Foreign Relations of the United States, 1958–1960, Eastern Europe; Finland; Greece; Turkey, Volume X, Part 2

63. Preliminary Notes of the Operations Coordinating Board Meeting⁰

Washington, February 11, 1959.

1. REPORT ON POLAND (SECRET)¹

A. Linking Economic Negotiations with Negotiations of Settlement on Nationalization Claims

Mr. Albert W. Sherer, Officer in Charge, Polish, Balkan and Czechoslovak Affairs, was present.

Acting Chairman Gray questioned the connection of the third round economic assistance negotiations with progress in settlement of private US claims for nationalized property. He wondered whether economic talks should be held up pending progress on the claims negotiations. Mr. Sherer said that an instruction had been sent to Ambassador Beam requesting him to approach the Poles on starting the nationalization claims negotiation.² Mr. Sherer added that if the Poles agree we will go ahead on the third round of economic negotiations.

In further response to Mr. Gray’s general question about linking these two negotiations, Mr. Sherer noted that in view of Congressional and public interest in a settlement of the nationalization claims, the Department felt that the U.S. should not extend economic assistance to Poland indefinitely without attempting negotiation of the claim settlement.

Mr. Saccio (ICA) questioned whether the Poles know explicitly that we are holding up the third round of economic negotiations pending commencement of the claims negotiations. Mr. Sherer thought the Poles “have a pretty good idea that this is the case.” Mr. Saccio also questioned whether there is any good reason (apart from those cited by Mr. Sherer) to connect the two negotiations. He cited the broader purposes of aid to Poland such as our desire to demonstrate our sympathy for the Polish people and our desire to orient Poland more to the West in line with U.S. policy. Mr. Sherer, referring again to Congressional and public interest in the nationalization claims, noted that the Poles had been advised during the first round of economic negotiations that we would wish to discuss with them later a settlement of these claims³ and said that, from all the information available to the Department, the Poles are prepared to receive a bill at some time.

Mr. Gray said that the Poles apparently would see nothing untoward about a connection between the two negotiations and secured Mr. Sherer’s assent to his understanding that we plan to start the claims negotiations and not delay economic aid and that we can cut off the claims negotiations if that turns out to be desirable from the standpoint of U.S. interests.

Mr. Saccio noted that $20 million had been tentatively earmarked from MSP funds for Poland and that if the agreement is concluded too late in the fiscal year miracles will be expected in terms of delivering the goods which the aid level represents.

B. Strategically-Rated Goods

Mr. Gray, in opening the discussion of this topic, questioned whether the State Department is, in fact, moving ahead to get the Battle Act amended this year. He said that if the Department is doing so, he thinks that such amendments should be considered in the broader perspective of U.S. foreign policy around the world and not just from the perspective of Polish considerations. To support this point, Mr. Allen recalled difficulty with the Battle Act as regards India, due to Indian shipment of thorium to Communist China.

With respect to a Defense statement in the Report, which expressed general uneasiness about the strategic risk involved in certain exports to Poland, Mr. Gray said he felt that the Board was not serving its principals by covering up what was apparently a difference in viewpoint on basic policy. He said further that the Council on Foreign Economic Policy had been directed by the President to consider trade policies with the USSR and its East European satellites⁴ and that the CFEP (Randall Committee) was the proper venue for the issue which Defense was raising. Mr. Knight (Defense) said Defense distinguishes Poland from the broader program and feels that greater effort should be made to justify certain sales to Poland as being necessary to the civilian economy.

C. Problem of Polish Western Border

Mr. Gray referred to paragraph 12 in which the Report stated “the U.S. position on the German-Polish border should not be formulated until it appears that serious negotiations on a German peace settlement will take place … “.⁵ Mr. Gray said it was his impression that, given recent developments, we should perhaps be formulating a position on this issue. Mr. Smith (State) assured Mr. Gray that appropriate position papers preparatory to any upcoming high-level meetings were being prepared for consideration by the President. Mr. Knight asked whether the language in this Report would imply a ban on contingency planning. The Board agreed it did not.

D. Service by Polish Vessels to U.S. Ports

The report noted that the Department was considering whether to propose to Treasury a modification of the present port security program. Mr. Sherer said the Department had begun to send letters to the other interested agencies urging an early resolution of these questions.⁶ Mr. Scribner (Treasury) said he thought policy issues were involved and should be determined by the Planning Board. The members agreed on the desirability of early resolution of the matter.

E. Asylum for Polish Seamen

Mr. Gray recalled that two weeks ago the members had noted State and Justice would consult further on the criteria to be used in determining Soviet bloc crewmen eligibility for US asylum. [7 lines of source text not declassified]

The Board approved the Report for transmission to the NSC, with the understanding expressed by Mr. Gray that a later report would be made on the issue of the criteria for granting U.S. asylum to Polish seamen.

[Here follows discussion of unrelated subjects.]

0. Source: Department of State, OCB Files: Lot 61 D 385, M/OP Informal Notes 1959. Secret. Drafted by Jeremiah J. O’Connor.
1. The draft of the OCB Report on Poland, as submitted to the OCB Board by the Working Group on Poland, which was identical to the approved report printed as Document 64, has not been found in Department of State files.
2. This instruction was not sent until February 18; see footnote 5, Document 60.
3. The first round of economic negotiations with Poland began on February 26, 1957, and led to the Surplus Agricultural Commodities Agreement Between the United States and Poland, signed on June 7, 1957 (8 UST 799), and the Surplus Agricultural Commodities Agreement Between the United States and Poland Amending the Agreement of June 7, 1957, signed on August 14, 1957 (8 UST 1289). In an exchange of notes on June 7, 1957, both Poland and the United States agreed to undertake to negotiate a lump-sum settlement of American property claims resulting from nationalization and other property-takings by Poland.
4. Presumably reference is to NSC Action No. 1927 taken at the 369th NSC meeting on June 19. It directed that, on a case-by-case basis, the United States seek to establish more normal economic relations with Soviet-dominated nations with which the United States had diplomatic relations and thereby facilitate a gradual expansion of trade. See Part 1, Document 8.
5. Ellipsis in the source text.
6. Not further identified.