Memorandum of Conversation, by the Chief of the Division of Eastern European Affairs (Durbrow)
In the course of an extended conversation with Mr. Mikolajczyk64 he made the following comments on the economic situation in Poland. Since this was an entirely private conversation and he spoke most frankly, he asked that his remarks be kept in strict confidence.
Mr. Mikolajczyk expressed the sincere hope that arrangements could be made to grant credits to Poland as soon as possible since he was convinced that the granting of such credits from the west would constitute one of the best assurances that Poland would in fact regain her independence. He added that the Soviet Government had made many resounding promises of economic aid to Poland, such as the one that they would rebuild half of Warsaw, but that in fact none of these promises had been fulfilled, nor did he believe that any would be fulfilled in the near future. For this reason he felt it desirable for the United States and other countries in the west to make available to Poland as soon as possible goods on credit terms in order to show the Polish people that the west has an interest in them and their independence, and in order to show them that promises made by the west are fulfilled as expeditiously as possible. He added that he felt it was worth while from both political and economic points of view to assume even more than ordinary risks in granting credits to Poland and he expressed the firm conviction that these credits could be repaid.
In this connection he stated that while at Potsdam discussions65 [Page 401] had taken place regarding the possibility of granting credits of $300,000,000 to $400,000,000 but he did not feel that it was absolutely essential to grant such large credits if, for other reasons, we would not be in a position to do so. He stated that if, in addition to the considerable aid being given by UNRRA, the Polish Government could purchase approximately $150,000,000 worth of a few basic goods, reconstruction could begin and the country be started on the road to full recovery. He stated that the most essential needs of the country at the present time were the following:
- Cranes and cargo-handling equipment for ports.
- Railway transportation (cars and locomotives).
- Draft animals and tractors (7000 tractors are expected to be received from UNRRA and the bare minimum requirements would be at least 7000 additional units, with the hope that eventually 35,000 units could be made available.)
- Trucks, jeeps, et cetera.
- Construction equipment, bulldozers, cement mixers, et cetera.
Mr. Mikolajczyk explained that his country, of course, needed many other types of goods but he felt that with an adequate supply of the five types enumerated above great progress could be made.
Mr. Mikolajczyk stated that UNRRA supplies were arriving in greater quantities and were being handled much more smoothly at the present time. He also stated that the Polish people looked upon the UNRRA insignia as a holy sign which would mean their salvation. He admitted that there had been abuses and that further controls were obviously necessary but he hoped that the amount of UNRRA supplies could be increased to the maximum and if, for other reasons, it might not be possible to give considerable credits, that nevertheless the Polish people could be given further aid by adding to the planned UNRRA shipments. He stated that one of the principal things which UNRRA could do at the present time would be to increase the livestock and draft animal deliveries since the prewar herd had been reduced by 75 percent. In this connection he stated that the Red Army was not at present making further inroads into the herd except for a small amount of slaughtering.
Mr. Mikolajczyk explained in detail the reason why the Polish Government had consented to deliver to the Soviet Government 12 million tons of coal a year. Shortly after the establishment of the new government the Soviet authorities had suggested an exchange of stock in the Eastern Galician potash and oil deposits (which incidentally belonged to Poland previously) for Polish-owned stocks in German concerns in the newly acquired German territory in the west. Since this would have meant large Soviet control in Polish factories with only slight possibilities of the Polish Government’s exercising any [Page 402] influence in the potash or, oil industries of Eastern Galicia, Mr. Mikolajczyk led the fight to reject this offer. He was successful in having the offer turned down but was forced, as quid pro quo, to sign a commercial agreement providing for the delivery of 12 million tons of coal a year against the delivery of manufactured and other goods from the Soviet Union. He stated that since the coal arrangement was only a short-range agreement, he felt it advisable to make this sacrifice for the time being, rather than permit the Soviet Government to have permanent control of the industries in Poland. He regretted that in the coal arrangement he had also been forced to accept a very low value for the coal shipments. Under the agreement, coal which is sold by the Polish Government to other countries at $8.20 a ton is delivered to the Soviet Government for $1.20 a ton. Despite this low evaluation which was to be paid in Soviet goods, practically no goods have been delivered to Poland from the Soviet Union. He added, however, that despite the large commitments to Russia and other countries, there is still sufficient coal in Poland to make available considerable quantities to the west, the main difficulty being transportation.
Mr. Mikolajczyk recounted an interested sidelight on the reparations which Poland is to receive. According to the Soviet calculations Poland should receive approximately $350,000,000 in reparations from Germany. The Soviet authorities, however, stated that since they had arranged to have large sections of eastern Germany annexed to Poland and that since these areas contained factories and equipment valued at $950,000,000, Poland had already been paid three times the reparations which were due her and therefore, in theory, she should receive no further reparations. The Soviet authorities, nevertheless, stated that since they did not wish to prevent Poland from getting any reparations they would endeavor to see that approximately $350,000,000 worth of reparations are paid to Poland. Mr. Mikolajczyk pointed out that this was a very empty gesture since, if the Polish Government furnishes 12 million tons of coal a year to the Soviet Union for the five years of the agreement at the very reduced price, the Soviet Government would receive in value over $400,000,000 gratis. Mr. Mikolajczyk expressed the hope that since the Soviet Government had not fulfilled its part of the commercial agreement by sending in manufactured goods to pay for the coal even at the reduced price, it might eventually be possible for the Polish Government to abrogate the agreement because of Soviet non-fulfillment of the bargain.
I informed Mr. Mikolajczyk that as far as I was aware the United States Government in general would be willing to encourage the granting of credits to Poland. I added, however, that before it would [Page 403] be possible to do this there were certain matters which would have to be worked out—namely:
- An equitable rate of exchange.
- Abrogation of preclusive trade agreements with the U.S.S.R. or other countries.
- Presentation of concrete evidence showing that Poland would be able to produce a sufficient amount of goods to service and repay the credits.
- Make available accurate information on the economic stability and developments in the country.
I told him that the United States Government was greatly concerned about the efforts of the Soviet Government to bring about an economic bloc in Eastern Europe by concluding bilateral treaties which in effect tend to exclude all other countries from having an equal opportunity to trade in the area. I pointed out that there had been considerable Congressional criticism of the Soviet economic policy in Eastern Europe and that it therefore might be difficult, if not impossible, for the executive branch of the government to grant credits to Poland or other countries in the area until the policies of the countries concerned made it clear that these policies were not contrary to the basic economic policies of the United States.
Mr. Mikolajczyk stated that he realized there might be difficulties on this score but again expressed his conviction that the granting of credits by the United States would be one of the most important steps to insure that the Polish people could regain their independence. I again expressed the opinion that unless the four points enumerated above were met, it might prove most difficult to grant any credits.
In regard to land reform, Mr. Mikolajczyk stated that the Lublin group had endeavored to split the peasantry by pitting the landless peasants against those who had farms. He explained that this had not worked since the entire peasantry was in fact practically on the same level, the former rich peasants having lost most of their business, except for their land, and that they were all actually starting out from scratch, which prevented any basic rivalry from developing between the two groups. He explained that this situation had been brought about by the fact that the government was paying only twice the prewar prices for farm products while it charged five times prewar prices for manufactured goods. In other words, the prices of products of the farms from both the rich and the poor peasants were so low that they both had approximately the [same?] standard of living. He stated that the land reforms in Poland proper had not worked out well, had caused dissatisfaction among all groups, and therefore, since they were sponsored by Lublin, that group had lost practically all prestige with the rural elements. At one time the [Page 404] Lublin group was endeavoring to keep intact the large estates in the newly acquired German territories in order to make them into what would be the equivalent of Soviet state farms. Mr. Mikolajczyk had vigorously opposed this development and had finally made arrangements for the splitting up of the estates in order to give individual plots to settlers coming from east of the Curzon line.66
- Vice Premier Mikolajczyk visited Washington following his attendance at the United Nations Food and Agriculture Organization meeting at Quebec. During a courtesy call on Under Secretary of State Dean Acheson, Mikolajczyk touched briefly on the Polish economic problems detailed in this memorandum. The Under Secretary’s memorandum of conversation of November 8 concluded as follows: “I made no particular comments on any of the questions raised by Mr. Mikolajczyk.” (860C.01/11–845)↩
- See footnote 92, p. 376.↩
- Regarding the Curzon Line, see footnote 27a, p. 116. In the treaty between the Union of Soviet Socialist Republics and the Polish Republic on the Soviet-Polish State Frontier, signed at Moscow on August 16, 1945, the Curzon Line, with certain deviations specified in the treaty, became Poland’s eastern frontier. For text of the treaty, see United Nations Treaty Series, vol. x, No. 61, p. 193.↩