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The Åland crisis was one of the first issues the new League of Nations had to arbiter. The Åland Islands' population's demand for self-determination was not met and sovereignty over the islands was retained by Finland, but international guarantees were given to allow the population to pursue its own (Swedish) culture, relieving the threat of assimilation by Finnish culture, perceived by the Islanders.
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Background
Prior to 1809, the Åland Islands were located centrally in the Swedish realm. However, in the Treaty of Fredrikshamn on September 17, 1809, Sweden had to give up all control of the islands, along with Finland, to Imperial Russia. The language and culture of the local population were hardly considered. By the Treaty of Paris of April 18, 1856, as an outcome of the Crimean War Britain required Russia to withhold the construction of any new fortifications on the islands. This stipulation was obeyed, despite unsuccessfully attempts to change the status of the de-militarized islands in 1908. By First World War in 1914, however, the Russian government turned the islands into a submarine base for the use of British and Russian submarines during the war.
Military crisis
In December of 1917, fearing the effects of the Russian October Revolution, the Finnish parliament proclaimed that Finland was now a sovereign state, calling on the principles of national self-determination. The very same autumn, Ålanders had organized for their own self-determination, fearing what they saw as excessive expressions of pro-Finnishness and anti-Swedishness in Finland. By this time, well above 90 percent of the islands' inhabitants considered themselves Swedish, stationed military personnel excluded, contrary to Mainland Finland, where less than 15 percent were Swedish speaking. Contrary to Åland, in the previous twenty years social tensions had also worsened considerably in Finland. The Ålanders' answer was a wish for secession from the Grand Duchy of Finland and the Russian Empire, that they felt little affiliation to, and a request for re-annexation to Sweden.
Sweden's power-elite was however preoccupied with Sweden's democratization that was recently commenced by a conservative cabinet in order to quench the revolutionary currents among Swedish workers. To that effect, Sweden got a new liberal prime minister, and for the first time socialists in the cabinet. Although activist circles close to the royal court were enthusiastic towards the Ålanders plea for Swedish support, the activists had lost their political influence in 1916, and ultimately also the ear of king Gustav V. Representatives for the Ålanders were fed sympathetic words and empty phrases. Neither the liberals nor the socialists leading Sweden through the last year of the world war were the slightestly interested in anything that had with activist adventurous policies to do. And the king solidarized with his cabinet.
The Civil War in Finland starting in January, 1918, did initially not change this situation. Sweden's social democrats had the year before purged the revolutionaries from the party, and were sympathetic but unsupportive of the socialist rebellion in Finland. Their coalition partners in the cabinet, the liberals, were rather inclined to understand the lawful (White) government in Finland, but they were traditionally neutralist and additionally rather suspicious of their Finnish counterparts. Those non-socialists in Finland who weren't ardent fennomans seemed to the Swedish liberals more like the conservatives they were used to view as their political enemies.
Exaggerated reports of civilian dread for the approaching combatants of the civil war resulted however in the dispatch of a minor naval expedition, tasked to evacuate civilians who wished so. It turned out that no civilians wished, but the naval commander proudly brokered an end to hostilities and remained on the Main Island as a peace-keeping force. It's evident that the chain of command was considerably more inclined towards activism than the socialist Minister of Defence, who in turn was persuaded to be considerably more supportive than his cabinet colleagues. It is less clear to what degree other cabinet members were briefed inbetween cabinet meetings, or even had a say. In a typical Swedish view, nothing much happened at all, and that what happened was unintended by the government and well meant by the naval officer in charge.
The White government in Vaasa saw it differently. They were bitter over lacking support from Sweden against the socialist rebels, and well informed about activist desires to re-acquire the Åland Islands, since many of the Swedish military officers who volunteered to White Finland's support were close to the leading activists. The White government was alarmed by the entry of Swedish troops on Finland's soil, and suspicious against Sweden's socialist Minister of Defence. A German naval force was urgently asked to remove the Swedish troops from Åland.
Political crisis
The League of Nations was an organization deviced to pacify the interaction between states, so in order for the issue to be at all considered by the League, it must be raised by the mother country of the complaining people. For the ethnically Swedish Ålanders wishing to return to Sweden, this mother country must be Sweden.
The leading Swedish social democrat, Hjalmar Branting, opted for taking on the issue purely in its aspects of international law. The cabinets of Finland viewed this as pure tactics and spin, and a dispute over whether the islands rightfully belonged to Sweden or Finland ensued. In 1921, again despite the fact that 90 percent of the islands population was Swedish — and that they expressed an almost unanimous desire of being incorporated into Sweden — the League of Nations granted the Åland Islands to remain under Finland's supremacy.
After effects
The connected difficulties in the relations between Sweden and Finland were resolved by the mid-1930s, when the weakened authority of the League of Nations signalized a much harsher international mood. The fear of the Åland islands falling under the control of Nazi Germany or the Soviet Union was very real, and that is why Sweden's Foreign Minister Sandler proposed defending the status of the islands despite Sweden's longstanding policy of neutrality. Detailed plans were made, however in the end, Sweden opted not to participate in the defence of the islands.