Dollars, diplomacy, and dignity: United States economic involvement in Lithuania, 1914–1940

Abstract

The successful efforts by Estonia, Latvia, and Lithuania to gain independence from the Soviet Union and win diplomatic recognition from the world community during the 1 990s have reawakened discussions of the earlier Baltic campaigns for international recognition and economic investment which took place during and immediately after World War I. Recent works by Alfred Erich Senn and Jan Arveds Trapans allow a new understanding of important social, political, and economic similarities and differences between these two periods in Baltic history, despite their separation by some seventy years.' Scholars who focus on earlier Baltic attempts to achieve foreign recognition and commercial development during the rather brief internar period of independence face a variety of important questions. Among these are: To what extent and in what ways did foreign investment and commercial development affect the viability and security of the Baltic States between the two world wars? How were conflicting economic and political considerations resolved as Western nations negotiated business ventures with the Baltic nations? Could stronger economic ties to the West have made the Baltic States less vulnerable to German and Soviet aggression during and after World War II? Finally, why were economic relations between the Baltic republics and Western nations not more successful than they were? Several good studies of European business and political activity in the Baltic region during the interwar period are available. Olavi Hovi, Merja-Liisa Hinkkanen-Lievonen, and David Kirby help provide important insight into British commercial involvement in the Baltic area during the 1920s and 1930s. Hovi and Hinkkanen-Lievonen have shown how both British investors and Baltic business leaders strove to develop stronger commercial ties following World War I, but were hampered by, among other factors, a worldwide scarcity of available credit, concerns over lingering Baltic territorial disputes, and Britain's pressing need to invest in its own post-war reconstruction.2 Consequently, as Kirby explains, British commercial development of the Baltic States yielded to a more assertive German policy of economic investment in the Baltic area, thereby helping Germany maintain a stronger political role in the region, as well.3 John