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CONVERSATION OF THE PEOPLE'S COMMISSAR FOR FOREIGN AFFAIRS OF USSR V.M. MOLOTOV WITH THE AMBASSADOR OF GERMANY IN THE USSR F. SCHULENBURG

Dispatched: to Stalin, to Molotov, to Mikoyan, to Voroshilov, to Kaganovich, to Vyshinsky

On November 25, 1940.
Secret.

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Schulenburg remarks again that this sum is very insignificant, so is not necessary to argue about it, as it makes less than 25 million German marks. He says that these bonds, signed by the Soviet official bodies, are in hands of private firms and banks also that in case of default individuals will suffer.
Concerning Käkisalmi factory Schulenburg adds that now, after Finland returned all away taken machines and paid the damages incurred in connection with war, the German side has the right to apply for receiving corresponding compensations. (Schulenburg hands over to Comr. Molotov two written messages: 1. on the Czechoslovak credit; 2. on the question of Käkisalmi factory).
Schnurre, going over to the following question, asks to make some explanations concerning Petsamo concession. He refers to the contract between Germany and Finland, on which the latter should provide for Germany 60 per cent of the extracted nickel ore. He emphasizes that this contract, signed for an indefinite term, was signed in April—May, what is earlier than that of the Soviet side with claims concerning this concession. «We want — states Schnurre — that the supply of the nickel ore, necessary to us, will be fully provided. Except the agreement between Germany and Finland, there are separate contracts between the nickel company and the German firm «I.G. Farben» for fulfillment of this agreement. The German government, Schnurre continues, informed Finland that it under all circumstances will demand implementation of the agreement for supplying of the nickel ore both from the present company now having the concession, and from any future companies. The German side therefore cannot abstain from these deliveries, as it has supplied considerable preliminary financing for this concession.

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Comr. Molotov goes to the third question regarding the nickel concession in Petsamo, Comrade Molotov says that this question still is not clear to him, because already in summer Schulenburg informed that the German side has not so ever claims on this concession. This question was again touched by Schulenburg during Comr. Molotov's stay in Berlin. The contract between Finland and Germany should be divided into two parts: the first question — investments from the German side. As these investments were made on the basis of the contract with the Finnish government, the Soviet government has nothing to do with this question, and Germany should require implementation of the obligations connected with it only from the Finnish government. The second question — supply of the nickel ore. The Soviet side is concerned about this question. To Schulenburg as well as to everybody else present here, it is known that there exists an agreement on providing Germany 60 per cent of total production of ore in 1940. As 1940 already comes to an end, it is possible to speak about a further period, and Comr. Molotov suggests to extend the agreement of delivery of 60 per cent of the nickel ore for the duration of the war, which naturally corresponds to how Germany, in the present conditions, especially needs this ore.
Schulenburg answers that in the first question he completely agrees with Comr. Molotov, that is up the German government to demand implementation of these obligations from Finland. As to prolonging of the term for the duration of the war, it is not enough, as the war can come to an end soon, and the German side provided considerable investments, therefore the nickel should be delivered to Germany.
Comrade Molotov answers that it is possible to prolong the agreement on supply of the ore for 1941.
Schnurre says that the German side wishes to implement the fulfillment of the contract with Finland as it was concluded, not in 1940 or 1941, but for an unlimited time. And it contains: how the ore should be bought, how it should be paid, how and when the equipment is furnished, and other details. Therefore, the German side is interested in that 60 per cent of ore which, by the way, were offered by the Soviet side, is delivered according to the contract concluded between Germany and Finland, irrespective of those changes that might occur in concession in the connection when influenced by the Soviet government.
Comrade Molotov asks, how the Soviet side can guarantee those Contracts which it haven't seen and about which it knows nothing. The Soviet side has not read the contract between Finland and Germany, and the German side can demand implementation of this contract only from Finland. The Soviet side can speak only about concession concerning which it has the contract with Finland. As to supply of the ore, the Soviet side agrees with delivery of 60 per cent during 1940 and is ready to conclude also such agreement for 1941 and even for the further period if it is necessary.
Schnurre repeats that the German government wants only that the agreement signed between Germany and Finland will be carried out.
Comrade Molotov says that originally the German side specified 53 per cent from the general production while the Soviet side offered 60 per cent. And to Comr. Molotov it is unclear that who is to be attributed that 53 per cent was specified.
Schnurre answers that it was a misunderstanding. On the contrary, Finland agreed to deliver 100 per cent of nickel ore and only after the Soviet side expressed the interest in concession, the German side made a concession and agreed on receiving 60 per cent. The German government as it was already specified, prepared to the Finnish government a notice of what is demanded of it, for implementation of this agreement.
Comrade Molotov assumes that this agreement between Germany and Finland does not contradict the following provisions: 1. that Germany refuses claims on concession; 2. that Germany agrees to receive during 1940 — 1941 of 60 per cent of production of nickel ore. Comrade Molotov expresses this as a wish as he does not know the agreement signed between Germany and Finland.
Schnurre believes that at negotiations on concession between the Soviet side and Finland the latter will report about agreement conditions with Germany.
Comrade Molotov considers that here it is necessary to consider two agreements: 1. the agreement between the Soviet Union and Finland; 2. the agreement between the Soviet Union and Germany about ensuring supply of the nickel ore to Germany. Furthermore, the agreement between three parties if it is necessary can be concluded.
Schnurre considers that there is some disagreement. The German side signed a contract with Finland and on the basis of what this contract demands, Finland will undertake her obligations for the present and for future concessions.
Comrade Molotov answers that concerning production both parties can make an agreement, but the Soviet side is unable to guarantee such obligations of which she knows nothing.
Schulenburg says, having given an example about sale a person selling a house in which there are mortgage requirements, that the Finnish government should advise the Soviet side about the agreement which it presently have with Germany. And this agreement will not contradict the first point (refusal of Germany of claims on concession), but will not be in accordance with the second point as in the agreement there is nothing specified about the duration of its effect.
Molotov says that he can tell nothing about the agreement as he does not know it. However, the analogy given Shulenburg, is wrong, as the Finnish government, not being a person but having enough material and financial means for implementation of the assumed obligations, should guarantee of what Germany is interested in. The Soviet side is ready to deliver to Germany of 60 per cent of production of the ore during 1940 — 1941, and also in the next years, but in that case the percentage should be accordingly adjusted.
Comrade Molotov suggests to go to the following question. Comrade Molotov says that if the German side can shorten the list of questions available for it for today, he would like to go to the political questions connected with the negotiations in Berlin.

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Bogdanov      wrote down
AVP Russian Federation, f. 0b, op. 2, p. 15, d. 158, l. 1 — 14.
Source: Ministry of Foreign Affairs of the Russian Federation. Documents of foreign policy. 1940 — on June 22 1941. XXIII:2. No. 547. Moscow: Mezhdunar. relations, 1998. Machine assisted translation by Pauli Kruhse.

Finland in the Soviet foreign policy 1939-1940