860D.6359 International Nickel Company/26: Telegram

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

378. My 289, February 15, 6 p.m.35 The Swedish Minister told me this afternoon that the Finnish delegation at present in Moscow to negotiate a settlement of the Petsamo nickel mines matter is deadlocked with the Soviet authorities and that for the time being the negotiations are at a standstill. He said that the Finnish position had stiffened considerably recently on the advice of the Germans and that the Finns are now demanding control of the Board of Directors of the proposed new company. He added that the Finnish Minister had expressed to him, Assarsson, that the Soviet Government, becoming [Page 13] exasperated with the protracted negotiations, might seize the mines and that as he did not wish to be held responsible for such a development he was seriously considering resigning his post. Assarsson said that he had pointed out to Paasikivi that his resignation might merely encourage the Soviet Government and had advised him strongly against such a course.

The intervention of the Germans in these negotiations appears to have occurred both in Helsinki and in Moscow where the Counselor of the German Embassy36 called on the Finnish Minister and urged him to resist the Soviet demands intimating that Germany would stand back of Finland.

Steinhardt
  1. Not printed.
  2. Gustav Hilger.