740.00112 European War 1939/3–1045: Telegram
The United States Representative in Finland (Hamilton) to the Secretary of State
[Received March 12—10:12 p.m.]
88. Prime Minister Paasikivi, during a call on him on March 9, deliberately steered the conversation to subject of Finland’s present economic position. He talked at length. He said Finnish industry at present is operating at something less than half capacity due principally to lack of necessary materials. Zhdanov had told him that the Soviet Union could not during these next few years furnish Finland with the metals which Finnish industry needed because the Soviet Union had great need itself of those commodities. Sweden has originally promised to furnish Finland 12,000 tons of ship plate but had found it possible to supply only half that amount. The London discussion for a three way trade arrangement among Finland, Britain and Sweden were not yet finished. The Finnish Government greatly hoped that trade relations could soon be reinstated with the United States. The United States was the only country which could supply some of the items which Finland needed.
In line with the Department’s instruction I discouraged expectations of credit. Recalling experiences of American people after last war in indirectly financing Germany’s reparations, I observed that question of assisting in reparations payments involved not only Finland but other countries associated with Germany and Germany itself. Later it would come up in the Pacific. I mentioned shipping difficulties, lack of supplies sufficient to meet requests of Allies for material aid with which to prosecute the war, and that present situation in the United States is quite different from that existing before the war. Now everything is concentrated on prosecuting the war vigorously and winning it as quickly as possible. Once Germany is defeated, there would remain [Page 642] continuance of the war against Japan. In the Pacific the road would be, as the President stated, long and difficult.
Paasikivi said he could understand that the American people would not wish to repeat what had been done after the last war in extending credit to Germany. He laughed and said he had been a banker then and he and his associates had never understood why the United States had extended such credit to Germany. He stressed that the question of Finland obtaining needed commodities from the United States need not involve or be related to question of reparations. Finland needs assistance to get its internal economy and industry going again and to restore healthy economic life in Finland. Finland would tighten its belt and live without complaining on a much restricted basis for these next years. Finland’s whole economic life is dependent on imports and exports. He stressed three points: 1. The commodity assistance that Finland needed was small; 2. Finland could pay for this assistance by furnishing wood products for which he understood there was need in the United States; 3. Credit arrangement for a few years would be most helpful and Finland could be counted on to repay. When I commented again about the difficulties, he repeated his previous statements. In reply to my question he made it clear that Finland did not expect assistance at this moment while communication routes to Finland were not open. What he was saying applied to the situation which would exist after these routes had been reopened. He hoped this would be by summer or at the latest by autumn.
I of course made no commitment. Having already commented twice in regard to the difficulties from our point of view, I finally changed the subject.
I hope Department will consider the foregoing in the light of this Mission’s telegram No. 48, February 14, 5 p.m.33
If there are Finnish supplies which it would be useful to the United States to have (I understand there is a shortage of certain wood products in the United States), I know of no political reason why arrangements should not be made to obtain such supplies. The British have already sent a trade mission here to discuss supplying by Finland to Britain of wood products. The Finns sent a mission to Moscow and concluded an agreement for a commodity exchange. The Soviet arrangement and the proposed British arrangement are quite outside of and not related to the armistice provisions. I therefore see no political reason why prompt consideration should not be given by appropriate agencies of the American Government to the question whether the United States could advantageously obtain from Finland [Page 643] supplies needed by the United States. If we need such supplies, we could then approach the problem of what the Finns want from us and what we would be in a position to furnish.
In the foregoing paragraph I am suggesting a program of study by appropriate United States governmental agencies which might lead to action some months hence.
- Not printed; in this telegram the United States Representative emphasized the necessity for Finland to trade with the outside world, and suggested that attempts be made to work out some sort of triangular trade arrangement between the United States, Great Britain, and Finland (740.00112 BW/2–1445).↩