[3] Aleksandra Kollontajs dagböcker [Aleksandra Kollontay's diaries], Stockholm: Albert Bonniers Förlag, p. 359 [February 10, 1934]

[4] Alexandra Kollontay's diaries, p. 361 [end of February 1934]

[5] Alexandra Kollontay's diaries, p. 371f [April 4, 1934]

[6] Klas Böök, Handelsavtalet 1940 mellan Sverige och Sovjetunionen [The 1940 Trade Agreement between Sweden and the Soviet Union], Stockholm: Liber Förlag, p. 9

[7] Zinovii Sheĭnis, Aleksandra Kollontaj [Alexandra Kollontay], Moscow: Progress, 1989, p. 254

[8] On a subsequent trip to the Kremlin, Kollontay tries to answer Stalin's question "Why did the Swedes lose the loan?". Kollontay tells Stalin that it is, among other things, "Sweden's bank magnates" who are to blame for the situation that has arisen. (Alexandra Kollontay's diaries, p. 390 [July 1934])

[9] "Pressgrannar" [Press neighbors], Dagens Nyheter, March 27, 1934

[10] A trade and credit agreement between Sweden and the Soviet Union was signed as early as 1940, but the agreement had to be cancelled prematurely as a result of the outbreak of war between Germany and the Soviet Union. The credit agreement in 1940 would amount to SEK 100 million [USD 25 million], i.e. the same amount which was discussed in 1934 (and a significantly lower amount than the future 1bn SEK credit in 1944). For more information about the 1940 agreement, see Böök, The Trade Agreement 1940 between Sweden and the Soviet Union; and Thomas Hörberg. Prediktion, osäkerhet och risk i internationella förhandlingar: en studie av svenskt förhandlingsbeteende vid förhandlingarna med Sovjet-unionen 1940-41 om ett handelsavtal [Prediction, uncertainty and risk in international negotiations: A study of Swedish negotiating behavior in the negotiations with the Soviet Union in 1940-41 about a trade agreement.] Lund: Studentlitteratur, 1983. See also Sven Anders Söderpalm, Direktörsklubben, Lund: Zenit, 1976, p. 130 (in combination with note 16 on p. 209) where it appears that ASEA already in 1940 would be a prioritized company for the Soviets from which to order goods.

[11] Sweden is governed by a coalition government when the Russian credit is discussed in the autumn of 1944. In his diary, Gösta Bagge, at the time Minister of Ecclesiastical Affairs, describes how it started: "Wigforss had negotiated with Kollontay on his own regarding the terms of such lending. He had mentioned 200 million kronor [SEK] per year for five years, meaning all together 1 billion. […] He now wanted a power of attorney to draw up the lines of lending  to be approved before the actual negotiations started with a [Swedish] delegation in Moscow. [Foreign Minister] Günther thought it was odd that Wigforss had begun such negotiations on his own by promising a billion SEK. By doing this, it would be difficult to have any [other credit] result. Wigforss blushed and was noticeably bothered. [Bertil] Ohlin [Folkpartiet] defended Wigforss […]" (Gösta Bagge, Gösta Bagges Minnesanteckningar 1942-1944 [Notes by Gösta Bagge 1942-1944],Stockholm: Kungl. Samfundet för utgivande av handskrifter rörande Skandinaviens historia, 2013, p. 672 [October 20, 1944].) It has been stated that the subsequent Social Democratic government, in the spring of 1946, only acted on the basis of an already stipulated promise of a credit to the Soviet Union referring to the fact that the Russian credit was relevant already during the coalition government. Social Democratic Prime minister Tage Erlander, for example, wrote in his memoirs: "Already during the time of the coalition government, there was […] a strong determination to support the reconstruction also of the rest of the world. As in many other areas, Ernst Wigforss was the driving force here. Bertil Ohlin was Minister of Commerce in the coalition government during the last year of the war. It was he and Wigforss, who in June 1945, proposed a [Soviet] trade credit of one billion [SEK]. " Tage Erlander, 1940-1949, Stockholm: Tiden, 1973, p. 273. However, the coalition government's co-responsibility for the one billion credit (SEK) has been questioned - not least by Bertil Ohlin himself. In his memoirs, Ohlin criticizes Erlander's description above, and argues that the credit, which the Social Democratic government proposed in 1946, differed to the extent that it could not be linked to the coalition government's original credit discussions. (Bertil Ohlin, Bertil Ohlins memoarer 1940-1951 [Bertil Ohlin's memoir 1940-1951], Stockholm: Bonnier,1975, p. 60ff. To his credit, Ohlin did criticize the credit structure already in the autumn of 1946 when the Russian agreement was discussed in the Swedish parliament. See "Åter stordebatt om det ryska handelsavtalet - Hr Ohlin främste opponent i fejd med handelsministern" [Another major debate on the Russian trade agreement - Mr. Ohlin's main opponent in feud with the Minister of Trade], Sölvesborgs-tidningen, November 14, 1946.

[12] Birgit Karlsson, Rysskrediten 1946: en ödesfråga för nationen? [The Russian Credit 1946 - a fateful question for the nation?], Historisk tidskrift, 1988 p. 345

[13] Ernst Wigforss, Minnen III 1932-1949 [Recollections III 1932-1949], Stockholm: Tiden, 1954, p. 332

[14] ASEA (Allmänna Svenska Elektriska Aktiebolaget [General Swedish Electrical Limited Company]). Söderpalm, Direktörsklubben [Directors' Club], p. 130

[15] Ingrid Carlberg, Det står ett rum här och väntar på dig: Berättelsen om Raoul Wallenberg [There is a room here waiting for you: The Story of Raoul Wallenberg], Stockholm: Norstedts, 2012, p. 461

[16] Arkadij Vaksberg, Aleksandra Kollontaj [Alexandra Kollontay], Stockholm: Norstedts, p. 300. (There is no reference to the original source in Vaksberg’s book.)

[17] Bengt Jangfeldt, Raoul Wallenberg, Stockholm: Wahlström & Widstrand, 2012, p. 460; and Carlberg, Det står ett rum här och väntar på dig, p. 442 and p. 458

[18] Jangfeldt, Raoul Wallenberg, p. 417

[19] On January 17, 1945, the same day that, according to the Kremlin's order, Raoul Wallenberg was to be taken to Moscow, the Soviet Union informed Sweden that it was rejecting the proposal for a trade agreement which had been discussed for some time. See Ingrid Carlberg, "Sveriges svek", Dagens Nyheter, January 17, 2015. Most likely there is no direct link between the two events, but it would be interesting to assess whether the Kremlin, now with a strengthened negotiating position by having Wallenberg as a captive, decided to cancel the negotiations in order to restart them later, at an appropriate time.

[20] Daria Litvinova, "Soviet Prisoner No. 7: The Mysterious Case of Raoul Wallenberg", The Moscow Times, September 30, 2016. As the Swedish-Russian Working Group, which was formed in 1991 with the aim of clarifying Raoul Wallenberg's disappearance, concluded in its final report in 2001: "A primary motive [behind the arrest] was also, by all accounts, that Raoul Wallenberg could be used for an exchange or, in other words, only to be extradited for compensation." Swedish Ministry of Foreign Affairs. Raoul Wallenberg: Redovisning från den svensk-ryska arbetsgruppen [Raoul Wallenberg: Report from the Swedish-Russian Working Group], Stockholm, 2000, p. 163. The report cited statements  from former Soviet State Security officials who in the past expressed similar thoughts about possible financial reasons behind Raoul Wallenberg's arrest. The former Soviet State Security Lieutenant General Pavel Sudoplatov, for example, that Wallenberg's arrest may have been based on financial motives. See Pavel and Anatolii Sudoplatov, Special Tasks, Boston: Little, Brown & Company, 1994, p. 267. A similar theory was expressed by Yevgeny Pitovranov, head of Soviet counterespionage during the years 1946–1951. See Raoul Wallenberg: Redovisning från den svensk-ryska arbetsgruppen, p. 66.

[21] Simon Sebag Montefiore, Den unge Stalin [The Young Stalin], Stockholm: Prisma, 2007, p. 221

[22] Robert Conquest, The Great Terror, London: Macmillan, 1968, p. 142

[23] Jangfeldt, Raoul Wallenberg, p. 442

[24] Raoul Wallenberg: Redovisning från den svensk-ryska arbetsgruppen, p. 65

[25] Swedish Ministry of Foreign Affairs, Raoul Wallenberg: Dokumentsamling jämte kommentarer rörande hans fångenskap i Sovjetunionen [Raoul Wallenberg: Collection of documents and comments concerning his captivity in the Soviet Union], Stockholm: Fritzes Kungl. Hovbokhandel, 1957, p. 72. In Wallenberg's second interrogation which was held three months later, his personal ties to the Wallenberg family came up once again. Erhard Hille, a fellow detainee, testified that Raoul Wallenberg tried to explain to his interrogator that there was no reason for his arrest because they were all on the same side and that he had worked "for the Russians in Budapest". The interrogator dismissed Wallenberg's argument: "[You] are a rich Swedish capitalist and what would such a person do for the Russians?" (p. 89)

[26] Rudolph Philipp, Raoul Wallenberg:  Diplomat, Kämpe, Samarit – och Martyr [Diplomat, Fighter, Samaritan - and Martyr], Höganäs: Wiken, 1980, p. 177. The meeting with Undén took place in September 1945.

[27] Yngve Möller, Östen Undén: En biografi [Östen Undén: A Biography], Stockholm: Norstedts, 1986, p. 20; and Sven Grafström, Anteckningar 1945-1954 [Notes 1945-1954], Stockholm: Samf. för utg. av handskrifter rörande Skandinaviens historia, 1989, p. 816 [July 9, 1947]

[28] "Svenskt tack till Moskva för démarchen i april 1940" [Swedish thanks to Moscow for demarche in April 1940], Dagens Nyheter, October 13, 1945; and "Sovjets ingripande räddade Sverge från indragning i kriget" [The Soviet Union intervention saved Sweden from being drawn into the war], Norrskensflamman, October 13, 1945

[29] Carlberg, Det står ett rum här och väntar på dig, p. 507f; and Maxim Korobochkin, Soviet views on Sweden’s neutrality and foreign policy, 1945-1950 in Peaceful Coexistence - Soviet Union and Sweden in the Khrushchev Era. edited by Helene Carlbäck, Alexey Komarov and Karl Molin, Baltic and East European Studies 10, Centre for Baltic and East European Studies (CBEES), Institute for Universal History (Moscow), Södertörn University: 2010, p. 93

[30] Paul Lindblom, Ernst Wigforss: Socialistisk idépolitiker [Ernst Wigforss: a politician with socialist ideas], Stockholm: Tiden, p. 220

[31] Möller, Östen Undén, p. 259; and Undén, Anteckningar 1918-1952, Stockholm: Kungliga Samfundet för utgivande av handskrifter rörande Skandinaviens historia , 2002,  p. 121 [November 29, 1945]

[32] Undén, Anteckningar 1918-1952, p. 141 [April 2, 1946]

[33] Ingemar Hägglöf, Berätta för Joen [Tell Joen], Stockholm: Norstedts, 1977, p. 203

[34] Jan Glete, ASEA under hundra år [ASEA during one hundred years], Västerås: ASEA, 1983, p. 106

[35] Gunnar Hägglöf, Fredens vägar [The ways of Peace], Stockholm: Norstedts, 1973, p. 33. Gunnar Hägglöf, brother of credit negotiator Ingemar Hägglöf, was Sweden’s envoyé to Brussels during the spring of 1946. Gunnar Hägglöf had previously been involved in the Soviet credit discussions in 1934. See Gunnar Hägglöf, Möte med Europa [Meeting with Europe], Stockholm: Norstedts, 1971, p. 120. He would soon replace Staffan Söderblom as Sweden’s Ambassador in Moscow in July 1946.

[36] "En dansk tidningsuppgift om halvmiljardkredit" [Information about a half a billion [SEK] credit according to a Danish newspaper], Dagens Nyheter, April 26, 1946

[37] Undén, Anteckningar 1918-1952, p. 145 [April 29, 1946]

[38] Carlberg, Det står ett rum här och väntar på dig, p. 519, and notes 1284 and 1288

[39] Raoul Wallenberg: Redovisning från den svensk-ryska arbetsgruppen, p. 371

[40] Statens offentliga utredningar (SOU) 2003:18, Ett Diplomatiskt Misslyckande: Fallet Raoul Wallenberg och den Svenska Utrikesledningen [A Diplomatic Failure: The case of Raoul Wallenberg and the Swedish Foreign Office], p. 366, 389 and 400 https://www.regeringen.se/rattsliga-dokument/statens-offentliga-utredningar/2003/02/sou-200318-/. Also referred to as the Eliasson Commission.

[41] Undén, Anteckningar 1918-1952, p. 145 [May 5, 1946]

[42] Hägglöf, Berätta för Joen, p. 206f

[43] Hägglöf, Berätta för Joen, p. 220

[44] Carlberg, Det står ett rum här och väntar på dig, p. 524; Gunnar Hägglöf, "När Wallenbergarkivet öppnas…" [When the Wallenberg Archive opens…], Svenska Dagbladet, December 12, 1979; and Raoul Wallenberg: Redovisning från den svensk-ryska arbetsgruppen, p. 257. In SOU 2003:18 pp. 401-405 Söderblom's motives are discussed when he asks for a meeting with Stalin. The Eliasson Commission highlights the possible reason that the much-criticized Ambassador Söderblom may have requested the audience with Stalin on his own initiative, with the aim of demonstrating his status and to show that the Swedish-Soviet relations were excellent.

[45] "Svenskdelegation mottagen i Moskva" [Swedish delegation received in Moscow], Expressen, May 25, 1946

[46] Hägglöf, Berätta för Joen, p. 215f

[47] "Gott hopp om svensk-ryskt handelsavtal" [Good hope for a Swedish-Russian trade agreement], Svenska Dagbladet, June 8, 1946

[48] "Handelsöverläggningarna i Moskva fortskrider tillfredställande" [Trade negotiations in Moscow are advancing satisfactorily], Dagens Nyheter, June 9, 1946; and ”Moskva väntar snart avtal, 'läget klart'" [Moscow is soon awaiting an agreement, ”The situation is set”], Dagens Nyheter, June 11, 1946

[49] On June 5, 1946 a possible credit to the Soviet Union was, in fact, briefly mentioned in the Swedish parliament: "We have not only sent food and other necessities to our neighboring countries and also to more distant countries; in the many trade agreements and payment agreements of various kinds that have been reached, we have also been able to take on fairly significant credits to these other countries. Also in the negotiations that are being conducted today, for example, an agreement with the Soviet Union, it is questionable that we should take on further such credit obligations." In Minutes of the Riksdag, First Chamber, # 22, Wednesday June 5, 1946, p. 46. At the same time, there is information in the media about a possible billion SEK credit. See, for example, the commentary "Ekonomisk överblick" [Economic Overview], Söderhamns Tidning, June 6, 1946: “It has been said, that [Soviets] would claim a credit of 1,000 mill. kr. with payment under five years. It is a huge amount, and it would not surprise us if our Swedish suppliers would rather seek to do business with countries in the west […]." But information about a credit remained still vague, which explains Expressen's question a week later on its front page: "1.000 miljoner svensk Sovjetkredit?" [1,000 million [SEK] Swedish-Soviet credit?], June 13, 1946. Four days later, shortly after Söderblom's meeting with Stalin, Expressen would receive confirmation of  the information, resulting in the headline: “200 milj. kr fem år i rad blir den svenska krediten till Sovjet“ [200 million SEK five years in a row will be the Swedish credit to the Soviet Union], June 17, 1946.

[50]"Moskva väntar snart avtal, 'läget klart'" [Moscow is soon awaiting an agreement, "The situation is set"] Dagens Nyheter, June 11, 1946

[51] Se Karin Thunberg, "Minnet bleknar inte" [The memories do not fade], Svenska Dagbladet, January 31, 2012; and Catinka Agneskog, "15 kilo guld kan ha lett till Wallenbergs fall" [15 kilos of gold can have led to Wallenberg's downfall], Sveriges Radio, May 18, 2012

[52] SOU 2003:18 p. 397

[53] Carlberg, Det står ett rum här och väntar på dig, p. 527

[54] Jangfeldt, Raoul Wallenberg, p. 512f

[55] Ronald Fagerfjäll, Peter Wallenberg 1926-2015: Den förlorade sonens återkomst [Peter Wallenberg 1926-2015: The Prodigal Son's Return], Stockholm: Ekerlid, 2015, p. 70

[56] SOU 2003:18

[57] SOU 2003:18 p. 633

[58] SOU 2003:18 p. 649

[59] SOU 2003:18 p. 641

[60] SOU 2003:18 p. 635

[61] For example, Sigfrid Edström, who was involved in a number of industrial organizations and enterprises, wrote the following in his diary at the beginning of 1946: "[Swedish] Industry is expanding and expanding, but where are the people? Where are the workers to build these factories?” See Söderpalm, Direktörsklubben, p. 131.

[62] Hägglöf, Berätta för Joen, p. 209f

[63] Hägglöf, Fredens vägar, p. 33. It is revealing that when the above-mentioned Sigfrid Edström, at the time Chairman of the Board of ASEA, was informed in early June 1946 of an upcoming and extensive credit to the Soviet Union, by which ASEA would be required to deliver significant values to the the Soviet Union, Edström reacts negatively: "[T]his would be virtually impossible, since ASEA was already overloaded with orders." Sigfrid Edström, En levnadsteckning: förra delen [A Biography: Part One], Stockholm: Norstedts, p. 244.

[64] SOU 2003:18 p. 635

[65] Hägglöf, Berätta för Joen, p. 208. The entire discussion can be found in the minutes of the Riksdag, Second Chamber, #21, Wednesday, May 22, 1946, p. 22ff (p. 30f refers to the Soviet Union). Although there is some discussion about credits in the parliamentary debate, no information is provided that indicates the government's forthcoming billion SEK credit to the Soviet Union. Furthermore, it is not possible to find hints of the significant credit to the Soviet Union in the media discussion that follows the parliamentary debate (even if the government's desire for increased trade with the Soviet Union is reported); see for example "Ökat handelsutbyte med Sovjet" [Increased trade with the Soviet Union], Expressen, May 23, 1946; "Importen ökar inflationshotet, regeringen i ny försvarslinje" [Import  increases the threat of inflation, the government in a new line of defense], Dagens Nyheter, May 23, 1946; "Nyttiga riksdagsdebatter" [Useful parliamentary debates], Svenska Dagbladet, May 23, 1946; and "Myrdal ’glömde' Franco-Spanien i sin rapport om utrikeshandeln" [Myrdal 'forgot' Franco-Spain in his report on foreign trade], Norrskensflamman, May 23, 1946

[66] "Politiska decharge-anmärkningar" [Political decharge remarks], Svenska Dagbladet, May 23, 1947

 

Quote: Peter Axelsson, "Can a Swedish Billion Kronor Credit to the Soviet Union explain Staffan Söderblom's disastrous meeting with Stalin", in: News RWI-70, April 20, 2021, URL: https://www.rwi-70.de/raoul-wallenberg-fate-and-a-swedish-billion-kronor-credit/

 

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