OBSERVATIONS ON DRAFT PEACE TREATIES



  It is doubtful whether Finland could have acquitted herself of this
burden had she even been in possession of her full capacity of produc-
tion such as it was before World War II. It is true that the foreign
payments balance, for instance under the favourable conditions in
1934-1938, gave an average net annual surplus of about 20 million
dollars, but even such a surplus would have been scarcely sufficient
to cover an appreciable part of the annual expenses for reparations,
etc. evenly divided over the eight years. But, in fact, Finland's
economic resources have further greatly deteriorated on account of
the war.
  Thus Finland has been obliged to cede roughly 13 per cent of her
territory with all real property situated there. In 1938, these ceded
areas accounted for 10 per cent of the whole country's industrial, farm-
ing and forestry production About one-third of Finland's water-
power, both exploited and under construction, was to be found there.
German devastation in Northern Finland in autumn 1944 rose to about
107 million dollars. In other parts of the country damages caused
by bombings and other direct acts of war were 210 million dollars.
Inner communications have been badly upset and the merchant fleet
has been reduced by two-thirds. Fields have fallen into decay and
farm, industrial and town buildings are in bad repair. Railways and
roads, machinery and productive plants are in a bad state and have
become technically obsolete, and their efficiency has consequently
greatly declined. The automobile park is practically worn out.
Stocks of raw materials, dealers' stocks and private stocks of con-
sumers' goods such as clothing, household articles, etc., are either small
or inexistent. Finland's material national wealth is estimated to have
fallen by at least 1,000 million dollars at 1944 prices, which makes
about 25 per cent of her national wealth before the war.
  Finland's resources of physical labour have also diminished during
the war. She lost 85,500 men in killed and missing, or 7.2%o of the
able, male population in 1938. Besides this Finland has more than
50,000 invalids whose ability is substantially reduced. The labour
-crisis would have been greater still if the whole population of the
ceded territories, about 436,000 people, had not moved over to Finland's
present territory; but on the other hand the re-establishment of a dis-
placed population of more than 10 per cent of all inhabitants in the
country, and the task of providing these people, who were torn off
from their homes and their occupations, with productive occupations
corresponding to their capacities, have caused the country enormous
difficulties and expenses and cannot be carried through within the
space of a few years.
  Lastly, prevailing conditions have not even allowed Finland to
make the best of these essentially reduced productive forces. This



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