The Minister in Finland (Albright) to the Secretary of State

No. 172


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Without the British market, Finnish industry would be ruined. Great Britain is in an excellent position to dictate its terms and it is doing so. The Anglo-Finnish Commercial Agreement of September 29, 1933,17 with its obligation upon Finland to import not less than 75 per centum of its requirements in coal from United Kingdom collieries, its commitments with regard to imports of whiskey, textiles, salt, et cetera, and its associated understandings and “conversations” is clearly indicative of the plight in which this country finds itself. It is not anticipated that the trade between the two countries can be balanced completely, but every effort will be made to reduce the present disproportion as rapidly as possible, and it is obvious that this must be accomplished at the cost of other countries with which Finland enjoys trade relations, since it is the policy of the Government to develop domestic industry to the full and to reduce as far as possible the importation from abroad of materials which can be produced at home.

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The principal hindrance to the expansion of American trade in Finland may be said to be the attitude of the Finnish Government itself. Convinced as it is that closer ties with the United Kingdom are necessary to the economic welfare of the country and to its political security, it is unquestionably exerting its influence to induce greater imports from the British Isles and the British Dominions.…

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[Page 142]

The attitude of the Finnish public is strongly in favor of the development of the country’s natural resources and of the native industries. The Agrarian Party in the Diet is particularly active in its support of measures to increase agricultural production and to reduce imports from abroad. The Government in power is committed to this programme, and finds itself in the position also of encouraging imports from the United Kingdom under threat of reprisals if the unfavorable British trade balance is not reduced.

The depreciation of the dollar and its virtual stabilization in relation to foreign exchanges would undoubtedly greatly increase the sales of American products in Finland were normal competition unhampered by outside pressure. Outside pressure in favor of United Kingdom products does, however, as has been described in the course of this despatch, play an important role in Finland. The adroit nature of this pressure, as amply witnessed in the Anglo-Finnish Commercial Agreement and its associated understandings, in nowise conflicts with the letter of the most favored nation principle applying to our trade with Finland. Lowering of duties under certain items in the Finnish customs tariff, at the instance of the British Government and in order to favor the importation of certain United Kingdom products, offers the same facilities as well to all other countries enjoying most favored nation treatment. Finnish importers are merely being influenced to “buy British.” American goods are well regarded in Finland and, were price and quality the only criteria to be considered, they would forge ahead despite the obvious disadvantage of a longer carry from the point of production.

Finland’s attitude toward the United States is friendly, but rather indifferent. American applause of Finland’s promptness in meeting its debt payments, has, of course, been favorably received, but the strictly commercial character of the debt is generally admitted, and Finland’s progress toward recovery is, furthermore, felt to have given the Government no option but to meet its engagements as in the past. The Finns are realists, and it seems to be the consensus of opinion among them that, while cordial relations between the two countries and the stimulation of trade relations are desirable, American assistance politically is virtually out of the question in view of the remoteness of the United States from this part of Europe and our policy of non-interference in purely European questions. As the United States has a very unfavorable balance of trade with Finland—although a balance that is normally much less unfavorable than that of the United Kingdom—the possibility may have suggested itself to the Department of the eventual negotiation of a bi-lateral agreement for the stimulus and protection of American trade with this country.

Respectfully yours,

Edward Albright
  1. League of Nations Treaty Series, vol. cxlix, p. 167.