Iehc 2006 session 101

IEHC 2006

SESSION 101

Cold War and Neutrality: East-West Economic Relations in Europe

21

Sweden agreed to pay it partly in goods and partly in the foreign currencies of other states.

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The Czechoslovak efforts to maintain the Czechoslovak-Swedish trade relations "viable" lead

to making major concessions in the compensations for nationalization because Sweden

explicitly threatened to suspend the deliveries of iron ore and ball bearings. Therefore in

March 1948, Živnostenská banka, on instruction by the Czechoslovak government, purchased

the Swedish ownership interests in the inter-war Czechoslovakia (the interests of SKF, NIFE,

AGA, ALFA, SEPARATOR, ASTRA MONTANA and ELECTROLUX) for a lump-sum

purchase price of 10,325,000 Swedish Crowns. The government's representative for

agreement on compensations for nationalization signed a compensation arrangement with

Ericsson in the same period. The compensation amounting to 680,000 Swedish Crowns was

to be paid in three installments and the last one was to be paid on 1 August 1950. The

Czechoslovak pliability to Swedish claims culminated in addressing the issue of the joint-

stock company of the Freja mine in Sweden, which was the subject matter of a lawsuit

conducted by a group of the original owners of the nationalized Mining and Metallurgical

Works of Vítkovice (the Rothschild and Guttmann families), to which the Freja company was

affiliated during the inter-war period, against the national enterprise of the Iron Works of

Vítkovice. Czechoslovakia accepted the agreement according to which the share capital of

Freja was sold to Luossavarra Kiirunavaara, a Swedish concern engaged in the ore industry,

for 33 million Swedish Crowns, with an amount of 15.5 million Swedish Crowns having been

paid to the said Jewish business families and the rest of the amount was allocated to

Czechoslovak assets.

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In October 1948, Sweden filed claims for further compensations for nationalized

property; specifically, it filed the claims of the MUSTAD company.

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 Although the 1947

protocol extending the term of the trade and payment agreements expired on 31 October 1948,

Sweden was not keen to sign its extension because the absence of agreement created the

"necessary pressure" on the Czechoslovak party. The subsequent document was not signed

until 1 February 1949. It reflected the changed situation, specifically the international political

situation as well as the developments in international economic markets characterized by

suppression of Communism and economic blockade on one side and an increasing endeavor

for autarchy, associated with difficult or even illicit process of obtaining scarce raw materials

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 Agreement on the settlement of excess financial amounts, concluded on 17. 3. 1948, ibidem, no. 204.000/48.

56

 Report on the new trade and payment agreement with Sweden, NAP, MFT, Secretariate of Dr. Margolius

1951, Sweden, uninvetoried materials, no. 1134b/51.

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 Ibidem.

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IEHC 2006

SESSION 101

Cold War and Neutrality: East-West Economic Relations in Europe

22

on the other side. The new agreement was concluded for the period from 1 February 1949 to

31 January 1950.

The total volume of quota-based documents was 3.5 billion Czechoslovak Crowns, of

which Czechoslovak export accounted for 1.85 billion Czechoslovak Crowns and

Czechoslovak import accounted for 1.65 billion Czechoslovak Crowns. Czechoslovakia

maintained the so-much needed imports of ores, alloys, bearings and chemicals. The Swedish

promised to apply a benevolent approach to possible barter transactions (based on exchanging

goods for goods) that could be carried out after exhaustion of the quotas defined in the

agreement or possibly applied to goods not included in the quota lists and this promise had an

extraordinary value. Reciprocally, Czechoslovakia unilaterally increased the marginal credit

for Sweden by 100%. The difference between Czechoslovak import and export amounting to

ca 0.2 billion Czechoslovak Crowns was to be used to pay the amounts for the nationalized

Ericsson company, which was yet another Czechoslovak concession. The reciprocal trade of

certain imported items, the import of which was contingent on the export of certain items, was

a new arrangement. For example, the import of ores and bearings was contingent on the

export of china clay, electrotechnical porcelain or fine metal sheets. Both parties were limiting

the import of "non-essential and luxurious items" such as imitation jewelry, chocolate, music

instruments and motorcycles.

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The trade-political negotiations about renewal of the trade agreement by another year,

which took place in Prague from 27 January to 30 March 1950, were again difficult. The

Ministry of Foreign Trade in Prague described its negotiating position as a "very precarious

one".

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 The resulting protocol with a term of one year became effective on a retroactive basis

– from 1 February. With regard to the given situation, Prague perceived the contents of the

agreement as a victory because the quotas for import of iron ores and ball bearings had been

increased but, on the other hand, Sweden decreased the quotas for some imported goods

interesting for Czechoslovakia such as computing machines, kerosene cooking stoves, etc.

Reduction of these quotas were perceived by Prague as a Swedish discriminatory measure.

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The price that had to be paid for the increases of the quotas of strategic commodities was the

imposed purchase of Swedish consumer goods. The agreement again opened up opportunity

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  Protocol on trade relations, 1. 2. 1949, ibidem, sine.

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   Record on consultations about facilitating of payment relations with Sweden from 24. 2. 1950 with  annexed

record for viceminister R. Margolius concerning this problem from 7. 2. 1950, ibidem, no.  502.905/50.

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 Protocol on trade relations, 30. 3. 1950, ibidem, sine.

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