1942: Sweden

On her west, a Scandinavian land persecuted by German invaders; on her east, a Scandinavian nation accepting German aid against Soviet attacks; on her southwest, a Scandinavian people resisting German conquerors: this is Sweden the neutral of the north in 1942. But no neutral toward brutality, not silenced, her government and her people found ways in the past year to declare unequivocally their sympathy for the coerced and their opposition to the coercion.

Geographically, the pivot of Finland, Norway and Denmark, Sweden sees her role in the words of her Foreign Minister, Christian E. Günther, on Nov. 7 to the Riksdag (Parliament): 'It is a realistic task for Sweden to be the link holding the Northern peoples together.'

The continuance of the war, though it gives Sweden larger opportunities to evidence humanitarian generosity to suffering neighbors, increases the severity of life for her people and the complexities before her government. Last winter (1941-'42) was probably Sweden's most severe season since the 'Poltava' winter of 1709. Rations tightened, due to small imports and to successive years of poor crops: less fat was allowed in milk; potato flour and flakes were limited; meat allowances were reduced (meat cards were introduced in restaurants); the entire crop of brown beans went to the Army. Coffee was limited to half a pound a week. While fish, potatoes and other root vegetables were not rationed, fish prices were high due to mines, pack-ice and danger from torpedoing. Bread rations fell in January; clothing ration cards were issued, though shoes were not rationed.

As the months passed, though crop prospects were encouraging, the pressure grew. In October, plans were on foot to ration fish. On Nov. 1, low reserves of water for power and scarcity of fuel forced the rationing of electricity to industries (since October it was apportioned for homes, stores and streets); and need of men for fuel cutting forced the Government to announce that in 1943 it would call men ahead of their military service for forestry work.

The Government has been unified. On Jan. 12, King Gustaf in a speech from the throne opening the Riksdag, announced a new Five-Year Defense Plan. Explaining this later, Defense Minister Per Edvin Sköld said that by the end of 1947 it would provide Sweden with a top-ranking motorized army with heavy tanks, more heavy artillery, increase of anti-tank units; rifle clubs would train with machine guns and automatic rifles; officers would come from all ranks; the class of 1940 would be retained six months after their year of training. The navy would have more ships, provided with more effective offense equipment, including submarines (now building), improved destroyers, new torpedo boats, a third 7,000-ton cruiser. There would be a new coast artillery regiment at Gothenberg. New planes and an enlarged air force were provided for; other features were included. This plan, estimated to cost 755,000,000 kronor was laid before the Riksdag on April 9; on June 18, by large majorities in both Chambers, the plan was accepted in principle, with no dissent on giving Sweden strengthened defense in the present war.

Steadiness, with audacity for freedom's sake, characterized her people, her social leaders and groups, her Church, her press. Late in the year, on Sept. 26, in municipal and provincial elections (1,434,231 votes out of 2,285,839) the Social Democratic Party was returned to power.

On Apr. 9, the Swedish nation recognized the second anniversary of Germany's invasion of Denmark and Norway, in public meetings, in pulpit and press. Said one paper in respect to the invasion, it was 'the blackest day in the history of the North'; another's editorial was 'The Disaster Month.' Through the year despite fulminations from Berlin, Swedes in all kinds of groups held meetings, passed resolutions, made speeches in accusation of Germany's behavior. A firmness to accept war deprivations was manifest. A defense loan in April 1940 raised over 799,000,000 kronor; a second loan in July 1941, 603,000,000 kronor; a third opened in January 1942 had by mid-August produced over 1,000,000,000 kronor.

Some 20,000 Finnish children are being cared for. The Swedish-Norway Relief Society is feeding 250 to 300 children daily in Oslo; it plans to extend its work and budget to about $100,000 a month. The 'Save the Child' movement has Swedish sponsors for about 3,000 Norwegian children; $15,000,000 was raised in Sweden for Finnish Relief; efforts are under way to increase Sweden's $4,500,000 for Norway to a like amount. Also in Greece, Swedish agents are administering relief. Official aid included in October a new trade agreement with Denmark; in November, a new trade pact with Finland.

In the fields of trade, industry, shipping, courage is manifest. Swedish imports and exports in the first six months of 1942 dropped below those of the same 1941 period, in each category a decline of roughly 200,000,000 kronor. But both imports and exports rose in May and June 1942. Difficulties faced by industry were countered by accomplishments: in October a process for making rubber from wood (useful for most purposes except motor car tires) was announced. During the year a newly electrified stretch of railway was opened, giving Sweden the longest continuous electrified rail line in any country, about 1,252 miles. In shipping, Sweden since the outbreak of war, had lost by late October 164 ships (700,000 tons) and 987 lives; but she is steadily replacing the vessels, having launched 161,000 gross tons in 1941. More could be built if Germany could keep her promises to supply steel.

In relationships with the United States and Great Britain, bonds have been strengthened. The former accredited Mr. Herschel Johnson as new Minister late in 1941. The British press gave more favorable attention to strong statements of Swedish policies as evidenced by her leaders and people. A Swedish bishop, Brilioth, was awarded the Lambeth Cross in Westminster Abbey by the Archbishop of Canterbury. Under agreement with these two powers and with Germany, Swedish safe conduct vessels, with losses of eight since January 1941, continue their trade. And Swedish ships are on the high seas with relief for stricken lands, or carrying exchanges of officials and private citizens between belligerents.

Beloved of his people and honored throughout the world, the Swedish king, Gustaf V, celebrating in June his 84th birthday remained the symbol of his ancient country, unenfeebled, wise in government, conscience-led.

1941: Sweden

Virtually cut off from foreign countries by the double British-German blockade at the beginning of 1941, Sweden was completely surrounded by warring countries after June 28. It had to deal with persistent demands from belligerents, as well as with domestic problems arising from insecurity and shortages of vital commodities.

National Defense.

At the opening of the Riksdag on Jan. 11, the defense outlay for the fiscal year beginning July 1, 1941, was estimated at 1,800,000,000 kronor (about $400,000,000). On Jan. 19 civic meetings were held throughout the country to win support for a new defense loan of 500,000,000 kronor, and Vice Admiral Fabian Tamm announced that one ship a week would be added to the Swedish Navy during the first half of 1941. Plans for the entire year included completion of 36 mine sweepers, 8 motor torpedo boats, 2 new destroyers, and doubling of the submarine fleet. On the other hand, Sweden was forced to sell two of its largest ships to belligerents. The Stockholm, which was built in Italy, was sold to the Italian Government early in November, because no arrangements could be made for delivering it to Sweden. The Kungsholm, 20,067-ton motor ship, was taken over by the United States in mid-December. The worst naval disaster in Sweden's history occurred near Stockholm on Sept. 17. Explosions sank three of the most modern destroyers (which had cost about $2,000,000 each), killing 31 sailors and wounding 12.

Domestic Precautions.

As the Russo-German war approached, the Swedish Government took special measures to safeguard its security at home. Swedish police, at 6 a.m. on June 4, began simultaneous raids on Communist centers throughout Sweden, including the Headquarters of the Communist party in Stockholm and the offices of Ny Dag, the leading party newspaper. The raiders removed large quantities of documents, and detained about 20 Communists. The police made new attacks on pro-Soviet groups in July, accusing them of participating in an international organization which delivered explosives for sabotage against shipping.

A constitutional amendment allowing for censorship in times of war or danger of war, which had been initially passed in 1940, was made a law on June 18. Minister of Foreign Affairs Günther said that he hoped it would not be necessary to use the permission granted in this amendment.

About the same time the Riksdag appropriated 131,000,000 kronor to promote better housing as a safeguard against unemployment. The Government stipulated that there must be no private profiteering or trade union difficulties on Government building projects, and that rents in the new houses must be as low as in similar houses built before the European war. To prepare for possible air raids, Sweden constructed numerous granite-roofed shelters — over 300 in Stockholm alone.

Foreign Relations.

The double blockade of Sweden was not eased until March, when both London and Berlin agreed to let a few ships pass through each month. As Germany's control of the European continent increased, Sweden's neutrality became more precarious in the face of German demands. On April 27, however, when four German soldiers from Norway crossed the Swedish border into the northern province of Vaesterbotten, the neutrality guard interned them. Early in June the Swedish Supreme Court unanimously rejected the demand of four German firms for funds they had deposited in Sweden before the war.

The Russo-German conflict raised many new problems for the Swedish Foreign Office. To prepare for the outbreak of hostilities, Swedish naval officials announced on June 9 that Sweden had mined its territorial waters on the east coast between Stockholm and the Aaland Islands and that all ships going north to the Bay of Bothnia must use the inner passage through the Swedish skerries. On June 25, however, Sweden permitted a division of German troops to pass from Norway to Finland. Britain promptly sent a protest accusing the Swedes of yielding to German pressure.

After Finland had openly joined Germany in attacking Russia, and Sweden had showed unwillingness to cooperate, the German press vigorously criticized Sweden and warned that Finland would assume future leadership in the North. The typical Swedish response to the German editorials was printed in the prominent Labor paper Arbetet of Malmö: 'Sweden has no position of leadership to maintain or abandon. There is no evidence that Finland aspires to one either.' Sweden continued to be in German disfavor throughout the summer, and Germany designated Sept. 1 as the date on which Sweden must close its consulates in Norway, the Netherlands, Luxemburg, Belgium and Northern France, excepting those in Oslo, Delfzijl (Netherlands), Rotterdam, Brussels and Paris. On Sept. 2 Swedish authorities announced that no citizen of Sweden would be allowed to give military service to any foreign country other than Finland. This ruling was made to counter German attempts at recruiting Swedes to serve in one of their military units.

Relations with Finland were considerably better than those with Germany. In spite of its own food shortages, Sweden sent Finland large amounts of food and clothing. On June 29, however, Swedish authorities announced that there would be no independent corps of volunteers sent to Finland and that individuals who wanted to fight for Finland should enroll in Swedish-speaking military units in Finland.

Foreign Trade.

Although the double blockade of Sweden was somewhat relaxed after March, it was a serious handicap to foreign trade throughout the year. Most of Sweden's trade was with Germany and neighboring countries under German domination. In January it was announced that a Swedish-German trade pact had been signed Dec. 14, 1940, to provide for $500,000,000 worth of trade between the two countries during 1941. Sweden had signed a trade treaty with Denmark on Dec. 20, 1940, covering the first half of 1941. Under it, payments were cleared through the German Clearing Office in Berlin. A commercial agreement in June and a supplementary pact signed on July 1 provided for trade during the latter half of the year at the same level as the first half. The main Swedish export was lumber, while the main Danish export was sugar. A Swedish-Norwegian clearing agreement signed April 8 provided for exports of 55,000,000 kronor ($13,000,000) worth of grains and other foodstuffs to Norway and imports of Norwegian products valued at 60,000,000 kronor ($14,280,000).

On April 1, Sweden concluded a trade treaty with Finland, which provided for exports to Finland valued at 43,000,000 kronor and imports from Finland valued at 23,000,000. After the outbreak of the new war between Finland and Russia, Sweden agreed to send Finland additional supplies of iron and steel, rye, wheat flour, butter, potatoes, fats, syrup and molasses, canned meat and vacuum dried rations.

During the first nine months of the year total Swedish exports were valued at 981,000,000 kronor and imports at 1,205,000,000 kronor. Imports exceeded exports considerably during the first five months, but were reduced in the summer, when they just about equaled exports.

Food and Other Supplies.

Despite the many obstacles to foreign trade, Sweden's food consumption during 1941 was estimated at only 20 per cent below that of 1939. It was reported that more bread and vegetables were consumed. The only serious deficiency was in fats, which were cut to half of normal consumption. No smörgasbord could be served in restaurants after July 1. Eggs were rationed after Sept. 24 to allow seven eggs per person each month. Peas and beans were confiscated by the Government for military purposes.

Industrial production fell below expectations, mainly because promised deliveries of coal from Germany were not forthcoming. The iron and cement industries were the chief sufferers. The coal shortage, however, was partially made up by the production of peat. It was estimated that Sweden has over 8,000,000,000 tons of peat reserve, which would have the heat value of 5,500,000,000 tons of coal — enough to meet the country's requirements for 700 years at the present rate of consumption. The lack of fuel for motor vehicles was met by altering their machinery so that they could use charcoal or wood. In August it was announced that at least 100,000 motor vehicles in Sweden were using this type of fuel. In October, however, the Government assumed control of all firewood. Another measure for alleviation of the fuel problem was the distillation of slate oil in spite of the expense of the process. Rubber also was extremely scarce, and Swedes resorted to extensive use of scrap supplies.

As 1941 ended, Sweden was proud of having retained its neutrality, but had little hope of improving its economic or political situation during the coming year. See also FINLAND; NORWAY.

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.

1939: Sweden

National Defense.

The keynote of Swedish preoccupation in 1939 was sounded in the Speech from the Throne on Jan. 11, when King Gustav told the Riksdag (Parliament) of plans for strengthening national defense. On Jan. 7 Sweden and Finland had climaxed their long negotiations to fortify the Aaland Islands (see FINLAND), and the new Swedish budget — presented to the Riksdag on Jan. 11 — included defense expenditures of 238,486,000 kronor (almost $60,000,000). In addition to this original grant, the Riksdag in April voted a supplementary defense grant of 66,550,000 kronor, of which more than 40 per cent was consigned for development of the air force. Upon the outbreak of war in September, a special session of the Riksdag passed additional appropriations totaling 523,000,000 kronor for 'neutrality defense.' At the same time, on Sept. 3, three major contingents were called up to serve in the army, navy, and air force. Thus, at least 879,036,000 kronor — or well over $200,000,000 for a population of 6,300,000 — was appropriated for military purposes during the budget year 1939-1940, and the Swedish army's war-time strength was raised before the end of the year to about 600,000 men. (In 1933-34 Sweden's defense appropriations were only $30,000,000; the country's regular army prior to the crisis in August 1939, numbered 60,000 men.) Meanwhile, great progress had been made ever since the September crisis of 1938, in protecting the civil population against possible air raids on Swedish cities. Many industrial and business establishments furnished underground shelters for workers, and in 1939, the city council of Stockholm appropriated 1,000,000 kronor for public shelters and air defenses.

One important retreat in defense precautions resulted from Soviet opposition to the Aaland fortification plan. Although the Swedish Government on May 9 had proposed in the Riksdag an amendment to the conscription law to permit sending Swedish recruits to defend the Aaland Islands, this proposal was withdrawn on June 3 to avoid antagonizing the U.S.S.R. The Finnish Minister of Defense declared in Stockholm two days later that the original fortification plan (of Jan. 7) would be carried out, but when Sweden refused to give the project further tangible support, it was set aside until December, when the two countries again co-operated to keep Russia and Germany from occupying the Islands.

Relations with Germany.

German-Swedish relations were strained throughout the year. In December 1938, Germany sought to force 'Aryanization' of Swedish concerns with which the Reich had commercial transactions. At that time Swedish business men decided to answer all German inquiries about the race of proprietors or employees in their firms with the single word 'Swedish,' even though these uniform replies might result in considerable loss of German trade. On Feb. 9, 1939, Swedish courts ruled that in the case of debts owed German concerns whose Jewish owners had left the Reich, payment should be made to those owners, rather than to the German Government. The decision explained that Nazi practice was 'so foreign to the Swedish conception of legal rights that it can have no effect on property in this country.' On Feb. 20-22, Sweden joined the other Northern countries at Helsinki (Helsingfors), Finland, in considering what further action could be taken to aid political refugees.

The Swedish, Norwegian, Finnish, and Danish Foreign Ministers convened in Stockholm on May 9, 1939, to discuss Chancellor Hitler's proposal that their governments conclude non-aggression pacts with the Reich (see NORWAY). While each country was left complete freedom to decide its course for itself — and Denmark actually signed a pact with Germany on May 31 — the communiqué from the meeting deplored the conclusion of treaties which might be construed as favoring any power against a possible adversary. In almost identical language with that used by Finland and Norway, Sweden on May 17 declined the German offer.

All of the Scandinavian States suffered heavily when the Reich's submarine campaign got under way in September, but anti-German feeling ran highest in Sweden. On Sept. 24, 25, 28, and 30, German torpedoes sank Swedish merchant ships in rapid succession. The Swedish Government protested vigorously in Berlin against German sinking of the 3,378-ton steamer Nyland on Sept. 28, barely outside Norwegian territorial waters, while the vessel was bound for neutral Belgium with a cargo of iron ore.

Other Effects of the War.

As the Nazi-Soviet rapprochement freed the U.S.S.R. to press its demands on the Baltic States and Finland, Sweden organized resistance against eventual pressure on other small western countries. Partly to strengthen Finnish resistance, partly to assure supplies of needed commodities among all of the Scandinavian States. King Gustav invited King Christian of Denmark, King Haakon of Norway, and President Kallio of Finland to confer in Stockholm on Oct. 18-19. Restating the decisions made at Copenhagen a month earlier (see DENMARK), the rulers agreed to continue consultations and to carry on trade relations with all states.

In December, the press of both Sweden and Norway reflected the alarm felt in these countries that they would be next in Russia's drive to the West. Many Swedish business men and political leaders contributed heavily to the Finnish cause, and before the end of December it was reported that more than 10,000 Swedes had volunteered to serve with the Finnish army. Meanwhile, German spokesmen warned the Swedish Government against permitting war supplies to be transshipped from Britain to Finland. These supplies nevertheless continued, and the secrecy which veiled the British-Swedish trade pact, concluded on Dec. 27, 1939, further irritated the German Government. The Reich feared that British influence in Sweden would cut off its supplies of Swedish iron ore, which became more and more essential as the European War continued. As the year 1939 closed, Sweden — strangely threatened by Russia, warned by Germany, and courted by Britain — found it increasingly difficult to remain at peace. See also WORLD ECONOMICS.

1938: Sweden

The Swedish Government led the other Scandinavian Governments during 1938 in an active effort to avoid involvement in Europe's developing political crisis. It opposed all tendencies toward joining a 'front' of democratic countries against Germany and Italy and instead worked to develop a 'neutral bloc' of Scandinavian states. Meetings between the Foreign Ministers of Sweden. Norway. Denmark and Finland on April 5.6 and May 27 led to a definite declaration of policy on the part of these countries to avoid commitments to either European coalition. Moreover, an agreement to pursue common neutrality rules and policies in case of foreign war was signed on May 27 (see DENMARK). In July and September the seven 'Oslo Powers,' including the four Scandinavian countries and The Netherlands, Belgium and Luxemburg, took steps to avoid involvement in sanctions by the League of Nations.

At the opening of Parliament on Jan. 11, King Gustaf announced the Government's intention to combat future economic depressions through the construction of planned public works. Beginning in 1936, a commission had prepared an inventory of all public works to be executed in the country during the next ten years. These definite plans enable the Government, in case of depression, to carry out without delay such works as are demanded by economic conditions. By enacting laws prescribing an 8-hour day in the merchant fleet and granting all Swedish workers 12 days paid vacation per year, Parliament also introduced important social reforms. The election of county councilors on Sept. 18 constituted a strong vindication of the policies of the Social Democratic Prime Minister, Per Albin Hansson, and his party. The Social Democrats gained an absolute majority of seats, while the liberal Popular Party increased its strength and the Communists won a few seats. The Right, the Peasant's Party, and the Left-wing Socialists suffered considerable losses. Among the noteworthy public affairs of the year was the nation-wide celebration of King Gustaf's eightieth birthday on June 16. A large birthday gift of funds raised by popular subscription was devoted by the King to the fight against infantile paralysis.

Although the pace of business retarded somewhat during 1938, due largely to difficulties in several industries, economic conditions remained distinctly favorable. The remarkable building activity of 1937 was continued, and employment remained at a favorable level throughout the year. Although foreign trade figures declined from 1937, they remained well above those of 1936.

During 1938, the American public manifested interest in Sweden's policies, especially those dealing with labor relations and economic planning. A commission appointed by President Roosevelt to study Swedish labor relations issued a highly favorable report on Sept. 24. American interest was further stimulated by Crown Prince Gustaf Adolf's visit to the United States to take part in the celebration, at Wilmington, Del., of the 300th anniversary of the founding of the Swedish colony in America.