After the Finnish Civil War in 1918, Finland emerged as a republic, choosing a democratic path despite deep divisions. Although the parliament initially voted to establish a monarchy, appointing German prince Frederick Charles of Hesse as king, Germany’s defeat in World War I made this plan unfeasible. In 1919, Kaarlo Juho Ståhlberg was elected Finland’s first president, cementing its status as a capitalist democracy.
Agrarian Reform and Society
In the 1920s, Finland underwent significant agrarian reforms aimed at dismantling large estates held by the nobility and redistributing land to peasants. This created a class of small farmers who became strong supporters of the new republic, helping stabilize the country.
Diplomacy and International Relations
Finland became a member of the League of Nations in 1920, establishing its international position as a newly independent nation. A major diplomatic issue arose over the Åland Islands, a Swedish-speaking region that sought to join Sweden. The League of Nations settled the dispute, granting Finland sovereignty over the islands but also granting them autonomous status, allowing the residents to preserve their language and culture.
Politics and Extremism
Political tension remained high in the aftermath of the civil war. In 1929, the Lapua Movement, a proto-fascist and ultra-nationalist group, gained popularity by capitalizing on anti-communist sentiment. However, following an attempted coup in 1932, the movement was banned, and its leaders were imprisoned.
Relations with the Soviet Union
Finland’s relationship with the Soviet Union was fraught with border tensions, but the Treaty of Tartu in 1920 settled some issues. Finland gained Petsamo, but gave up its claims to East Karelia. Despite this, relations with the Soviets deteriorated in the 1930s. Finnish radicals who moved to Soviet Karelia to build a socialist society were largely executed during Stalin’s purges. By the late 1930s, the Soviet Union imposed tighter restrictions on Finland, including blocking Finnish navigation between Lake Ladoga and the Gulf of Finland.
Global Depression
The Great Depression of the 1930s had a profound impact on Finland’s economy. Like many countries, Finland faced a sharp economic downturn as global trade collapsed. The prices for wood, paper, and timber, which were key Finnish exports, plummeted, leading to unemployment and widespread economic hardship. Finnish industry, especially in forestry and manufacturing, was heavily dependent on exports, and the decline in international demand hurt the economy significantly.
In response, the Finnish government implemented austerity measures and sought to reduce public spending, though these moves were insufficient to offset the depression's effects. Recovery was slow, but Finland's strong agrarian sector helped cushion the blow, as much of the rural population remained self-sufficient in food production.