The World War

THE WORLD WAR The World War broke out. To meet the needed expendi ture a war tax was levied on all incomes above a certain amount. It was widely, but quite erroneously, believed that Sweden had entered into a treaty with Germany. Sweden issued a declaration of neutrality. The fleet endeavoured to prevent any military operations within Swedish territorial waters.

The Problem of Neutrality.

As the blockade against Ger many was intensified, an increasing amount of Swedish goods were detained in England. The black lists of the belligerents, trade espionage and the attempt to force extensive undertakings from importers in neutral countries induced the Swedish Government to put a proposal for a War Trade Law before the 1916 Riksdag, under which no undertakings with belligerent Powers could be made without the sanction of the official Swedish authority (Trade Commission). (If this officially recognized undertaking were broken the culprit was severely punished.) Special arrangements were made with the belligerent countries regarding compensation for permission to transport goods. Britain desired to transport over Sweden goods necessary to Russia, and Sweden granted transport licences in return for permission from Britain to import certain foodstuffs and other goods from the west. In Jan. 1915 the Government forbade the transport over Sweden of arms and other war material. Pourparlers between the Swedish and Brit ish Governments with the object of improving trade communica tions between the two countries led to no result. Disputes arose over the British postal censorship and the closing by Sweden of a channel in Oresund. The difficulties brought the three Scandi navian countries into closer touch. In Dec. 1914, King Gustav invited the kings of Norway and Denmark to a conference in Malmo which inaugurated a period of greater friendship.

Many legal and administrative innovations were made. In a moratorium for debts was introduced, but was soon abolished. Special laws empowered the Government to fix a maximum price for food and other necessities and if necessary to commandeer them. A War Insurance Commission was set up to give state aided insurance against loss at sea, a Food Commission to take over the import of grain, etc., an Industry Commission to report on industry and later to ration raw materials, etc., an Unemploy

ment Commission, and a Trade Commission to carry out the war trade laws. In Nov. 1915 the first maximum prices were fixed (for grain). A bad fodder harvest and the difficulty of importing maize and other foodstuffs necessitated a great slaugh ter and export of cattle.

Some circles sympathized with Britain, others with Germany, but nearly all desired neutrality. A little group of "activists" urged intervention on the side of Germany.

The Blockade.--On

July 7, 1916 Britain and France ceased to apply the regulations of the Declaration of London regarding neutral trade. The German U-boat warfare was intensified ; the closed areas in the North Sea and the blockade of the Central Powers by the Allies created a situation little in accord with in ternational law. During the war 280 Swedish merchant vessels were sunk, chiefly by German submarines, but also by mines and from other causes. The English ports were crowded with confiscated goods. After the Russian revolution in 1917, Britain no longer needed to transport goods over Sweden to Russia; so this means of bargaining fell away.

Negotiations with Britain for import licences led in the spring of 1917 to a temporary agreement whereby Sweden was guaran teed certain imports (including grain) in return for the release from the Baltic of a number of imprisoned vessels belonging to the Entente. Swedish vessels were requisitioned (or were only allowed to sail in Swedish interests on condition that they were replaced by other vessels when required). Finally a com mercial agreement was concluded in the spring of 1918, which enabled Sweden to import large consignments of goods in return for handing over merchant vessels up to 400,000 tons dead weight ; a certain proportion of the Swedish iron ore export ; longer credit for goods purchased in Sweden, and stricter regulations regarding exports to Germany. The increasing difficulties of nagivation in the North sea and the insignificant export from Britain to Sweden, led to an expansion of trade with Germany. Before the War Sweden obtained 91% of her coal from England but during 1916-17 only 27-26%. The remainder was almost entirely sup plied by Germany. The dislocation of trade thus largely influ enced Sweden's policy.