760D.6111/81: Telegram
The Minister in Finland (Schoenfeld) to the Secretary of State
[Received March 25—1:50 p.m]
162. With evacuation tomorrow of final zone of areas ceded to Russia, except in undefined Salla sector and pending definitive delimitation of frontiers as well as evacuation by Russians of Petsamo due April 10, the first stage of new situation following conclusion of peace at Moscow March 12 will be complete. Outstanding impression of this period is spirit of calm resolution not essentially different from spirit in which Finns conducted hostilities. It may be expected that the ensuing long period of reconstruction [will be marked?] by exactly the same spirit.
Reserving appraisal of economic consequences of the peace for a special report13 as directed in Department’s No. 97, March 22,14 it may [Page 320] be mentioned that authoritative monetary estimates of losses amount to more than 30 billions of finnmarks aside from cost of industrial and other reconstruction, resettlement and rehabilitation of evacuees and the standing difficulties of maintaining and restoring vital export trade during and after the war between the Allies and Germany.
It has been indicated that the Cabinet will be reorganized immediately after Easter holidays and that it will be a coalition government dedicated primarily to concentration of effort upon reconstruction of the country in accordance with the wish of all social and political groups regardless of former party differences.15 It is now evident that Finnish people share [the] Ryti Cabinet’s conviction that acceptance of Russian peace terms was wise because it was inevitable. It is also apparent from all utterances public and private that this acceptance of the inevitable by no means signifies supine resignation or abandonment of the hope that political fortune will eventually favor Finnish interests. Disposition loyally to abide by the peace treaty is clearly accompanied by conviction of its coercive nature and consequent impermanence.
In these circumstances principal developments of the measurable future in Finland seem to include: (1) maintenance and greatly increased expansion of the country’s military resources notwithstanding newly created strategic obstacles; (2) measures designed with a view to physical and moral welfare of the Finnish people; (3) extreme exertion to restore and expand agricultural and industrial capacity of the country; (4) maintenance of maximum national unity; (5) vigilant foreign policy substantially along the lines thus far followed, soundness of which is not thought to be in doubt and apparent failure of which is considered mainly attributable to momentary combination of adverse and overwhelming factors.