Secretary’s Memoranda, Lot 53D444, March 1949
Memorandum by the Director of the Office of European Affairs ( Hickerson ) to the Secretary of State 2
Subject: Finland—Background in Connection with World Bank Loan
The World Bank is considering extending a loan to Finland and in this connection has asked for our judgment on whether Finland is likely to be taken over by the Soviet Union in the near future, especially in view of Soviet opposition to the participation of Scandinavian countries in the North Atlantic Pact.3
Finland has been reduced to military ineffectiveness by the Peace Treaty and could be taken over physically almost at will by Russia. The obvious world reaction acts as a strong deterrent and is undoubtedly the basis of the Soviet policy of friendship toward Finland repeatedly expressed by Stalin. Under the Finnish-Soviet Mutual Defense Pact signed April 6, 1948, the two countries are to confer if either is threatened by an armed attack by Germany or any state allied with the latter. Russia could call for a consultation with the Finns at any time on the ground that it is threatened by the North Atlantic Pact and could insist on bases in Finland in addition to the Porkkala Naval Base granted by the Peace Treaty.
Since the Social Democratic Government headed by Fagerholm4 took office last July, succeeding a coalition government in which Communists held several cabinet posts, the Soviet propaganda pressure on Finland has been stepped up and is likely to increase in intensity, particularly when the North Atlantic Pact is signed.
[Page 435]With respect to physical pressure on Finland, Swedish officials have freely predicted this would occur if Norway showed an intention to adhere to the Pact. However, evidence at hand is not sufficient to justify the conclusion that Russia is preparing military movements into Finland or Norway. A report from our Embassy in Stockholm quotes the head of the Swedish Army as saying on February 26 that the only change in recent Russian troop dispositions known to the Swedes has been an increase of Soviet forces in the Salla area (just east of the Finnish frontier and north of the Arctic Circle) to two divisions instead of one and a strengthening of forces in the Vilno area. This source did not attach significance to these movements, nor does he expect any overt action against Norwegian territory to result from Norway’s adherence to the Pact.
Our best judgment is that the Soviets will not move to occupy Finland at this time.
- The source text was initialed by Secretary Acheson. A copy of this memorandum, which was drafted by Benjamin M. Hulley, Chief of the Division of Northern European Affairs, is included in the Department of State’s Central Files under 860D.00/3–149. The source text was attached to Carter’s memorandum to the Secretary, March 3, infra.↩
- For documentation on the negotiations leading to the conclusion of the North Atlantic Treaty Organization, see vol iv, pp. 1 ff.↩
- Finnish Prime Minister Karl-August Fagerholm.↩