Foreign Relations of the United States, 1958–1960, Eastern Europe; Finland; Greece; Turkey, Volume X, Part 2

188. Memorandum From Acting Director of Central Intelligence Cabell to the Under Secretary of State (Herter)⁰

Washington, September 15, 1958.

SUBJECT

• Finland’s Economic Situation

1. I am aware that you are thoroughly familiar with the background of Finland’s present economic difficulties, which have been high-lighted by the recent visit to Washington of the Director of the Bank of Finland to attempt to negotiate a $30,000,000 loan. The current CIA estimate of the seriousness of this situation might be of assistance to you in determining the U.S. Government’s policy with regard to this request.

2. You, of course, are as familiar as we with the intensification of Soviet economic pressure on Finland, which culminated during President Kekkonen’s recent visit to Moscow in the Soviet offer of a 500,000,000 ruble loan. A key element in the Finns’ increasingly desperate efforts to preserve their economic stability is of course their ability to acquire investment capital from abroad. The great majority of the Finns are naturally very reluctant to accept large scale assistance from the Soviets, since they realize that to do so is to place themselves increasingly under the control of the USSR economically–and, ultimately, politically. The only apparent alternative is to get this assistance from the United States. In our view, failure to receive economic assistance at this moment of crisis in Finland’s post-war economic affairs, might well be a decisive factor in an unfavorable turn for Finland’s future economic and political development.

3. I fully appreciate the severe problems that have been created for the Department by the recent curtailment of funds available for foreign assistance, at the same time that there is mounting competition from all over the world for the remaining funds available. Nonetheless, it is our view that there are few cases where the timely application of American economic assistance would have more clear-cut prospects of over-all benefit to a friendly government, the continued welfare and independence of which is of high interest to and of direct relation to the security of the United States.

4. I take the liberty of expressing these thoughts to you because it appears that an intelligence assessment of the implications of the current economic crisis in Finland will inevitably form one part of the picture which you must view in arriving at a decision on this matter.

C. P. Cabell
General, USAF

0. Source: Department of State, Central Files, 860E.10/9–1558. Secret.