Finnish-Soviet trade between Winter and Continuation Wars

Discussions on the Winter War and Continuation War, the wars between Finland and the USSR.
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Finnish-Soviet trade between Winter and Continuation Wars

Post by Kopyrda » 13 Jun 2021 10:51

I have a question about the Finnish import of the foodstuffs from the Soviet Union. Solonin in his "25 June. Stupidity or aggression?" wrote something about Soviets banning trade of the various materials, including foodstufs, as a mean of putting a pressure on Finland regarding the nickel mines in the Petsamo area. That was supposed to result in Finland being pushed into the arms of Germans, since the only other choice Finns had was to risk starving.
Still, I've seen some Russians saying it's not true, that Finns were trading food with the Soviets almost to the beginning of the Operation Barbarossa. Source for that info was the chapter 5 of "The Continuation War: An Investigation of German-Finnish Military Collaboration 1940-1941" of the Finnish author Mauno Jokipii, but I don't have the access to this book. Anyone has better knowledge on the subject?

Seppo Koivisto
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Re: Finnish-Soviet trade between Winter and Continuation Wars

Post by Seppo Koivisto » 14 Jun 2021 12:18

According to the trade agreement signed on 28 June 1940, the Soviet Union was to supply 70 000 tons of grain, but supplied only 15 000 tons before starting to put pressure due to Petsamo nickel. However, when Paasikivi met Stalin last time before resigning as ambassador on 30 May 1941, Stalin promised to supply 20 000 tons of grain as a "personal small favor". This grain was delivered still before the start of the war.

As Sweden had refused to supply grain due their own bad food situation and the British blockade of the Artic Ocean port of Liinahamari in June 1941, Germany remained the only possible supplier of food. In 1942 Germany supplied 260 000 tons of grain due to the failed crop in Finland. ... 1936-1944/

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Re: Finnish-Soviet trade between Winter and Continuation Wars

Post by Mangrove » 14 Jun 2021 17:58

Finland reveals her secret documents on Soviet policy March 1940 - June 1941: The attitude of the USSR to Finland after the peace of Moscow (also known as Sinivalkoinen kirja II in Finnish)
Chapter V

On June 28, 1940, a trade treaty was concluded in Moscow between Finland and the USSR. In it the commercial quotas of both parties were fixed for the period July 1, 1940- June 30, 1941. A clearing agreement was simultaneously concluded. It assumed that payments made by one party to the other would be kept balanced.

Quota goods were thereafter exported on both sides, until the USSR stopped all exports to Finland at the beginning of January 1941. The alleged reason was that Finnish exports to the USSR had been too small compared with USSR exports to Finland, and that consequently the balance in the exchange of goods had been disturbed. In this manner the USSR, in violation of the trade treaty, opened a trade war on Finland.

This Soviet action clearly ran counter to the clearing agreement, which expressly stipulated that a disturbance in the balance of payments would justify the stoppage of exports. The balance of payments had in fact developed according to the terms of the clearing agreement; it would have been impossible for the USSR to make any complaint on that score. The major part of the aggregate value of the Finnish goods quotas was represented by tugs and lighters of which about 45 per cent were scheduled for delivery during the first year of the treaty and the rest during the second year. The time required to draft the contracts for these vessels, the progress of actual construction and the advance and part payments connected with their building are essential factors in judging the rate of Finnish deliveries. The contracts for the vessels were concluded with the Soviet import organization at the end of the first quarter of the first treaty-year; periods of delivery were correspondingly postponed. The delay in drafting the final contracts did not depend on the Finnish Government or the Finnish shipyards. On the contrary, both did their utmost to secure fulfillment of the contracts within the stipulated time, despite difficulties in obtaining raw materials.

An examination of the clearing account shows that the statement by the USSR that Finland had not fulfilled her obligations was altogether unfounded. Article 7 of the clearing agreement stipulated that the aggregate payments on both sides should balance. On June 18, the clearing account showed that Finland had a claim of $310,638 on the USSR. The clearing situation, therefore, did not justify a stoppage of USSR exports; on the contrary, it called for increased exports by the USSR.

The USSR export of quota goods to Finland having been at a standstill during the current year, the USSR failed, during the first treaty-year (ending on June 30, 1941), to deliver the following quotas:

35,000 tons of grain
18,800 tons of apatite
5,000 tons of gasoil
14,000 tons of petroleum
8,000 tons of gasoline
300 tons of lubricating oil
30 tons of paraffin
1,000 tons of manganese ore
1,250 tons of cotton
3,400 tons of oilcakes

It may be added that the USSR did not deliver to Finland a single drop of the gasoline quota. A certain quantity of gasoline was, it is true, purchased from the USSR, but this quantity was not delivered on a treaty basis under the clearing agreement, as it had to be paid for in cash. Of the grain quota agreed upon, the USSR delivered only one half, including the last consignment of 20,000 tons which Moscow has so loudly advertised.
Document 69

Telegram from the Ministry for Foreign Affairs to the Moscow Legation, May 8, 1941

On May 5 the Foreign Minister, M. Witting, had a general discussion with M. Orlov. M. Witting gave M. Orlov to understand that in our view the USSR has presented, after the Moscow peace which was supposed to have satisfied the USSR, additional demands such as those relative to transit traffic to Hanko, Aaland, nickel, and has not carried out the promise to ship grain which is in accordance with the commercial treaty. These things create a psychologically unfavorable effect here. We do not know what question may come up after the nickel problem, which therefore has to be judged against this background. The nickel question can most easily and most speedily be arranged as an economic question, on the basis of the present setup; that is, without changing the situation as regards the concession or ownership. We do not, however, want to retreat from the position we took in the meetings of the Mixed Committee in Moscow. We are ready to continue negotiations even on that basis and suggest that they be carried on in Helsinki. But it is our hope that the USSR would once more consider abandoning the idea of a mixed mining company, for that would have a psychologically beneficial effect at this time. Our Charge d' Affaires in Moscow will soon present our reply.

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Re: Finnish-Soviet trade between Winter and Continuation Wars

Post by Kopyrda » 14 Jun 2021 18:47

Thank you for your exhaustive answers!

Seppo Koivisto
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Re: Finnish-Soviet trade between Winter and Continuation Wars

Post by Seppo Koivisto » 15 Jun 2021 21:03

I looked from statistical yearbooks what the Finnish crops and grain imports were from just before war to just after war. ... TO+1949%5D

Finnish crop of wheat and rye in kg/person:
1937: 167 kg/person
1938: 162
1939: 138
1940: 100
1941: 94
1942: 97
1943: 98
1944: 83
1945: 81
1946: 80

Finnish imports of wheat and rye in tons:
1937: 72 000 tons
1938: 76 000
1939: 37 000
1940: 120 000
1941: 148 000
1942: 176 000
1943: 202 000
1944: 213 000
1945: 220 000
1946: 253 000
In 1942 also 54 000 tons of rye flour was imported
1940 imports was 31 kg/person, 1945 was 55 kg/person

In 1939 Viipurin lääni produced 81 000 tons of wheat and rye, which was 15% of total crop. About 71% of its land area was ceded, which would correspond 58 000 tons.

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