If you’ve ever visited Latvia, you’ll probably have heard of the chocolate brand Laima. Perhaps you’ll even have seen the Laima Clock, a popular meeting point in central Riga. Laima products have been among Latvia’s most successful exports all the way back to the 1920s. What’s less well known is that the company was originally founded by Jewish entrepreneurs.
Introduction
Text
The Laima Clock in central is one of the Latvian capital’s most famous landmarks and a popular meeting point for locals. It has borne the name of Laima, Latvia’s best-known chocolate brand, ever since 1937. Before that, in the 1920s and early 1930s, it advertised Riegert, a chocolate maker founded in 1870 by the Baltic German entrepreneur Theodor Riegert. In 1937, Riegert was nationalized, just as Laima had been a year earlier, and the two companies were merged into a single state-owned enterprise under the government’s preferred name, Laima (which derives from laime, the Latvian word for “happiness”). And so the Riegert Clock became the Laima Clock.
Rīga
deu. Riga
Riga is the capital of Latvia and, with almost 630,000 inhabitants, by far the largest city in the country. It is located in the southwest of the historical landscape of Livonia near the mouth of the river Daugava in the Gulf of Riga. Historically, Riga was an important trading and Hanseatic city with a largely German-speaking population, whose political supremacy changed repeatedly. Until the end of the Middle Ages, it was mainly ecclesiastical rulers (Archbishopric of Riga, Teutonic Order) who claimed the city and the surrounding area for themselves. After a short period of Polish-Lithuanian rule, the city became part of Sweden in 1621. Just a century later, Riga became part of the Russian Empire and here became the capital of the Baltic governorate of Livonia. Only in 1918 Riga became the capital of an independent Latvian state.
Riegert-Clock in Riga, Kaļķu iela. Latvijas Nacionālā bibliotēka [National Library of Latvia], Zudusī Collektion, Letonika and Baltic Center. Baltic Central Library Collection, R0204-a3 (https://www.europeana.eu/item/92085/24817). CC BY 4.0
Riegert-Clock in Riga, Kaļķu iela. Latvijas Nacionālā bibliotēka [National Library of Latvia], Zudusī Collektion, Letonika and Baltic Center. Baltic Central Library Collection, R0204-a3 (https://www.europeana.eu/item/92085/24817). CC BY 4.0
Jewish businesses in multicultural Riga after the First World War
Text
After the First World War, Riga was a multicultural city. The city’s Jewish community grew, both in absolute terms and as a percentage of the population. Historically, Riga had not been a major centre of Jewish settlement within the Russian Empire. That changed under the reign of Tsar Alexander II (1855–1881), when it became easier for well-educated Jews to settle in Russian cities. The 1913 Riga census recorded that 7% of the city’s population were Jewish.1 Large waves of migration were prompted by the civil war after the Russian Revolution (1917–1921), by ongoing food shortages in the new Soviet Republic, and by the Soviet security forces’ persecution of the formerly prosperous middle and upper classes. Many of the Jewish people who had been evacuated from Riga to Russia during the First World War returned. Jewish refugees from neighbouring Russian provinces also came to Latvia. As a result, by 1925 Riga’s Jewish community had grown to 11.68% of the city’s population.2
The capital of the new, democratic Republic of Latvia offered myriad opportunities for businesspeople and entrepreneurs. Latvia’s Jewish minority played a key role in reviving the country’s export and manufacturing sectors in the 1920s, which had suffered greatly during the war: the blockade of the Baltic had obstructed all trade, and in 1915 the Russian military administration had evacuated all industry out of Riga. Most of the machinery was never returned, so that after the First World War, Riga’s manufacturing sector had to start over virtually from scratch. Jewish entrepreneurs were central figures in the fledgling republic’s business world, owning 48% of commercial and 26% of industrial enterprises in 1925.3 So Laima was by no means exceptional among Latvian companies in the 1920s.
The capital of the new, democratic Republic of Latvia offered myriad opportunities for businesspeople and entrepreneurs. Latvia’s Jewish minority played a key role in reviving the country’s export and manufacturing sectors in the 1920s, which had suffered greatly during the war: the blockade of the Baltic had obstructed all trade, and in 1915 the Russian military administration had evacuated all industry out of Riga. Most of the machinery was never returned, so that after the First World War, Riga’s manufacturing sector had to start over virtually from scratch. Jewish entrepreneurs were central figures in the fledgling republic’s business world, owning 48% of commercial and 26% of industrial enterprises in 1925.3 So Laima was by no means exceptional among Latvian companies in the 1920s.
_ Laima_, or Makedonija as it was originally known, was founded in Riga in 1921. The company’s founders renamed it Laima in 1925, presumably to improve its image and sales by having a Latvian-sounding name. According to its 1925 statutes, Laima’s goals were to “operate a chocolate and confectionery factory” and “conduct trade in its own and third-party chocolate and confectionery products in Latvia and abroad.”4
The Laima clock in Riga today. Katja Wezel, CC BY-SA 4.0
The Laima clock in Riga today. Katja Wezel, CC BY-SA 4.0
Personas aplieciba [identity card application] of Dāvids Moševičs, showing his year of birth: 1891; ethnicity: Jewish; citizenship: citizen of Latvia; as well as his previous status as a refugee from the Bauska region. See personal file of Dāvids Moševičs, Latvijas Valsts Vēstures Arhīvs [Latvian State Historical Archive] henceforth LVVA 2996-12-29454, p. 1. Latvijas Valsts Vēstures Arhīvs, Free access - no reuse
Personas aplieciba [identity card application] of Dāvids Moševičs, showing his year of birth: 1891; ethnicity: Jewish; citizenship: citizen of Latvia; as well as his previous status as a refugee from the Bauska region. See personal file of Dāvids Moševičs, Latvijas Valsts Vēstures Arhīvs [Latvian State Historical Archive] henceforth LVVA 2996-12-29454, p. 1. Latvijas Valsts Vēstures Arhīvs, Free access - no reuse
Text
Five of Laima’s six founders were Jewish – David Moschewitsch (Dāvids Moševičs), Gerson Preil (Gersons Preils), Elja/Ilja Fromtschenko (Ilijas Fromčenko), Ilja Kopilow (Iljas Kopilovs) and Joseph Segall (Josifs Zegals) ¬– and the sixth was a Baltic German, Jakob Ahrens (Jēkabs Ārens); all six were citizens of Latvia.5 David Moschewitsch served as general manager and director of the Laima factory. Originally from the Bauska region, he had come to Riga as a refugee after the end of the First World War. Elja Fromtschenko came from the Pskov region, while Joseph Segall, Gerson Preil, and Jakob Ahrens were born in Riga. Ilja Kopilow’s origin is unknown.
The involvement of Jakob Ahrens, the sole Baltic German among the founders, may initially seem surprising. According to his Latvian passport, he was a bookseller by trade.6 The document shows that he travelled a lot, especially to neighbouring Estonia, and it is possible that he also worked for Laima as an agent. Due to Latvia’s close ties with the three historical Baltic provinces of Estonia, Livonia, and Courland, and German’s centuries-old status as the language of the upper classes, it often served as a lingua franca in the interwar years and was used for international, bilateral dealings. Ahrens may have had business contacts in Estonia from his earlier work that were useful for Laima.
A/S Laima, Laimas Mokka pupiņas ir vienmēr tās labākās [Joint-stock company Laima, Laima mocha beans are always the best], artist unknown, ca. late 1920s. Latvijas Nacionālā bibliotēka, Plakāts Latvijā Kolekcija [Latvia posters collection]. Latvijas Nacionālā bibliotēka, Free access - no reuse
A/S Laima, Laimas Mokka pupiņas ir vienmēr tās labākās [Joint-stock company Laima, Laima mocha beans are always the best], artist unknown, ca. late 1920s. Latvijas Nacionālā bibliotēka, Plakāts Latvijā Kolekcija [Latvia posters collection]. Latvijas Nacionālā bibliotēka, Free access - no reuse
A/S Laima, Rīgā sportistiem - Tikai Laima [Joint-stock company Laima, For athletes from Riga - only Laima], artist unknown, ca. late 1920s. Latvijas Nacionālā bibliotēka, Plakāts Latvijā Kolekcija [Latvia posters collection]. Latvijas Nacionālā bibliotēka, Free access - no reuse
A/S Laima, Rīgā sportistiem - Tikai Laima [Joint-stock company Laima, For athletes from Riga - only Laima], artist unknown, ca. late 1920s. Latvijas Nacionālā bibliotēka, Plakāts Latvijā Kolekcija [Latvia posters collection]. Latvijas Nacionālā bibliotēka, Free access - no reuse
A Latvian confectioner with Jewish owners and global business partners
Text
Laima thrived in the years after its founding. Prior to being nationalized in 1936, it employed between 500 and 600 workers and had an annual turnover of 2.2 million lats, equivalent to around 9.4 million US dollars in today’s money,7 which made it one of Latvia’s largest and most successful companies. There were Laima stores in all major Latvian towns and cities, and the company ran large-scale advertising campaigns with glossy posters to drive sales. The Jewish and German owners clearly felt a strong connection to the new republic, which was why Laima packaging featured pictures of Latvian landmarks or a map of Latvia to help foster a sense of national identity among their customers.
„Dzimtene“ rūgta šokolāde: šokolādes tāfelītes iepakojums [Dark chocolate "Homeland": chocolate bar packaging], „Laima“, in Latvijas Nacionālā bibliotēka, Sīkiespieddarbu krājums [Collection of small works], S/334. Latvijas Nacionālā bibliotēka, Free access - no reuse
„Dzimtene“ rūgta šokolāde: šokolādes tāfelītes iepakojums [Dark chocolate "Homeland": chocolate bar packaging], „Laima“, in Latvijas Nacionālā bibliotēka, Sīkiespieddarbu krājums [Collection of small works], S/334. Latvijas Nacionālā bibliotēka, Free access - no reuse
Text
Right from the start, Laima was also keen to sell its products abroad. Key export markets were the United Kingdom, South Africa, the Netherlands, Morocco, France, Sweden and the USA.8 The company’s historical records show that the management often availed themselves of Jewish business contacts in these countries. London was traditionally Riga’s most important trade partner, followed by Hamburg. However, the company’s records show that Laima stopped shipping its products via Hamburg after the Nazis came to power in 1933. Instead, it focused on export markets that it could access through London.
“Latvia for Latvians!”: the nationalization of Laima in 1936 and the emigration of its founders
Text
During the Great Depression in the early 1930s, many Latvian companies fell into financial difficulties. Laima’s factory was located at Karolines iela 22/24 (from 1937: Miera iela 22), around two kilometres north-east of the old town and the iconic Laima Clock. Before the First World War, it had been used by Ferdinand Mülhens’ Cologne-based perfumery 4711 to manufacture eau de cologne and other perfume and soap products for the Russian market. After the war, the factory site was owned by the Beaucamp family from Kassel, who sold it on to the founders of the Laima company. Since they could only afford half the purchase price, they agreed to repay the remaining debt in twice-yearly instalments of 10,000 lats (including interest).
After the global economic crisis, the Latvian government – seeking to protect the country’s currency – placed restrictions on transferring money abroad, and from 1934 onwards the Latvian central bank, Latvijas Banka, would no longer allow Laima to service its foreign debts.9 On top of that, Latvia retained the
gold standard
gold standard
The gold standard became the dominant monetary system in the second half of the 19th century. Central banks held gold reserves (typically, equivalent to one third of the coins and notes in circulation in the respective country) to stabilize the value of their currency. After the First World War, most of the newly founded states in Eastern Europe likewise introduced the gold standard for their new national currencies. Among them was Latvia, with its new currency the lats. Following the global economic crisis, countries gradually abandoned the gold standard, as it made it far more difficult to implement fiscal countermeasures, with the United Kingdom departing from it in 1931 and other countries soon following suit. Latvia, whose fiscal policy took its cue from France and Switzerland, was one of the last European countries to retain the gold standard, only dropping it in 1936.
until 1936 and refused to allow its currency to devalue, something that Britain and almost all other European countries had done to stimulate exports. This increased the value of the lats and made Latvian products more expensive abroad. The price of Latvian chocolate for importers almost doubled. On 4 August 1933, the Continental Chocolate Supply Co. complained in a letter from Cape Town, South Africa, that
Text
“the 23 Cases mentioned therein, duly arrived in good order, but landed at too high a cost to us on account of your increased price. This we recognise at the moment as something that cannot be helped, and we hope this will be remedied by your coming off the Gold Standard as Estonia has done. As things are at the moment, we are, strictly speaking not making on your lines, due to no fault of yours we admit.”10
Text
On 15 May 1934, as a result of a coup in Latvia, Prime Minister Kārlis Ulmanis assumed unchecked authoritarian power. After abolishing democratic structures and taking control of Latvia’s political, cultural, and scientific institutions, the Ulmanis regime began nationalizing key industries under the slogan “Latvia for the Latvians.”
To remain liquid and keep up the interest payments on the company’s outstanding German debts, from the mid-1930s Laima’s management was increasingly forced to work with state-owned Latvian banks such as the Latvijas Kreditbanka. On 3 October 1935, Ulmanis’s cabinet passed a law allowing the Latvijas Kreditbanka to liquidate all commercial and industrial enterprises that could not meet their financial obligations,11 which paved the way for the bank to seize control of Laima in 1936. When the same fate befell the chocolate maker Riegert in 1937, the two nationalized companies were merged. To this day, Laima describes itself as founded in 1870, which was actually the date of Riegert’s founding.
Passport of Elja Fromčenko showing his year of birth: 1887 and place of birth: Pskov Guberniia; ethnicity: Jewish and citizenship: citizen of Latvia. See personal file of Elja Fromčenko, LVVA 2996-6-12693, p. 1. Latvijas Valsts Vēstures Arhīvs, Free access - no reuse
Passport of Elja Fromčenko showing his year of birth: 1887 and place of birth: Pskov Guberniia; ethnicity: Jewish and citizenship: citizen of Latvia. See personal file of Elja Fromčenko, LVVA 2996-6-12693, p. 1. Latvijas Valsts Vēstures Arhīvs, Free access - no reuse
Text
Laima’s Jewish founders emigrated to Palestine. Elja Fromtschenko had already moved to Palestine in either 1932 or 1933 – the precise date is unclear from the files – and began marketing Laima confectionery there. In 1934, he co-founded the Jewish business Elite Palestine Chocolate & Sweets Manufacturing Co. Ltd. in Ramat-Gan, Tel Aviv. His Riga business partners joined him after they too emigrated, bringing machines from Riga to Palestine for use in the new Elite factory. Elite maintained business ties with Laima under the latter’s new, Latvian management and imported ingredients from Latvia that were difficult or impossible to obtain in Palestine, such as cherry juice.12 Laima continued to operate as a state enterprise, initially owned by the Latvian government and later passing to Soviet control. After Latvia regained its independence in 1991, Laima was privatized again. It was sold in 2014 to the Norwegian Orkla Group and is now the largest confectionery maker in the Baltic region.
