Klas E. Böök Oral History Interview

Notice
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened February, 1982
Harry S. Truman Library
Independence, Missouri

[1]

WILSON: If there is any question of anything that you might wish to review over, we'll send you a transcript so you can be...

BÖÖK: I think I can speak entirely open, because I have no secrets to tell you. As I mentioned, I went from the Bank of Sweden to the Foreign Office as head of the Commerce Department just after the war. There, we had difficulties with the exchange situation and the inflationary tendencies, and also with the supply of raw materials, particularly coal and oil. I was mostly then concerned with negotiations with the Eastern countries; Russia and

[2]

Poland for coal; Russia for oil and also for wheat. The Western side of the business, of course, I had it under me, but that was very much taken over by others, because that was our important thing just after the war -- raw materials supply.

In '47 when the speech of Mr. Marshall was heard, I was still in the commercial section, as head there, but shortly afterwards I was transferred back to the Riksbank, as Governor. There was a kind of crisis in the Riksbank and I had to take over that job. During that time it was Dag Hammarskjöld who carried the whole burden of the Marshall negotiations, and the negotiations in Paris. I think he played a certain role in that.

WILSON: Yes.

BÖÖK: He was very positive and I think he made a constructive approach in everything. The direct contribution that we received was not so important, for it was approximately half a million dollars altogether. The biggest part was in counterpart

[3]

funds. We were paid in dollars for things we delivered to Norway on docks, ships and so on. That was important for us, because we bought hard currency instead of weak currency, that we had to accept otherwise. But, the indirect help was extremely big for us, because all our European trading partners were put in a situation that made it easier for us to exchange goods and services with them. Also, the economic collaboration, the abolishment of restrictions and trade, was of extremely big importance for us, and, of course, the basis for all that was the Marshall plan.

WILSON: Did you participate directly in negotiations leading toward the European Payments Union?

BÖÖK: No, it was Dag Hammarskjöld who carried most of that, with some of the junior people in the Foreign Office. I was, at that time, at home at my desk, so I followed it very closely but without taking a part in it "on the field."

WILSON: What do you recall from that side about some

[4]

of these larger issues. One of the questions that occurs and has been raised by some others is Swedish participation, since you and in a way Belgium, and Switzerland, had the least need for direct aid. Would it be fair to say that there was some serious question at the time of Marshall's speech and the Marshall plan was initiated, whether Sweden would take part? Did it generate excitement?

BÖÖK: I think it was welcomed in Sweden in general. Of course, after those difficulties between the Soviet Union, France and Great Britain, the Communists withdrew, but that was almost a real position in Sweden. They argued that it would be a break in our neutrality policy, but nobody else thought that. All of our political parties considered it an economic and a constructive thing, which was badly needed for Europe at this time, for rebuilding its economy. I think there were no political difficulties at all. There were a lot of technical difficulties and technical questions, and all these bilateral negotiations, between the United States and the countries participating, but I think it went smoothly. We had

[5]

a very good representative in Sweden for the Marshall Plan, and he became the director of the stock exchange in New York afterwards -- [John F.] Haskell.

WILSON: Oh, yes.

BÖÖK: We had a lot of talks there. Haskell was a reasonable man, and he put his cases firmly, but we could always discuss things. I think it helped a lot that we had a good man there who understood our position and our difficulties.

WILSON: There was some talk at the time about using an existing body, the Economic Commission for Europe, which Gunnar Myrdal later headed, as the means through which aid would be funneled rather than creating this new organization which was only in the West. Was there great support in Sweden for this?

BÖÖK: When the Communist countries backed out I think there was no question of using the Economic Commission for that.

WILSON: Right.

[6]

BÖÖK: In the beginning, perhaps, we would have favored a solution with the participation of all the European countries. Yet, when the Russians spoiled that possibility, I think it was quite natural to build a new organization for that with the Western European countries.

WILSON: How much importance did you place upon the OEEC as a building block for the future? Was there great hope that this might develop into a super-national organization, or were people in Sweden concerned about recovery first and then what might be done?

BÖÖK: We considered this an ad hoc institution, created for the purpose of forwarding the rehabilitation of Western Europe. It turned out that it was more important than that, and it continued as a basis for European collaboration. I think we hoped quite a lot on that organization for these economic collaborations, for the freedom of trade, for the abolishment of restrictions and so on.

Of course, we never wanted to have it as an

[7]

alternative to the United Nations. That was one of the things that we feared. The United Nations, in which we believe very much and still collaborate with, is an all around international organization. Even now we are rather afraid to play our organizations which compete with the United Nations and its goal and so on. There might have been some fear about that also, when the OEEC was created, but that I think was the only thing which concerned us.

WILSON: Were you dismayed at the evidence that the great powers in the West, the United States in particular, had pretty much abandoned the United Nations by 1947 as a means for accomplishing these goals which Sweden and other countries were working for? There was considerable evidence that the original aims of the U.N. had been given over.

BÖÖK: I think we always kept in mind that we should do everything for the United Nations, and of course, we remembered Woodrow Wilson and the League of Nations. We were very happy when the big powers turned towards the United Nations, and showed increased interest

[8]

in it. Some of them were unhappy when we felt that they were turning their backs toward that organization.

Our Foreign Minister, then, was Mr. Östen Undén, who was one of the big men in the League of Nations. He worked there between the two wars, together with our leader of the Social Democratic Party at that time. So we had that tradition and he was the Minister of Foreign Affairs, also, after the war; and he, through tradition, was to work for international organization. First, the League of Nations, and then he was extremely eager to do all he could to favor the development of the United Nations. Then, of course, we had Dag Hammarskjöld as Secretary-General there. So we had been very closely tied to that organization.

WILSON: What were the sources of the dollar shortage which developed in Sweden in '47, '48?

BÖÖK: Well, as you perhaps know, we revalued our currency.

WILSON: Oh yes, that's right.

[9]

BÖÖK: After that there was an extremely big rush for imports; but that, of course, was also connected with the fact that we had difficulties selling except in weak currencies, in non-convertible currency, because all of Europe's oil market had a dollar shortage and they could only pay bilaterally, in non-convertible currencies. Because of that we didn't get any dollars for our exports.

On the other hand, we had big needs to import, and there very often we had to pay in dollars. Then there was a certain weakening, for example, of the pulp market in the United States. Our exports of paper and pulp, which were very important to the United States at that time, diminished, so our direct income from the exporting to the United States also decreased. So, there was a combination of factors forcing a dollar shortage in the country.

WILSON: Were you frustrated by the somewhat paradoxical American restrictions on imports (your exports) into the United States? Some of the people with whom I've interviewed have commented that while there was this strong American push for trade

[10]

liberalization, there were also great difficulties in getting agricultural imports into the United States, because of the role of the Department of Agriculture, because of tariff duties, because of confusing customs arrangements and this sort of thing. Did you make these points to Americans?

BÖÖK: I don't think we were so much hit by that because our exports were staple goods, paper pulp, iron, and so on. But, of course, we have always been afraid of the restrictive trade policies, even now. The problem was that the United States would turn back to a more restrictive import policy, while in principle, both the United States and all the European countries had the goal to free the trade.

One sees that in all the discussions of the EEC, and there is no doubt about that.

WILSON: What about the so-called invisible exports, the problems that were raised by the insistence of the United States Congress that 50 percent of all goods be sent in American shipping, the difficulties

[11]

that this would have raised for Scandinavia, or Nordic countries, who were traditionally strong shipping countries?

BÖÖK: There had been some difficulties with that. But, it was not, for a time being, a big problem. It had been after the war, quite a problem at times, but I think it was more a Norwegian thing.

WILSON: Were you concerned in general about the tone of the American aid program? Some people have commented that while the Marshall plan was a brilliant program, and enormously successful, it seemed to stem from a negative purpose, anti-Communism as a basis. Some have even said that there was a confusion between socialism and communism in the way the program was worked out. Is that a fair statement?

BÖÖK: The basis was that all the European countries should take part, and that was the opening program of Mr. Marshall. The fact that it was not realized was not the fault of the American side. I believe it was the negative attitude

[12]

of the Russians. There we noted that Poland and Czechoslovakia started by saying yes, and then they reversed their position.

WILSON: Yes.

BÖÖK: The whole thing was meant for the whole of Europe, not only for the Western countries of Europe, the non-Communist countries; and that it went the other way was the Communists' fault.

WILSON: I don't mean to sound anti-American, I'm not, but by asking some of these questions I'm trying to get balance in our approach. The one critical issue between Sweden and the United States in the period was that of East-West trade. I think in the end it resulted in the amicable closing of the mission because of American desires -- the Kem Amendment, the Battle Act -- to restrict what they called strategic shipments, with the East. What did you feel were the motives? Did you think you understood the motives behind this? Was it a justifiable approach which the Americans were taking in your view?

[13]

BÖÖK: We had difficulties understanding that if we could exchange goods with Communist countries and get what we badly needed in return, that was part of rebuilding of Europe.

WILSON: Yes.

BÖÖK: That definition of strategic goods worried the leaders -- what was one thing or what was the other. Yet, I don't think that we really were forced to accept American occupation there.

WILSON: No.

BÖÖK: We were, of course, careful, without following quite quickly the American intentions. I think that was more or less accepted by the United States, that they didn't force us to go too far in Europe.

WILSON: How successful were you in the immediate years after the war in rebuilding and bringing up to normal prewar levels your trade with the East? Poland has been a very important supplier of coal and...

[14]

BÖÖK: Absolutely, and we had a lack of oil. We could buy oil only against dollars, which were in scarce supply, and I think we succeeded fairly well with exports from Poland. I followed that closely, because that was when I headed the commercial section, and we had very hard discussions with the Poles. They had, of course, their difficulties in building their communications, after the war, but I think we succeeded to fairly good extent in getting what we really needed from Poland in exchange, of course, for what they needed badly, machinery items. We even put the railway wagons and engines at their disposal in Poland in order to transport coal to the ports to be further exported to Sweden. We had agreements on that and it worked fairly well.

From Russia we got some oil, and wheat, which was needed then, not now, in Sweden.

WILSON: One of the most difficult parts of this study and subject is to try to understand why the expectations, concerning Western Europe's normal trade ties with the East, did not develop. Obviously in large part it's because of the Eastern bloc's

[15]

policies, but there are some other puzzling things as well. That's a partial explanation of the dollar shortage, isn't it?

BÖÖK: Yes.

WILSON: Western Europe had to buy things from the Western Hemisphere and the United States, which traditionally came from the East.

BÖÖK: From the beginning, one must realize that there were extremely big, practical difficulties, in Eastern countries. They were illustrative of the war; they had communication troubles, and production troubles. So it was not easy for them. What we had was in great supply of what they very badly needed, so it was a barter exchange. There was a time when we had to weigh every item -- if I get that, you get that, and if I don't get that, we will withdraw that. So with these bilateral trade negotiations, which were extremely difficult and complicated, one had to make a lot of preparation before each talk.

[16]

WILSON: Did you have important bilateral arrangements also with the occupied zones of Germany in the years immediately following the war? Was there a considerable trade?

BÖÖK: Yes, with Western Germany. With East Germany we haven't succeeded very well with our trade. We had some trade, but not to the same extent. Of course, with West Germany we worked very hard. There we made bilateral agreements with...

WILSON: Joint import-export agency?

BÖÖK: Yes.

WILSON: Was that an agency easy to deal with? I've heard from some others that it was...

BÖÖK: A lot of complications. Yet, I think we succeeded gradually to get contact also with the new Germans themselves. So we had influence loosely, but it did go to some extent.

WILSON: That's very interesting.

What was your view at the time of the British

[17]

role in all this? One of the subjects that has come up most often in the interviews has been the British policies towards Europe. There had been considerable British-Scandinavian cooperation in the period immediately following the war, and there had been some sort of trade agreement.

BÖÖK: The Oslo Powers.

WILSON: The UNISCAN.

BÖÖK: Yes, something like that.

WILSON: Did you have difficulties with the British because of the mystique of the pound at a time when the pound sterling...

BÖÖK: I don't think so. I think we had a very close cooperation with the British. It started during the war. Dag Hammarskjöld and myself were in Great Britain in '43, '44, '45 several times. It was rather dangerous travel in those old Mosquito planes.

WILSON: Oh, you took them?

[18]

BÖÖK: Quite alone. We were chased by German planes at that time and some of them were shot down. Dag Hammarskjöld and myself kept contact with the British, with the Bank of England, and Treasury. We made a monetary arrangement with the British and created a special kind of half-bilateral arrangement between the two countries which went smoothly. Of course, in the beginning, the British had to overdraw their accounts with us, so they got indebted in sterling. Then we had some kind of an exchange rate guarantee; it went very well, as it did with the United States during the war. The freezing of the Swedish assets in the United States was a big business deal with a certain amount of success, and definitely, in Switzerland, because we could use our dollars during the war all the time, in spite of that freezing.

WILSON: Oh, I didn't know that.

BÖÖK: Yes, that is an interesting thing. We had special arrangements with the United States whereby the Exchange Control Board in Sweden certified

[19]

every transaction guaranteeing that there was nothing from the Axis, from Germany, from Italy, and that no such interest was involved. Then we cabled every day our report to the States, all the licenses that we had granted for the Swedish banks, to make payments from their accounts with American banks. Therefore, we had an organization up in New York and they gave the license to the American banks for each transaction. So the Swedish banks could use their dollar balances in the American banks, under our license, in spite of the freezing by the American Treasury.

WILSON: Were these for purchases only in the United States, or could they be used anywhere else?

BÖÖK: As long as they didn't touch the enemy interest, from the point of view of the United States.

WILSON: That's very interesting.

BÖÖK: We gave the license, but afterwards the Treasury in the United States concluded the transaction. Daily we issued many thousand licenses in Sweden,

[20]

and as far as I remember, there were three cases during the whole time where we got complaints from the Treasury that we had made mistakes.

WILSON: That's quite remarkable given the concern...

BÖÖK: You know how particular the Treasury of the United States is about every case.

WILSON: Yes, they are.

BÖÖK: But that worked very smoothly.

WILSON: You said you thought quite highly of the American representatives in Sweden.

BÖÖK: Haskell, yes; but he had nothing to do with that, this was during the wartime.

WILSON: Were you equally impressed with the Treasury people and American representatives in general with whom you dealt?

BÖÖK: The Treasury was very thorough and to a certain extent difficult, but fair, and you could always discuss a case with them.

[21]

WILSON: Yes. That’s one of the…

BÖÖK: But a little too legalistic perhaps.

WILSON: Yes. One of the topics that has come up has been the problems sometimes caused by the fact that Treasury had interests in what the Economic Cooperation Administration or the State Department or the Commerce Department was doing and that Treasury could be expected to take the most legalistic approach.

BÖÖK: But we had good relations with the Americans and we trusted each other, which was a condition for existence.

WILSON: Yes, that’s very interesting.

I thank you. You’ve given me some information which I didn’t have before and that’s why I’m here.

BÖÖK: It comes out so well if you think about it. I have been away from this for such a long time.

WILSON: Yes, but I’m very much impressed by the ability

[22]

of the people with whom I have talked to go back 20 years and to revive all this. I frankly was not sure how much information I would get, but I've found that it's been extremely useful and appreciate this and the opportunity to come to Bern. I would not have come otherwise.

Agricultural Department, 10

Bank of Sweden, 1
Battle Act, 12
Belgium, 4

Commerce Department, 1, 21
Counterpart funds, 2-3
Czechoslovakia, 12

Economic Commission for Europe, 5
Economic Cooperation Administration, 21
European Economic Commission, 10
European Payments Union, 3

Germany, 16, 18, 19

Hammarskjöld, Dag, 2, 3, 8, 17, 18
Haskell, John P., 5, 20

Italy, 19

Joint Import Export Agency, 16

Kem Amendment, 12

League of Nations, 7, 8

Marshall, George C., 2, 4, 11
Marshall plan, 2-3, 4, 11-12

• • and Sweden, 5
• Myrdal, Gunnar, 5

  New York, N.Y., 19
  Norway, 3

  Organization of European Economic Cooperation, 6, 7
  Oslo, Norway, 17

  Paris, France, 2
  Poland, 2, 12, 13-14

  State Department, 21
  Sweden, 4, 12, 19

  • currency of, 8-9
    economy of, 18
    and Germany, 16
    and the Marshall plan, 5
    and trade, 9-11, 12, 13-16
    and the United Kingdom, 17
  Switzerland, 4, 18

  Treasury Department, 19-21

  Union of Soviet Socialist Republics, 1, 2, 4, 6, 12, 14
  United Kingdom, 4, 16-17
  Undén, Östen, 8
  United Nations, 7-8
  United States of America, 19, 20, 21

  Wilson, Woodrow, 7