Holocaust-Era Assets Finding Aid

Civilian Agency Records

State Department and Foreign Affairs Records

Records of the Foreign Service Posts of the Department
of State (RG 84)

Sweden

Sweden declared its neutrality in September 1939. However, after the German
occupation of Norway and Denmark in April 1940, Sweden was less well placed
to resist German pressure to relax its neutral stance. In June 1940 Sweden
signed a transit agreement with Germany allowing goods and troops to transit
Sweden on their way from Norway to Finland. German soldiers on rotation
to and from the war front made about 250,000 trips across Swedish territory,
as late as August 1943. Moreover, the Swedish Navy escorted German convoys
in the Baltic.

The Germans also increased their economic and financial ties to Sweden.
When the war begun Germans had over 130 corporations, or groups of corporations
in Sweden that were outright branches and subsidiaries of German firms. There
were also firms that were believed to be financed by German corporations of
German nationals. These included AEG, Krupp, the Siemens Group, I.G. Farben,
and Telefunken Gesellschaft. In addition, there were over 170 Swedish
corporations, or group of corporations, to varying degrees had an identity of
interest with German corporations, such as patent and trademark agreements,
"dummy" and "cloaking" activities, cartel agreements, contractual relationships,
and direct representation of German firms, e.g., through Swedish sales agencies.

German influence was significant in Swedish industry, such as iron-ore and
mining, coal import and distribution, machine and machine tool manufacture,
forestry, chemical raw materials manufacture, shipping and shipbuilding, and
steel. The Germans also had real estate investments in Sweden.

Germany's war effort depended significantly upon its imports of raw materials
and goods from the neutral nations. Sweden's exports of ball-bearings
to Germany were vitally important, but were even overshadowed during the early
years of the war when Sweden supplied Germany with 40 percent of its iron-ore
before imports of iron ore from other European countries reduced this dependency.

Despite the close economic ties to Germany and the transit agreement with Germany,
Sweden provided a refugee for those escaping Germany, as well as Soviet, oppression.
Most of the Jews from Denmark were smuggled across the Sound into Sweden.

Once the tide of battle changed, Sweden was relatively more responsive to Allied
pressure to curtail its trade with the Germans. An Allied-Sweden agreement
of September 1943 eventually brought about a progressive, substantial curtailment
of Swedish commerce with Germany. Under the agreement, the United States
and Great Britain agreed to allow an increase in exports to Sweden, including
oil and rubber, in exchange for which Sweden agreed to cancel the transit of
German military material and troops across Sweden, further reduce iron ore exports,
end Swedish naval escorting of German ships in the Baltic, and reduce ball-bearing
exports.

During the last half of 1943 and the early months of 1944, the United States
sought to cripple Germany's ability to continue the war by carrying out a concentrated
and costly bombing campaign against ball-bearing production in Germany combined
with trade negotiations, including preclusive purchasing arrangements, intended
to cut off Swedish ball-bearings to Germany. The United States bombing
campaign reduced German ball-bearing production, but German industrial countermeasures
and improvisations warded off any serious consequences. Moreover, the
September 1943 agreement, while reducing exports of ball-bearings, neglected
to impose restrictions on exports of high-quality steel used to manufacture
ball-bearings. Thus, by allowing Sweden to provide Germany with ball-bearing
steel, it offset the drop in the Swedish export of finished ball-bearings.

During the remainder of the war Sweden continued to pursue a policy which was
generally accommodating to the Allies and unhelpful towards Germany. And
the unremitting Allied diplomatic pressure and the crumbling of the Nazi war
effort moved Sweden gradually to reduce and ultimately to end its trade with
Germany. All Swedish trade with Germany halted completely in November
1944.

The American Government in late 1944 and early 1945, as part of the Safehaven
Program, attempted to have Swedes adhere to the Bretton Woods Resolution VI
and to refrain from dealings with Germany. In November 1944, Sweden
adopted new exchange regulations which had the effect of blocking capital transfers.
The Swedish Government's Foreign Capital Control Office, which had adopted tightened
exchange control regulations in November 1944, made great progress in identifying
German properties and eliminating German influences from Sweden's economy.
But Sweden offered no guarantee that the findings of its census of German external
assets would be made available to the Allies. And the Swedish Government
did not agree to accept Bretton Woods Resolution VI, and rejected all but two
of the specific Safehaven requests made by the Allies.

By April 1945, Swedish officials had assured British and American diplomats
that in response to Allied wartime statements on gold and assets, Sweden would
freeze German assets and restore looted property. At that time the Allied
estimates of German external assets amounted to roughly $90 million and looted
gold sold to Sweden by Germany ranged between $18.5 million and $22.7 million.

By early 1946 the Swedish Parliament had adopted legislation necessary to control
German property in Sweden and was working cooperatively with Allied representatives
to quantify German assets and wartime gold shipments. The Swedish government
consistently rejected, however, the Allied assertion of Allied Control Council
Law No. 5, vesting control in the Council over German external assets.

The difference on the application of international law prolonged negotiations
between Allied and Swedish representatives, that began in Washington D.C. in
late March 1946. But in early July 1946, they concluded an agreement that
immediately provided $12.5 million in liquidated German assets to the Intergovernmental
Committee on Refugees to rehabilitate and resettle the non- repatriable victims
of Nazism, agreed to provide $18 million as reparations to the IARA, and assigned
the remaining $36 million in liquidated German assets for the assistance of
the British and United States occupation forces in Germany to forestall disease
and unrest, and to finance purchases essential for the German economy.
Agreement was also reached on the restitution by Sweden of $8 in gold tentatively
identified as having been looted by Germany from the Belgium. (Note 91)

Implementation of the July 1946 Accord stretched over the next eight years.
Although the Swedes were prompt in providing more than $12 million to the Intergovernmental
Committee for Refugees for the succor of the non-repatriable victims of Nazi
persecution and $36 million was used in Sweden and elsewhere for essential commodities
for occupied Germany, Swedish negotiators haggled with the Allies and the Inter-Allied
Reparation Agency until 1955 over how to distribute the remaining $18 million
for reparation. The promised payment of $8 million in Belgian gold to
the Tripartite Gold Commission was delayed by Sweden until December 1949.

Allied-Swedish negotiations regarding $9.7 million in Dutch gold, which began
after the July 1946 Accord, dragged on until 1955, with the Swedish negotiators
arguing that the gold had been acquired before the January 1943 London Declaration
on looted gold. In April 1955, after Swedish and Dutch officials met in
Washington, D.C. and the Dutch claim was proved conclusive, Sweden transferred
about $6.8 million in gold to the Tripartite Gold Commission. (Note 92)