192. Minutes of a Meeting of the Operations Coordinating Board0

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8. Special Report on the Current Situation in Finland (Secret)

Mr. Ernest deW. Mayer, Officer in Charge of Northern European Affairs, and Mr. Harvey F. Nelson, Jr., of the Finnish Desk, were present for the meeting.

Mr. Smith (ICA) pointed out that the question of economic assistance to Finland had been subjected to an inter-agency review a very short time ago and that if the Board were to recommend a $10 million loan for Finland it would involve a complete reprogramming process in which $10 million would have to be taken from some other country. Mr. Mayer pointed out that an expression of interest by the Board or a Board recommendation would be of considerable assistance not only with regard to the possibility of $10 million loan funded in FY 1959 but also with regard to an immediate PL 480 loan of $3 million in Finnmarks. Support therefor by CIA and USIA was noted.

Governor Herter, in stating the reason for the special report, referred to recent communications from Ambassador Hickerson stressing [Page 512] the ominous deterioration in the Finnish political situation. He said Mr. Dillon, upon his return to the Department might wish to reopen the question with the interagency allocating committee. Mr. Smith said he did not believe the OCB should constitute itself a court of appeals on the reallocation of economic assistance funds. Mr. Macy (Bureau of the Budget) supported the ICA view stating the Department of State recommendation to be quite out of order and saying there were a number of sources from which funds could be made available. Mr. Macy said it was possible to obtain PL 480 funds in excess of the $3 million although perhaps not equal to $10 million in a relatively speedy manner. Mr. Scribner (Treasury) wondered if $3 million Finnmarks would meet the problem. Mr. Mayer stressed the importance of the psychological factor in US assistance and noted that US funds seemed to be the best hope for meeting the problem in Finland. There followed a discussion, in which Mr. Allen Dulles (CIA) participated, on the large credit in Soviet rubles held by the Finns. [1-1/2 lines of source text not declassified] USIA suggested consideration be given to a long-range study of the Finnish problem. Treasury recommend a new look by the NSC Planning Board at United States policy toward Finland.

Governor Herter repeated the Board was in no position to recommend the reallocation of economic aid funds. He suggested State make an effort to obtain funds under PL 480 and explore other means as suggested by Mr. Macy. Mr. Harr (Vice Chairman) said considering the content of the Report, which the OCB had requested, he did not think the situation would be passed over lightly. Mr. Gray, of the White House staff, said in view of the apparent seriousness of the Finnish situation, the Board should maintain its interest in that problem. The Chairman requested the Board be kept advised of developments and of the success of the efforts to secure funds for loan to Finland.

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  1. Source: Department of State, OCB Files: Lot 62 D 430, Preliminary Notes, III. Secret. Drafted by Jeremiah J. O’Connor.