760d.61/259: Telegram

The Ambassador in the Soviet Union (Steinhardt) to the Secretary of State

741. For the Secretary and Under Secretary. My 734, October 12, 4 p.m. The Finnish Minister called this morning and recited to me in the strictest confidence the following account of the meeting yesterday afternoon at 5 p.m., between the Finnish representatives, Stalin, Molotov and Potemkin.

Stalin put forward as his initial proposals the following:

A pact of mutual assistance.
An “arrangement” with respect to the Finnish islands in the Gulf of Finland off Kronstadt.
The cession of the Finnish portion of the Rybachi Peninsula so as to facilitate Soviet transit to the Bay of Varanger.
The leasing to the Soviet Union of a naval and aviation base at Hango, the Soviet forces to be limited to “four or five thousand men”, and,
The cession of four Finnish districts which lie along the Gulf of Finland between Leningrad and Viborg and which are within approximately 20 miles of the city of Leningrad.

In return Stalin offered substantial territorial compensation in central or southern Karelia along the present Finnish-Soviet frontier.

Stalin at the same time stated that the Soviet Government had no “claims” to the Aaland Islands. The Finnish representative gained the impression that he had abandoned any intention he may have entertained of making any demand at this time in respect of these islands.

To these proposals the Finns replied:

That they were willing [unwilling?] to agree to a pact of mutual assistance, whereupon Stalin proposed in lieu thereof a pact limited to the mutual defense of the Gulf of Finland. This proposal was also rejected by the Finns who are of the opinion that Stalin will not press this point.
That as part of a generally satisfactory settlement they would be prepared to cede the islands in the Gulf of Finland to the Soviet Government as they recognize the strategic importance of those islands to the Soviet Government in connection with the defense of Kronstadt and Leningrad.
That as part of a generally satisfactory settlement they would be entirely agreeable to the cession of the Finnish portion of the Rybachi Peninsula recognizing the validity of the Soviet desire to have access to the ice-free Bay of Varanger over the small strip of land involved which is of no value to Finland provided however that the fishing rights granted to Finland under the existing treaty are preserved.
As to the leasing of a base at Hango, Finland could not consent to the “touching” of the Finnish mainland with the exception of the small strip in the far north referred to in (3) above.
As to the cession of the four districts in the neighborhood of Leningrad, Finland recognizes the undesirability from a Soviet point of view of having the Finnish frontier practically within artillery range of Leningrad and is accordingly disposed to negotiate this point. The Minister stated to me that the Finnish representatives hoped to persuade Stalin to reduce his request to two districts in view of the fact that the Finnish population of the four districts totaled approximately 50,000. The Finns do not, however, regard this point as insurmountable provided Stalin is otherwise reasonable but say that it will raise difficult problems involving the movement of population and fortifications.

The Minister expressed the opinion that if Stalin does not insist on the base at Hango all of the other requests which he and the other Finnish representatives regard as reasonable, can be negotiated on a satisfactory basis particularly if adequate territorial compensation for Finland is obtained in Karelia. He said that Stalin’s attitude throughout the conference had been cordial and affable and in no sense insistent or threatening and that he regards the present status of the matter as such a substantial modification of what the Finnish Government understood Stalin’s intentions to be as to constitute a satisfactory basis for negotiations provided Stalin does not increase his demands as the negotiations progress. The Minister concluded by expressing his deep appreciation of the President’s message to which he attributed the moderate attitude thus far shown by the Soviet Government and added that in the absence of the message peremptory demands of a more far-reaching nature would undoubtedly have been made and insisted upon.

The Finnish representatives are now awaiting instructions from Helsinki and the conferences will be resumed at 5:00 o’clock this afternoon provided the instructions are received in time. The Minister expressed doubt that they would be received before tomorrow.