1940: Sweden

Foreign Relations.

Continuously throughout the year 1940, Sweden experienced an almost uninterrupted series of international crises, which threatened but did not destroy its independence. The Government remained firm in its policy of complete neutrality, reinforced by a resolute national will to use the country's armed forces vigorously if attacked. Sweden, however, saw its freedom of choice in international matters slowly disappear. The Soviet campaign in Finland was viewed as a serious threat to Swedish security, and the population enthusiastically supported a policy of unlimited private assistance for the Finns; many 'activists' even urged discarding Swedish neutrality in favor of direct military intervention.

When the European war was extended to Norway on April 9, Sweden also saw itself imperiled, but at that time the country was not free to aid its sister nation as it had aided Finland. Sweden had already sent a good share of its surplus resources to the Finns, and Stockholm realized all too well that it would be suicidal to help Norway in its struggle against Germany unless Swedish assistance could be decisive. The Government, therefore, took the position that the war in Norway was essentially a contest between Germany and Britain, and applied the same principles of neutrality which had guided its policy toward those belligerents from the start of hostilities in September 1939. After the German conquest of Norway, Sweden remained cut off from the western world, and found it necessary to deal with Germany and Russia on practically whatever terms those two Powers were inclined to offer. It was almost entirely dependent on them for essential imports of food, raw materials, and industrial products; it was soon threatened with financial dependence on them, moreover, because Swedish exporters were unable to maintain existing foreign exchange by disposing of their commodities abroad. The only remaining outlet for Sweden's overseas trade was the small Finnish Arctic port of Petsamo, which was not even adequate to handle Finland's own commercial needs. Politically, Sweden found it expedient to exercise extreme discretion in its policy toward the two powerful neighbors whose will it was in no position to oppose, but Swedish democracy remained strong and unshaken.

Russo-Finnish War.

The big problem for Sweden as the year opened was Soviet Russia's aggressive war on Finland, which the Swedes regarded as only a step in the renewal of Russia's historic drive for an ice-free port on the Atlantic. As Prime Minister Per Albin Hansson told the Riksdag (Parliament) on Jan. 17, in order to save Finland Swedish youths were giving their lives, workers their wages, and the poor their last pennies. On Jan. 15, both the Swedish and Norwegian Governments published the texts of firm notes in which they rejected a Soviet communication of Jan. 5, charging that Sweden and Norway were violating their neutrality by aiding the Finns. Sweden, however — and subsequently Norway — refused to permit the passage of Allied troops en route to Finland, since German spokesmen had repeatedly warned that the presence of hostile forces in Scandinavia would not be tolerated. Alarmed over the danger of becoming a battlefield for the Western Powers, and disturbed by Russian successes on the Karelian Isthmus after Feb. 1, Sweden served early in February and again in March as intermediary for peace negotiations between Helsinki and Moscow. The Swedish Government refused specific Finnish requests for military assistance — on Feb. 1, 13, and 24 — but announced that increased quantities of supplies and numbers of volunteers might leave the country. By March 13, when hostilities between Finland and the U.S.S.R. ceased, Sweden had given the Finns arms, food, clothing, credits and cash valued at more than 500,000,000 kronor (about $120,000,000), while 8,700 Swedish volunteers were serving in Finland and about 5,000 more had enlisted. (See FINLAND.)

Relations with Germany.

The German invasion of Denmark and Norway created even greater dangers for Sweden, and virtually the entire population gave unqualified support to the Government's strict neutrality policy. For the duration of the Norwegian campaign, the Swedes abandoned party politics in order to assure national solidarity in the emergency. Although Sweden sent large amounts of food, clothing, and medical supplies to the stricken areas of Norway, it withheld all forms of material aid which would have strengthened Norway's ability to resist the German advance. When military operations approached disturbingly close to the Swedish border near the Narvik railroad, Sweden sought the consent of both belligerents to pacify northern Norway through a provisional occupation of the area by Swedish troops. No action had been taken on the proposal, however, when Norway finally collapsed, with the cessation of military resistance on June 10.

Sweden's difficult position vis-à-vis Germany was strikingly indicated on July 5, when the Swedish Foreign Office revealed that it had permitted the Reich to transport war materials and troops to Norway on Swedish railroads. Although the Swedish Government had refused to grant transit privileges to either belligerent during the war in Norway, in July it explained that further resistance to German demands could no longer have benefited the Norwegian people.

Sweden, however, soon showed that it was not prepared to submit to endless domination of any Power without resistance. In Stockholm the people reacted violently during the second week in July to a suggestion, made by Nazi leader Alfred Rosenberg at a press conference in Berlin, that Sweden should form part of a permanent Germanic-Nordic federal union. Swedish newspapers boldly answered Nazi press charges that Sweden's semi-official news agency Tidningarna Telegrambyra was giving preferential treatment to Anglo-American accounts of the war. The liberal Dagens Nyheter summed up the Swedish view on Aug. 9, with the firm statement: 'We cannot give one belligerent a monopoly of information.' Although the Swedish Government avoided unnecessary provocation of Germany by confiscating several issues of Swedish papers with outspoken editorials criticizing the Reich, in September it took similar action against the daily Nazi propaganda sheet Dagens Eko, and three months later confiscated the Dec. 20 and Dec. 28 issues of the same publication.

Defense Measures.

Military preparations were the central interest of Swedish national life in 1940 — especially after the Russo-Finnish war ended and German troops entered Denmark and Norway. Preparedness measures included the raising of the conscription age from 45 to 46, establishment of a home defense corps of 50,000 men and boys, and the expansion of two women's auxiliaries to aid in directing evacuations and civilian services. The air corps and coastal defenses were strengthened. A defense loan of 500,000,000 kroner (almost $120,000,000) was oversubscribed, with widespread popular support, by Aug. 2 instead of Nov. 1 as originally planned. On Aug. 2 the Riksdag convened in extraordinary session to consider additional emergency measures and appropriations necessary to carry out the defense program. It was disclosed, on Dec. 29, that total defense expenditures for the year amounted to almost 2,000,000,000 kroner (over $475,000,000). The Government's joint policy of strong defenses and non-participation in the war was fully endorsed in the elections of Sept. 15, which were conducted gravely, without the usual fanfare and keen party rivalry. Gaining 19 new seats, the Social Democrats now have a clear majority of 134 in the Lower House, while the governing coalition (including also 42 Conservatives, 28 Agrarians, and 23 Liberals) controls 227 of the 230 seats.

Economic and Commercial Conditions.

As a result of emergency expenditures, rising prices, shipping losses and trade curtailment, Sweden's national debt rose 58.8 per cent during the first nine months of 1940. Higher taxes and state borrowing, moreover, tended to reduce civilian consumption and so to cause a decline in industrial output. While industries engaged in production for defense expended their activity, a serious recession struck the paper, pulp, timber, and building industries, as well as most enterprises concerned with processing foreign raw materials. The extension of war in April, May, and June cut off markets which in 1938 had absorbed more than 70 per cent of the total value of Swedish exports, and sources of supply which had normally provided vital imports. To overcome some of the economic difficulties resulting from its commercial imprisonment, Sweden signed extensive trade treaties with Germany on July 10 (supplemented by another agreement in December), with Nazi-controlled Norway on July 12, and with German-dominated Denmark on the same day. Other agreements were concluded with Finland in August, and with the Soviet Union and Hungary in September. Trade talks with Italy in November arranged for continuation of the 1935 clearing agreement between the two countries. These commercial arrangements eased Sweden's economic distress somewhat — particularly provisions for the importation of coal and coke from Germany — and as the year ended, the country was rapidly adjusting itself to its enforced isolation. See also SOCIALISM, and WORLD ECONOMICS.