861.00/5197: Telegram
The Chargé in Sweden (Wheeler) to the Acting Secretary of State
[Received September 11, 11:20 p.m.]
4060. Your telegram number 1673 of July 17, 6 p.m.46 Following is Legation’s estimate of the present situation in the Baltic Provinces. A struggle is going on between the more stable elements, morally supported by the Allies, and to some extent assisted by them with men, supplies and ammunition, on the one side and Bolshevism on the other. Finland has thus far overcome Bolshevik tendencies and if Stahlberg47 proves strong enough to assemble its elements of strength and tactful enough to placate factions it will become stabilized. This seems likely to be brought about but to just such an extent would Finnish cooperation in any campaign in Bolshevik territory, such as the taking of Petrograd, appear less probable. For [Page 708] this reason Finland, though forming such an integral portion of the Baltic region, may be eliminated from the present consideration. Lithuania also from a political, military and financial standpoint is at present almost a negligible quantity, the fighting there on both the Lithuanian and Bolshevik sides having been little more than bushwhacking with troops of the lowest class. The problem of Bolshevism in the Baltic Provinces narrows down, therefore, mainly to the situation in Esthonia and Latvia.
- 1st.
- Political: Esthonia has driven out the Bolsheviks, but only by adopting policies of its own which are almost Bolshevist, and the mass of its people are indifferent. The formation of the Russian Northwestern Government seems to have been intended, in great part, to insure the military cooperation of Esthonia against the Bolsheviks in Soviet territory, but even should this object be attained it seems doubtful whether the assistance rendered would be more than half-hearted. In Latvia, since the partial withdrawal of the German forces, which cleared the country of the Bolsheviks, the Government finds the struggle against Bolshevism increasingly difficult as the Lettish forces have poor organization and poor equipment.
- 2d.
- Naval and military: The control of the Baltic and the Finnish Gulf is in the hands of the British naval forces assisted by the Finnish and Esthonian navies and several French destroyers and gunboats. Italy recently decided to send a light cruiser to cooperate. The Bolshevik fleet is considered of little value except for defense and there is an effective blockade of Petrograd and the coast of the Finnish Gulf held by the Bolsheviks. The main anti-Bolshevik military force is the Esthonian Army, which is composed of good fighters and is better equipped than the Russian forces of Yudenitch. The latter’s Russian northern corps recently reduced by desertions to 13,000 men has heretofore lacked everything but is now being furnished by the British with guns, ammunition and other equipment including tanks and aeroplanes. Prince Lieven48 has transferred his 3,000 volunteers to Narva to cooperate with the forces there. These, which are well officered and experienced, constitute a force which is anti-Bolshevik but on the other hand pro-German and presumably under control of reactionary elements in Berlin.
- 3d.
- Economic and financial: the economic situation could scarcely be worse. While Finland has paid the United States in full for all food by using credits in American banks, practically all Latvia’s exports of flax and timber are mortgaged to Great Britain and Denmark for purchases. American food supplies have been delivered [Page 709] on a like promise to pay, security being furnished in the form of natural resources. The situation is as bad in Esthonia which has negotiated loans and credits in the sum of £400,000, nearly half of which has been already covered by exports of flax and timber. It has received, moreover, military supplies from Great Britain aggregating £1,350,000, for which it intends to pay when it is able. It has received American food supplies on the same conditions in all save food, however, which the American administration has supplied, and military supplies. The lack of necessities in both Latvia and Esthonia is enormous. The immediate requirement is clothing, shoes, agricultural implements and dairying machinery. Railroad equipment is bad and there is no coal. The Baltic Provinces are all in desperate need of loans or credits and the nations which supply these should establish their own markets there. Present conditions, however, appear too precarious to justify such a course by American authorities [bankers?]. The financial situation seems well nigh hopeless, lacking aid. There is much worthless money with no fund of gold and imports cannot be covered by export balance against which credits can be established.
- 4th.
- Industrial: in both Esthonia and Latvia, through German stripping and lack of raw material, industry has been largely paralyzed and there is general non-employment.
Generally speaking the situation in the Baltic region can be summed up as follows: Finland has not yet passed the experimental and hazardous stage and the danger is by no means passed of a revival of Finnish Bolshevism. In Esthonia and Latvia German prestige is far greater than Allied. Military success against the Bolsheviks depends primarily on authority [on munitions?] and aid which may be given the Esthonians and Letts by the Allies or the friendly nations [or the Germans?]. It is still an open question to which these people will turn for this support. Lacking such support the Bolsheviks, if Denikin meets with serious reverses, are not unlikely to overrun the whole Baltic region. American Mission’s 401.