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2110/456728-82

Memorandum by an Official of the Economic Policy Department

Meeting Concerning Finland on March 28,1940, at 6:00 PM

Present:
Ministerialrat Ludwig
Regierungsrat Mützelburg
Minister Schnurre
Counselor van Scherpenberg
Counselor of Legation
Kreutzwald
Assessor Besser 		Ministry of Economics
Ministry of Economics
Foreign Ministry
Foreign Ministry
Foreign Ministry (German
Legation, Helsinki)
Foreign Ministry

To begin with, Herr Kreutzwald gave a short survey of the immediate effects of the Russo-Finnish war on Finland. The feeling toward Germany was decidedly unfriendly; people felt that Germany had left them in the lurch or even "sold them out." They pinned their hopes as in the past, on the Western Powers and expected that a defeat of Germany would also lead to a restoration of the old Finnish boundaries.
Herr Schnurre briefly described the agreements recently concluded with Latvia and Estonia and about to be concluded with Lithuania.1 The Foreign Ministry had conceived the idea of regulating economic relations with Finland in a similar way. He, too, thought that some arrangement was necessary in order to maintain and expand the vital supplies hitherto imported by Germany from Finland. Such agreements had to be concluded immediately in order to forestall similar wishes on the part of Russia and the Western Powers.
Herr Kreutzwald pointed out on the other hand that in view of the present attitude of the Finns an expansion of economic relations between Finland and Russia was not to be expected in the foreseeable future. However, it was to be anticipated that energetic action on the part of the English would, because of the political considerations indicated above, meet with a favorable response from the Finns. He believed that negotiations such as those that had been conducted with the Baltic States would have little prospect of success in the case of Finland. It was true that Finland was in a tight spot, but, on account of her access to world trade through Sweden and Norway, Finland could not be put in the same class as the Baltic States. Herr Ludwig, too, expressed misgivings about the conclusion of agreements with Finland on the Baltic model, since, if English imports from Finland were cut off, England would also block Finnish imports.
Herr Schnurre emphasized that he, too, feared that German proposals on the Baltic model would meet with rejection by Finland and make further negotiations more difficult. He thought it would be better to negotiate with the Finns about an immediate program [Sofortprogramm] for the delivery of some Finnish raw materials that were vital to Germany, but reserve an expansion of this minimum program for later negotiations.
In the consideration of the question of which supplies should be included in the immediate program to be drawn up, the following discussions took place.
1. Copper. Herr Ludwig stated that the entire copper production of Finland had already been going to Germany up till now. The quantity in question was 13,000 tons annually, of which 2,000 tons had gone back to Finland as semi-manufactured products, 11,000 tons remaining in Germany. These imports were assured through 1940. The delivery stoppages that had occurred were due only to transportation difficulties. He had no doubt that after the impending elimination of these difficulties the Finnish deliveries would be resumed on a full scale. An extension of this delivery commitment for 3 years, an increase in copper production and the opening up of the nickel deposits at Nivala had been promised in October 1939 in return for the delivery of 134 German 2-cm. antiaircraft guns.2 Fifty of these antiaircraft guns had been delivered. It was to be expected that the Finns would make the fulfillment of the promises they gave in October 1939 conditional upon the delivery of the remaining 84 antiaircraft guns. It is to be ascertained whether the Finns can be given promises to that effect.
2. Molybdenum. Herr Ludwig stated that the molybdenum deposits were still in the possession of the Finns. Herr Kreutzwald pointed out, however, that the plants in the immediate vicinity of the combat area have suffered considerably from the military actions. Herr Ludwig stated that Germany had already been assured of the molybdenum production, too, by firm agreements.
3. Nickel. It was agreed that production from the Nivala deposit could not be counted on for the immediate future. Attention should therefore be directed mainly at Petsamo. Only the shipment of nickel ore could come into question, since the smelting installations destined for Petsamo had been retained in England in account of the outbreak of the war. As Herr Kreutzwald emphasized, the mining installations in Petsamo had been severely damaged by the war. That the Canadian concession company would begin mining operations was at present all the more unlikely in that the terms of the concession did not as yet provide for any commitment about production in the near future. It was emphasized that a satisfactory settlement of this point could be achieved only if the Finnish Government, as a result of political pressure from Germany, either takes over the management of the mines itself or at least makes the concessionaries start production early. It was agreed that ensuring the Petsamo production was the most difficult question in the impending negotiations. Russian support could hardly be expected.
4. Iron pyrites. Herr Ludwig called attention to the need of securing for Germany the Finnish iron pyrites which were of importance for the production of copper and cobalt. Here, above all, a collision with Russian interests was to be feared.
The other items of Finnish exports in the past were then discussed. Herr Ludwig revealed, on the bases of material he had in his possession, that the main export item had consisted of cellulose, the greatest part of which had gone to England. Second in importance were pit props, pulpwood and lumber, the greatest part of which had likewise gone to England and a certain part also to Germany. Finally, paper and cardboard had played a big role in Finnish exports.
It was agreed that Germany had no interest whatever in expanding trade with Finland in these fields. The importation of these products was not vital to Germany. In the second place, payment through German counterdeliveries would involve great difficulties, since the most important Finnish import items (iron, metal and metalware, coal) could not be delivered by Germany in sufficient quantities. This would become especially evident if, as was to be expected, the Finnish Government should set up a reconstruction program and reduce the volume of consumer and luxury goods hitherto imported. It was agreed that for this reason, too, a procedure such as had been suitable vis-a-vis the Baltic States would in the case of Finland also be contrary to the German interest.
In conclusion it was emphasized that the credit of 10 million RM granted by Germany through the agreements of March 12, 1940,3 hence shortly before the conclusion of peace, constituted a considerable asset in the impending German-Finnish negotiations.
Arrangements have been made for sending Herr Schnurre as Special Plenipotentiary of the German Government to Helsinki for a few days, accompanied by Herr Ludwig, to negotiate with Minister president Ryti and others of the highest Finnish Government leader on the immediate program described above. The trip to Helsinki is to start on April 8.4

1 See documents No. 463, footnotes 4 and 5.
2 Documents concerning these negotiations are on serials 2110 and 9831.
3 Documentation concerning these agreements has not been found.
4 Details concerning Schnurre's negotiations in Helsinki have not been found: but see document No. 293, footnote 1.

Besser

Sources: Documents on German foreign policy 1918-1945, Series D, IX, Nr. 16. Akten zur deutschen auswärtigen Politik 1918-1945, Serie D. Band IX, 16. Schnurre's trip to Finland was postponed and took place three weeks later (H. Peter Krosby, "The Diplomacy of the Petsamo Question and Finnish-German Relations, March-December 1940", Scandia 2008, http://www.scandia.hist.lu.se)

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