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Klas E. Böök Oral History Interview

Oral History Interview with
Klas E. Böök

During the years of the Truman administration, was Envoy Extraordinary and Minister Plenipotentiary; and Head of Commercial Department, Foreign Office, 1947-48; Deputy Chairman, Export Credits Guarantee Board, 1947-51; Chairman, Foreign Exchange Control Board, 1948-51; member, Foreign Funds Control Board, 1945-51; Governor, Bank of Sweden, 1948-51; and Swedish Minister in Canada, 1951-55.

Berne, Switzerland
July 10, 1970
by Theodore A. Wilson

[Notices and Restrictions | Interview Transcript | List of Subjects Discussed]


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 It may not be published in full except by permission of the Harry S. Truman Library.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

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Oral History Interview with
Klas E. Böök

Berne, Switzerland
July 10, 1970
by Theodore A. Wilson

[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