Nationalisation of foreign property in the Russian revolution: the Swedish case

ABSTRACT

In contrast to other economic calamities such as financial crises or war, the topic of nationalisation has received only little attention by economic and business historians. Drawing on Russian and Swedish archival sources, this paper takes stock of the economic losses incurred on foreign investors in the 1917 Russian revolution, with particular emphasis on the Swedish case. Constructing lower and upper bounds for the losses, the paper argues that depending on the chosen measure these were in the range from 380 to 1,140 million SEK in 1917. For a country that remained neutral throughout two world wars, the Russian revolution represents one of the largest (if not the largest) externally incurred losses on Swedish firms and households in modern history. These results suggest that the role of revolutions in international business history needs to be better understood.

KEYWORDS:

• Russia
• nationalization
• revolution
• foreign investments
• Sweden

JEL-CODES:

• P26
• N00
• N44
• K33
• K42

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Central State Historical Archive of Saint Petersburg (TsGA SPb), f. 1322, op.2, d. 61, l. 61.

2 The Bolshevik seizure of power occurred on 25 October 1917, according the Old Style (Julian) calendar. All dates are provided according to the conventional Gregorian calendar in the present article.

3 The situation beyond Europe, as Lipson notes, involved less reciprocity and more coercion.

4 In July 2012, an arbitration court in Stockholm concluded the Yukos case was indeed an act of expropriation. The ruling is available online at the website of the Arbitration Institute of the Stockholm Chamber of Commerce, http://www.sccinstitute.com/ (accessed 28 September 2013).

5 Percentage shares as of the years 1916-1917; cited in Liashchenko, 1948. Soviet figures should be treated with requisite care.

6 Ol’, Foreign, 9. The English translation of this book fails to render adequately the names of Swedish firms, owing to the difficulties of transliteration back from the Russian language (i.e. Wicander, rather than Vikandr as in text; and L.M. Ericsson & Co., rather than L.M. Eriksen & Co.).

7 Other governments also engaged in sequestration of enemy property during World War I; however, only rarely did they target property belonging to their own citizens.

8 One Petrograd office belonging to a Swedish national was looted in 1915. Riksarkivet, SE/RA/730442, Rysslandssvenskarnas förening. ‘P.M.’

9 Riksarkivet, SE/RA/730442, Rysslandssvenskarnas förening. ‘Varför hade icke rysslandssvenskarna sökt att i tid översända pengar till utlandet?’.

10 According to one report from the Swedish-Russian Association, informal money transfers had been extensive throughout the war: ‘It is a well-known fact that basically every courier brought with him, besides valuables, also monies, and sometimes in very large sums.’ Riksarkivet, SE/RA/730442, Rysslandssvenskarnas förening. ‘Angående händelser, som drabbat vissa rysslandssvenskar.’

11 Notably Central State Historical Archive of Saint Petersburg (TsGA SPb), concerning L.M. Ericsson and the Ludvig Nobel company, and the Russian State Historical Archive (RGIA), concerning Branobel.

12 One of the largest available archival sources with documents related the nationalization of foreign property is the archive of the People’s Commissariat for Internal Affairs of the Russian Soviet Federative Socialist Republic (NKVD), which was created in 1917 as an agency tasked with regular police work. I have consulted this archive as part of my research, but although it contains valuable information on the institutional practices behind the nationalization process, it provides little information on its economic dimensions.

13 Riksarkivet, SE/RA/321614, Ryska utredningskommissionen, vol. 1, folder 4. Folder on Affärssystem AB.

14 Riksarkivet, SE/RA/321614, Ryska utredningskommissionen, vol. 40. ‘PM beträffande förlorad egendom i Ryssland’. See also Riksarkivet, SE/RA/321614, Ryska utredningskommissionen, vol. 1, folder 13. Folder on AB Sigfrid Andersson & Co; AB Arto; and Richard Berg AB.

15 Central State Archive of Saint Petersburg (TsGA SpB), f. P-1322, op. 2, d. 1.

16 Riksarkivet, SE/RA/321614, Ryska utredningskommissionen, vol. 1, folder 9. Folder on ASEA.

17 See Borodkin & Dmitrieva, ‘Shares’.

18 Riksarkivet, Rysslandssvenskarnas förening, vol. 40. Letter dated 12 March, 1924.

19 Riksarkivet, Rysslandssvenskarnas förening, vol. 40. Letter from Ida Granberg, dated 7 May, 1926.

20 Riksarkivet, SE/RA/321614, Ryska utredningskommissionen, vol. 4, folder 29. File on Lovisa Zoubkoff.

21 Riksarkivet, Svenska utredningskommissionen, vol. 40. Symon Petliura was a Ukrainian politician and Supreme Commander of the Ukrainian Army during Ukraine's short-lived sovereignty in 1918–1921.

22 Riksarkivet, Ryska utredningskommissionen, vol. 40. Report by Ambassador K.E. Widerström to the Swedish Minister of Foreign Affairs, dated 14 December 1927.

23 Riksarkivet, Ryska utredningskommissionen, vol. 40. Letter from Swedish Baku legation representative Knut Malm to Major A. Andén, 29 August, 1924.

Additional information

Funding

Part of this research was conducted on funding generously provided by Jan Wallander och Tom Hedelius Stiftelse (W2010-0093:1).