860d.51/9–2746: Telegram

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

confidential

709. At his request, I called on President Paasikivi September 25. He said that as President and banker of 20 years experience, he wanted to talk with me about Finland’s financial position and need of credits. Graesbeck, head financial mission to USA last year, brought back impression he could return this autumn to discuss additional credit. Consequently, it was surprise when Legation told them in August Graesbeck’s visit and further discussion with Export Import Bank at this time not regarded favorably by American Government. President asked reasons for American Government’s attitude. I commented that Graesbeck’s impression was evidently misunderstanding. I told President my advices in August were as stated urtel 177, August 12. While I had no precise statement of reasons, I knew in general that Export Import remaining resources very limited or perhaps already earmarked and as to credits in 1947, my Government thought International Bank was agency which should normally be approached.

President said that according their best computations, Finland very much needed additional credit to carry it through 1947. There was no use to talk about further credit for this year as time was too short. [Page 246] Two years had passed since armistice and they, with 1947, would be Finland’s hardest years. During this period, Finland needed to import annually 170 million dollars in goods at prewar valuations. After 1947, Finland would not need foreign credits but would have sufficient export to pay not only reparations but also needed imports. Finland had been greatly helped by initial American credit and by credits from Sweden. American credits had assisted in stabilizing currency and general economic situation. Sweden was a small country. It had already extended large assistance. It could not help much more. USA and Sweden were only possible sources of help.

President stressed and repeated number of times that Finland had gotten through 2 of 3 worst years and had one-third of way left to go, namely 1947.

He said Finland needs credit during 1947 to continue rebuilding Finland’s industrial apparatus. As result of war, Finland had lost 40% electrical power stations. New stations were being built to restore electric power capacity. Transportation and industry in general needed credits for imports. Remainder of this cable will be sent separately in a few days.10 Agriculture also needed to be restored and this would take another 4 years. Other factor making present most difficult period was need to relocate 460,000 Karelian evacuees.

Hamilton
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