Office of the Historian

860D.51/461

Memorandum of Conversation, by the Assistant Secretary of State (Berle)

[Washington,] September 23, 1940.

The Finnish Minister came in to see me, at his request. He was unhappy at the fact that the Reconstruction Finance Corporation had declined to entertain their application for a loan. He advised that the [Page 346] Swedes were prepared to waive the undrawn balance of their Export-Import Bank loan in favor of the Finns, if that would do any good.57

I told the Minister that the situation in the north Baltic was still highly obscure; we had to take account of the fact that Finland lay at the moment between two large forces, Germans in Norway, Russians on the opposite border; that we knew that the Germans were pressing for transit rights for their troops through Finland, and by consequence the whole situation hardly provided that foundation for a loan which was within our normal practice.58 We have considered Export-Import Bank loans as primarily in the nature of commercial loans.

But, I said, this did not preclude the possibility of working out relief in some measure. I therefore repeated the suggestion I had previously made59 to Mr. Mikkola60 that they ask for a relief allocation.61 I pointed out that they had an undrawn balance of nine million dollars arising out of a previous Export-Import Bank loan and that this would probably enable them to go forward with some of the immediate purchases they felt they needed—especially fats.

The Finnish Minister said they needed a good many agricultural materials, notably cotton—the clothing situation is extremely bad. He asked whether it would be in order for him to tackle the head of the Surplus Commodities Corporation and see what there was available. I told him I thought this could do no possible harm.

A. A. Berle, Jr.
  1. The unexpended balance of the Export-Import Bank credit to Sweden was about $10,000,000.↩
  2. Mr. Berle had noted in a memorandum of September 13, 1940, that he already knew that “Mr. Jesse Jones’ reaction to earlier intimations from the Finns has been that it would be highly unwise to make any such loan.” (860D.51/463)↩
  3. This suggestion had originally been made on September 17.↩
  4. Erkki Mikkola, Commercial Counselor of the Finnish Legation.↩
  5. That is, an allocation from the President’s relief fund.↩