FINNISH PAPER & TIMBER JOURNAL - MONTHLY REPORT NO. 6 - 1948

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00926A000500030019-5
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 9
• Document Creation Date: December 14, 2016
• Document Release Date: April 23, 2001
• Sequence Number: 19
• Publication Date: August 17, 1948
• Content Type: REPORT

COUNTRY
Finland
DATE DISTR. 17 Aurryust 1941
SUBJECT
Finnish Paper & Timber Journal
NO. OF PAGES
1
Monthly Report 110. -
PLACE
ACQUIRED
DATE
ACQUIRED
NO. OF ENCLS.
(USTED BELOW)
SUPPLEMENT TO
REPORT NO.
THIS DOCUMENT CONTAINS INFORMATION AFFECTING THE NATIONAL DEFENSE
OF THE UNITED STATES WITHIN THE MEANING OF THE ESPIONAGE ACT SO
U. S. C.. 31 AND Ex. AS AMENDED. ITS TRANSMISSION OR THE REVELATION
OF ITS CONTENTS IN ANY MANNER TO AN UNAUTHORIZED PERSON IS PRO.
VISITED BY LAW. RRPRODUCTION OF THIS FORM IS PROHIBITED. HOW-
EVER. INFORMATION CONTAINED IN BODY OF THE FORM NAY BE UTILIZED
AS DEEMED NECESSARY BY THE RECEIVING AGENCY.
SOURCE DOCUMENTARI
THIS IS UNEVALUATED INFORMATION FOR THE RESEARCH
USE OF TRAINED INTELLIGENCE ANALYSTS
On file in the CIA Library is a copy of the Finnish Paper & Timber Jouz' as
Monthly Report, No. G, June 1948. It contains articles entitled:
(a) "The Timber Agreement and Some of Its Consequences"
(b) "Soviet Union Reduces Finnish Reparations by O Per Cent,,"
t A IflC, TiO~. ~c is
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INFORM C PORT
CLASSIFICATION RESTRICTED
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1948
THE FININRSI PA2A AND TIMBER JOURNAL
MONTHLY REPORT
No. 6
THE TIMBER AGREEMENT AND SOME OF ITS CONSEQUENCES.
By Mr. Roll Serlachius.
Managing Director of the Finnish ?cviumill Owners' Association.
As will have appeared from the daily press, agree-
ment was recently reached after negotiations in Hel-
singfors between the Board of Trade Timber Control
and the Finnish Sawmill Owners' Association on the
subject of sawn goods deliveries to Great Britain in
1948.
The total quantity fixed in the Anglo-Firmish trade
negotiations in London in March is 120 000 standards
of ordinary sawn timber, in addition to which the
Timber Control is entitled to buy further 5 000 stds.
of sawn birch-wood and 15 000 stds. of small timber.
The fact that the Swedish sawmills in the cour,,e
of the negotations in Stockholm towards the end of
April had accepted the British prices of last year
automatically had a prejudicing influence on the
British market, considering that a quantity of no less
than 185 000 stds. was concerned. In these circum-
stances the Anglo-Finnish price negotiations were
restricted in the main to the task of harmonising the
prices for the different dimensions and qualities to
the level accepted by the Swedes.
It will be remembered than before the war the
leading Swedish productions sometimes used to attain
a slightly higher price than corresponding Finnish
goods. In general the difference was not great; often
for battens almost no difference was to be found,
whereas Swedish u/s boards reached a price about
5/- to 10/- higher than the corresponding Finnish
goods.
Examinations of quality and bracking carried out in
recent years at the initiative of the Finnish Sawmill
Owners' Association have showed, however, that
no differences in quality warrant such a discrepancy
of the price. On Finnish side reason thus existed to
advance a demand for complete equality in respect
of basic prices to those of Swedish goods. Nor were
any really matter of fact arguments against these
views advanced by the British negotiators, and the
principle of equality was therefore accepted.
When nevertheless the British delegation deman-
ded a considerable difference in prices between equal
productions of Swedish and Finnish goods, this was
therefore due to other reasons. One of the reasons
231389
r eferred to was the inferior Finnish specifications. And
it roust be admitted that those sawmills, on which
compulsory obligations has been imposed under the
rc 1 arations agreement or under the current Fenm,-
oviet trade agrement, i.e. practically speaking all
the bigger or medium sawmills, owing to the difficult
Russian specifications, which probably can be com-
pared with stock notes from Archangel, but which
considerably exceed the average natural rawmaterial
resources in Iiinland, have experienced some difficulty
of offering specifications fully corresponding to the
ideal specifications of prewar times. The considerable
change in the import into certain countries has on
the other hand. to some extent made it possible for
the shippers to maintain a good average specification.
A comparison between the prewar total specifications
and those of the past few years proves, however, that
on the whole our shippers, with a few minor exceptions,
have succeeded remarkably well in their efforts to
offer the British market the prewar specifications.
As no essential difference in respect of specifi-
cations thus existed, the British demand for a price
reduction was turned into a declaration in which the
Controller expressed his expectation and trust that
the specifications to be offered this year will fulfil
reasonable British requirements.
The principal cause of the difficulty in obtaining
for Finnish goods the same price as for Swedish goods
has consisted in the unquestionably higher freights
from Finnish ports. This difference in freight, which de-
veloped during the recent years, is a direct consequence
of the higher loading costs and the less satisfactory
stowing in Finnish ports than in Swedish. According
to information provided by the chartering department
of the Timber Control, freights from Finnish to British
ports in 1947 were on an average 17/6 higher than from.
Swedish ports. Also in many other countries timber
buyers and agents have pointed out this drawback,
and have demanded that this freight difference should
be taken into account when fixing the fob-price
for Finnish goods.
In the course of the converr.atior:s with the represen-
tatives of the importing countries, both during nego-
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TIE FINNISH PAPER AND -TIMBER JOURNAL
N:o 6, 1948
SOVIET UNION REDUCES FINNISH REPARATIONS BY 50 PER CENT.
On June 3rd the Envoy of the Soviet Union in
Helsinki, General Lieutenant Savonenkov, informed
the Finnish Government that the Soviet Union had
decided, to approach the Soviet Government on the
question of mitigations in the reparations, to reduce
the reparations remaining after July 1t, 1948 by
50 per cent.
It is needless to say that this announcement, of
such importance for Finland, was received with the
greatest pleasure throughout the population. This
pleasure was expressed in numerous speeches of pro-
minent representatives of Finnish public life and in
addresses to the Soviet reprer.entative, made by differ-
cut bodies. Various authoritative statements regard-
ir:g the significance of the reduction were also
made, although no specific details are as yet available,
and exact calculations of the meaning of the reduction
are therefore as yet difficult.
t)f the entire reparations arnou.nt of 300 million
dollars worth of goods, assessed essentially on the
hasis of the prices in 1938, about half has been paid.
Half of the remaining reparations thus amounts to
ab. 75 mill. >reparation dollars, but in view of the
very considerable rise in prices since 1938, the present
dollar parity of the reduction is considerably higher.
l+:xact calculations are difficult: but one may count
with up to the double amount. The estimates of
the Finmark value of the reduction has varied from
Finks. 20 000 to Finks. 30 000 millions.
Tt is not yet known in what way the reduction will be
applied, whether it will be spread equally on all the
different items of the delivery programme or not, and
negotiations for revision of the delivery programme
will take place in the near future. It is considered
probable that the deliveries will continue until 1952
as previously provided.
It is obvious, however, that the effect will be very
beneficial to Finland's national economy. If deliveries
of her typical export goods are substantially reduced,
her capacity of earning more exchange or import
facilities will be correspondingly increased. If deli-
veries of metals and machinery are considerable, less
exchange will be needed for such raw materiels, and
more materials or engineering capacity can be used
for such purposes as renewal of e.g. woodworking
industry plant. The direct effect on state expenditure
is a reduction of roughly Fmks. 6 000 mill., or about
10% of the annual state expenditure. This should
make the taxation task of the treasury easier and
should also contribute to the possibilities of stabili-
sation.
Simultaneously with this announcement it was
also officially confirmed that Bank of Finland had
decided to accept a credit of 5 million dollars from
the Soviet Union, carrying 2% interest. Also in
respect of this loan, further details are still
lacking.
tiations and in private discussions, the Finnish
side has referred to the very difficult labour situation
in recent years, repeated wages adjustments etc. At
the same time it has been underlined that conditions
have now undergone an essential improvement,
particularly in respect of available manpower, equip-
ment etc., which for 1948 should contribute to-
wards normal results.
In view of all the favourable factors existing for
satisfactory fulfilment of the annual shipping pro-
grarmne, we would seem to have possibilities not
only of restoring the prestige 4 the Finnish ports
and the confidence in their capacity but also - and
this is essential - of eliminating all really weighty
reasons for a price discrepancy against this country.
The price to the country in the shape of this
difference between equal Swedish and Finnish goods
on account of the above mentioned drawbacks in
Finnish ports, may be calculated at somewhat over
# 300 000 this year. In view of the obvious risk of
future quotations being prejudiced if the development
in this respect is unfavourable one way or another,
every reason thins exists for paying the greatest atten-
tion to this year's shipments in this respect.
In spite of the fact that Finland has had to
pay this painful penalty, a slight improvement of the
prices as compared with those of last year has been
attained, but the increase in price is only a few per
cent.
It is naturally difficult to make a forecast of the
development of prices for rawmaterials and other
costs of production, but certain trends can nevertheless
be distinguished. It is already now obvious that the
raw material prices for logs obtained during the past
winter and the cost of production will exceed the
previous estimate. Both timber prices and more
particularly the cutting and transport costs have
risen so much that together with other cost of produc-
tion, the producer cost of the sawn goods has risen
40-50 % compared with last year. The small raise
obtained for the goods to be shipped to England thus
does not cover more than a very small fraction of the
rise in production cost. In view of this fact a re-
duction of the raw material price seems inavoidable.
How this reduction should be divided between
the root prices and the producing costs is a problem
of conflicting interests, which in this connection has
to be left aside. What the industry can say for itself
is that the possibilities of effecting such economy in
costs through the means of rationalising procuring
work, that it would to any appreciable extent reduce
the margin of loss, are extremely restricted.
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THE FINNISH PAPER AND TIMBER JOURNAL 3
THE VISIT OF THE SPORTS TEAM FROM ALBERT E. REED & CO. LTD.
On June 7th, the sports team of the well-known
paper making concern of Albert E. Reed & Co. Ltd.,
arrived in Finland by the S.S. Arcturus. The visit
will last till June 20th and the programme includes
not only sports events but also excursions to different
places in the country. The visit takes place at the
invitation of the United Paper Mills Ltd., and is in
response to a similar excursion to England last year
of a team from the United Paper Mills.
The British group consists of 4 leaders and 27
sportsmen, all headed by the Managing Director of
the company, Col. C. D. S h e 1 d o n, who is ac-
companied by his daughter and son. The football team
consists of 15 players, and has competed with consider-
able success against amateur teams in England. The
number of runners, participating either in the cross-
country run or the relay race totalled 12. The most
prominent of these runners is J. Charlesworth who
a couple of years ago represented England in a contest
against France.
Upon the arrival in Helsinki of the team, the guests
were invited to luncheon at the Vaakuna restaurant,
Mr. W. Grasbeck, the Managing Director of the Finnish
Cellulose Union being the host. Among the guests
were Mr. J. W. Walden Managing Director of the
United Paper Mills Ltd, Mr. Purkiss, Director of the
Price and Pierce Ltd, London and the famous Finnish
runner Paavo Nurmi. Mr. Grasbeck addressed the
guests in a welcome speech as follows:
It is really a great.pleasure for us to-day to see in
our midst so many representatives from our friends
Messrs. Albert E. Reed.
We have had a very close connection with Albert
E. Reed for a long time. The beginning in 1922 was,
naturally, on a very modest scale. By 1939 business
had grown to a substantial size. The war years, how-
ever, interrupted trade between the two countries,
but after these war years deliveries have happily
shown a steady increase and our sincerest hopes are,
that we can soon return to normal trading conditions.
However, much as we are interested in our e x-
p o r t s, we have also the keenest interest in s p o r t.
The purpose of your visit here this time is not busi-
s.iness, in fact it is for the improvement of our existing
friendly relations, which I know will be achieved
during the various games that are to take place.
I know that Colonel Sheldon is, as always, very
busy at home, and, therefore, I very much appreciate
that he has found time to come here and, even more
so, that he has been able to bring with hini some of
Reeds' representatives in the form of a team of
sportsmen. It will be a great occasion here to see the
games between your team of sportsmen and our own
- s p o r t being for you as well as for all of us here
of vital interest.
In addition to the games and the running events
that are to take place, you will have the opportunity
of seeing something of our country and the conditions
here. Above all you will have the chance to see some
of our industries at work. I am sure that for many
of you this will be your first visit here and, therefore,
I would like to remark that Finland like your own
country suffered severely during the war years. The
cities, villages and factories are in great need of re-
pair, and much time and energy is still required for
building homes for our work people. What you are
going to see is, therefore, not Finland as it was be-
fore the war, nor what we think it ought to be, but
at least I can say that we are all working hard.
During your stay here you will in particular have
the opportunity of seeing our woodworking industry.
This industry is the most important one in our country.
E x p o r t is of vital importance for us, and the wood-
working industries' share of it is about 95 %. Chemical
woodpulp represents about a quarter of this wood-
working industry. The sawmilling industry is also
about a quarter and the other important industries
are paper, board and plywood. T e x t i l e s are also
considerable, though the production during the war
and since has been seriously limited by the lack of raw
materials. As a result of the war and its consequences
our m e t a 1 industry has also made very remarkable
advances.
I have made reference to these matters so that,
when you are looking at our country, you will better
understand what you are going to see. I hope you
will enjoy yourselves. For our part we will try to
show you as much as possible, and I hope that, when
you go back home, you will take with you a good
impression of Finland and feel that you would like to
come and see us again.
Personally I ant very delighted to be with our old
friends Albert E. Reed. I remember the days when
I called at Cannon Street and the happy understand-
ing that has grown up between our respective organi-
zations. In this connection I must make reference to
my good friends Sir Ralph Reed - a tower of strength
to the British paper industry - and to Colonel Sheldon
whom we are delighted to see here in person to-day.
I am very pleased that we have here to-day a person,
who I am sure I can say is known throughout the
world-Paavo Nurmi.
It gives me a very great pleasure to see you all here
,and to wish you a very hearty welcome to our country.
Before you leave this room I would like you all to
take with you a small memento of Finland in the
form of a book.
In his reply speech Col. Sheldon expressed the
pleasure of the guests of having had such a pleasant
opportunity of visiting Finland and he was particu-
larly pleased to find Paavo Nurmi, who enjoys such a
high esteem in England, among the guests at the party.
He also drew attention to the extremely amicable
relations which have always existed between the
Reeds company and the Finnish Cellulose Union.
When representatives of the United Paper Mills
again next year visit England and British teams
continue to visit Finland this means that in the
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THE FINNISH PAPER. AND TIMBER JOURNAL
N:o 6, 1948
Mr. Walden, Managing 1)irecter of the United Paper Mills Ltd. Oy addressing the guests in a welcome speech.
Miss Sheldon is sitting on the right side of Mr. Walden.
course of years a direct link will be established bet-
ween the workers of two concerns of about equal size.
- __ Paavo Nurmi also made a short speech. in which
he referred to pleasant recollections from his running
contests in England, and Mr. Purkiss spoke about
Anglo-Finnish cooperation.
N. the afternoon of the same day the team departed
for Nyllykoski. The following day was occupied by
excursions in the mills and. the vicinity. In the even-
ing a welcome festivity had been arranged at the
Seuratalo restaurant and club quarters.
On Wedne, day the journey was continued to Kotka,
where the Sunila sulphate mill was inspected. At
Kotka the team wes invited to luncheon by the Enso-
(Intzeit company. After -a;ome excursions among the
islands and visits to the sawmill of Enso-Gutzeit con-
cern, the tears returned to Mylh koski in the evening.
The main events took place on 'I'hursday, June 10th.
At a luncheon party a welcome speech was made by
Mr. Walden on behalf of the United Paper Mills, Mr_
Walden's address was as follow..: -
On behalf of my Board of Directors I have the plea-
sure of wishing our far-away guests, Colonel Sheldon
and his men, heartily welcome to this luncheon. I am
also pleased to ,see on my left Mr. Thomas, personal
representative of the British Minister in Finland.
At the same time may I welcome Mr. Purkiss of
Price & fierce Ltd. and other representatives of the
same firm, the General Manager of Kansallis-Osake-
1'ankki, Mr. Virkkunen, many leading men of the
i ndustries* of the Kymi. river valley and high officials
of the various organizations of the Finnish industries,
as well as the honourable representatives of the local
civil and military administrations. I am especially
glad to see amongst our guests Mr. Paavo Nurmi,
better known as the >Flying Finnr>.
We have gathered here today to attend the sports
contest between the teams of Albert E. Reed & Com-
pany and their subsidiary mills and of the United
Paper Mills. These are the second contests between
our companies, but the first ones to take place in
Finland. The event as such is quite unique and a
most visible testimony of the deep interest in our
country that is to be found in England. Especially
it is a token of the great attention shown by Colonel
Sheldon and his firm, Albert E. Reed & Company,
towards us. From old we know Colonel Sheldon to
be a close friend of our country, but it is not until
now that we have the pleasure of seeing him for the
first time over here. Everyone here present knows of the
fine reception our sports team was given by the Albert
E. Reed & Company when visiting England last
autumn. We in our turn will now try to do our very
best to prove our gratitude and to show our English
guests part of our country and acquaint them with
our people and our ways of living.
The Minister of Education, Mr. Heljas who is unable
to be with us due to Government obligations, has
sent his best greetings on this occasion, and has
asked me to express how pleased he is that this visit
has now materialized. He sends best wishes for the
success of the whole trip and for the contests ahead.
Gentlemen, when wishing you all welcome here
today I suggest that we all honour our English guests
by drinking a toast to Colonel C. D. Sheldon.
In the afternoon the sports event commenced at
the Myllykoski sports grounds. The sports events
had previously drawn much attention and the pre-
parations for the contests were carefully planned.
The countryside was festively clad decorated with
English and Finnish flags. There were about 4 000
spectators present and numerous guests. [Apart from
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THE FINNISH PAPER AND TIMBER JOURNAL __ _
Start. of the crows-Country running.
Mr. Sheldon and his daughter and ,,on, there were
Mr. Thomas, the personal representative of the
English Minister, the General Manager of Kansallis-
Osake-Pankki, Mr. Virkkunen, Air. Purkiss, Mr.
Paavo Nurmi as well as many representatives of the
industry. On the whole the occasion proved to be a
pleasant sports festival. Work was suspended at the
mills prior to the commencement of the games in
order to enable all workmen to be present. The both
teams marched from opposite sides of the grounds
towards the middle. The National Anthems were
sung, whereafter. a short opening address was deli-
vered by Mr. J. W. Walden who stated: -
Our English guests, the sportsmen of Albert E. Reed
& Company, I should like to wish you rnost heartily
welcome to the contests between our two firers that
will now follow. We still have a happy meniorv' of the
fine reception we were given last autumn in England
and the exciting and fair competitions on Cobdown
Ground. I hope that the contests ahead will be carried
out in the same spirit, and that they, as well as all
your trip will remain a pleasant memory for you.
I declare these competitions opened.
The Guests of Honour, the Managing Director of
Albert E. Reed & Co., Ltd, Colonel Sheldon, Mr. I'aa,vo
Nurrni, etc. then greeted the sportsmen on the field.
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(i THE FINNISH. PAPER AND TIMBER JOURNAL
The football match was perhaps the most exiting,
I n general it had been expected that this was the event
in which the British had the greatest chances of
scoring a victory. But after they long journey and the
excursions after the arrival it seemed that the British
team was perhaps not at its absolute best and as in
addition it was rather unlucky on one or two ocea-
,ions, the match ended :3-1. in Finnish favour after
a good and interesting match, e:-.pecially in the second
half. The first half ended 0-0.
11 was a festive moment when the football team of
the Yhtyneet Paperitehtaat ().akeyhtio, after they
had received the grand chall'nge prize from Miss
Sheldon, carried their Captain V. Asikainen, in a
golden chair from. the ground. Vext time the compe-
I.i.tion for the cup will take place in England.
The same handicaps apparently also affected the
13r rush participants in the running events. As regard;
the cross-country race, the bet had been in favour
of the Finns, and on their own home truck they were
not to he beaten. The cross-country race was won
by I', Lyytikkh in 31 ruin. 4 ",2 seconds, followed
closely by J. Charlesworth in 31 min. 53.0 seconds..
Altogether the match was clo