Wallenberg Family

[Magda Hassan]

Wallenbergs had big role in Sweden WW2 diplomacy, says biography


December 11, 2000
Web posted at: 11:55 AM EST (1655 GMT)


STOCKHOLM, Sweden (Reuters) -- Two cousins of diplomat Raoul Wallenberg played an officially sanctioned but controversial part in neutral Sweden's World War Two diplomacy, according to a new biography.
Businessman Marcus Wallenberg blamed his brother Jacob for a secret share deal with Nazi Germany which almost brought Allied sanctions down on their banking and industrial empire after World War Two, the biography of Marcus Wallenberg shows.
Marcus, who died in 1982 aged 82, is credited in the biography with visionary enterprise in expanding and consolidating the Wallenberg banking and industrial dynasty which is now in its fifth generation.
But the Wallenbergs faced infamy and ruin in 1945 after U.S. troops entered Stuttgart and unearthed incriminating documents in the archives of engineering firm Robert Bosch.
These showed that the Wallenbergs had agreed to sell back their ownership of the American Bosch company, based in Springfield, Massachusetts, to the German parent company after the war, contrary to what the brothers had told Swedish and U.S. authorities.
The Americans were incensed. They already suspected that Jacob was pro-German and were skeptical of Marcus's reputation as pro-Allied. They sought to blacklist the Wallenbergs -- stopping them from operating in any Allied country.
Marcus's response, which has not been fully documented until now, was to play down his own role and shift the blame to Jacob.
In a personal note to the U.S. Treasury Department in December 1945, he expressed regret for the Bosch affair, said it had been badly handled by the family-controlled SEB bank, and that his brother had not taken American sentiment into account.
Ulf Olsson, Professor of Economic History at the Gothenburg School of Economics and author of the biography, said that by emphasizing the differences in approach and saying he would soon be running the bank, Marcus managed to make his own brother one of the scapegoats for the Bosch affair.
"In fact the differences in the brothers' complicity in the matter were not great," Olsson wrote.
But Marcus succeeded in persuading the British, who were later to decorate him for his wartime diplomacy, and the United States not to blacklist the Wallenbergs and their companies.

"The biggest loss was not so much economic as the negative impact on the Wallenberg brothers' reputation inside and outside Sweden," Olsson wrote, noting that for years they were linked in the American press with Nazi Germany.
Raoul Wallenberg not part of family business

Olsson's book "Marcus Wallenberg -- Furthering the Family Fortune" traces how he more than any other Wallenberg shaped the business empire which is still influential today, but also gives intriguing insights into neutral Sweden's role in World War Two.
Raoul Wallenberg, the Swedish diplomat credited with saving the lives of thousands of Hungarian Jews during the war, is not mentioned in the biography as he was not part of the fiercely exclusive core family that ran the SEB bank-centered group.
"Raoul was never part of the Wallenberg business. He was on the periphery, he never had any money. He met Marcus Wallenberg at family occasions but I don't think they were ever close," Olsson told Reuters.
By contrast Marcus and Jacob were groomed not only to look after the family silver but also for the semi-official role of Swedish emissaries and plenipotentiaries which successive governments were happy to accord the family.
Polyglot, well travelled and with connections in Berlin, Paris, New York and London, the Wallenberg brothers conducted a shuttle diplomacy during World War Two that had more official backing than was believed up until now.
"There was a tradition that when war came, going back to the Franco-Prussian war, the Swedish Foreign Ministry would use internationally well known and oriented people as representatives. They knew how to negotiate trade agreements," Olsson told Reuters.
"In the 1930s there weren't many to choose from and it's not so strange that those two young, well-educated men were used. It's ironic that they ended up in different camps, so to speak," but Sweden needed trade accords with both sides.
As war loomed, Sweden was determined to avoid the embarrassing experience of World War One when Britain and its allies discovered that imports allowed into Sweden had been reexported to Germany.
This time the government wanted Sweden's substantial ore shipments to Germany to be clear and above board while ensuring that export markets to Britain and the rest of Europe stayed open. The Wallenbergs were called in.
Wallenbergs key in reaching trade pacts

Jacob became instrumental in reaching a trade pact with Germany, though Marcus also travelled to Berlin and met top Nazi Hermann Goering in 1938 and again in 1939.
Marcus was made responsible for trade ties with Britain, in the course of which he became a personal friend of R.A. Butler, confidant of Foreign Secretary Lord Halifax, and also met future prime minister Winston Churchill.
Through sailing and banking connections, Marcus also knew members of the Finnish government and would later play a role in arranging that country's 1944 truce. Finland had fought with Nazi Germany in an uneasy pact against the Soviet Union but cut its ties to make peace with Moscow and preserve its independence.
"Sweden tried this time to be more open, which they basically succeeded in, at least until 1944 when the system broke down," said Olsson, whose book will be translated into English.
"The fact that the government used the Wallenbergs shows how well established they were and in what high esteem they were held."
Marcus Wallenberg bristled at suggestions in Britain that "the Swedes have sold their souls to the Germans" when they allowed German troops to pass through Sweden to occupied Norway and sold the Nazis more ore than had been agreed.
He had a chance in 1943 to demonstrate his goodwill.
Jacob gave him a message from a German contact, former mayor of Leipzig Carl Goerdeler, enquiring whether Churchill would be willing to drop the demand for unconditional surrender if a group of German generals assassinated Hitler.
Marcus used his British contacts, including Charles Hambro of the banking family, to obtain a cautious but positive response from Churchill, which was relayed back to Germany.
Hitler survived the July 20, 1944, bomb attack, and Goerdeler was executed along with 200 other opponents of the Nazis.
"Marcus Wallenberg did not play a large role," Olsson said, but if the plot had succeeded his role would have been crucial."
Regardless of the outcome the incident showed how effective he was at using his connections and obtaining the ear of Churchill, he said.