Foreign Relations of the United States, 1946, Eastern Europe, The Soviet Union, Volume VI

740.00119 Council/9–2446: Telegram

The Acting Secretary of State to the Secretary of State, in Paris

secret

Washington, October 5, 1946—1 p.m.

5319. Secdel 1058. For the Secretary from Clayton.³³ Upon receipt of your 4864 Sept 27,³⁴ I asked US Executive Director of International Bank for statement of present status of Polish application to Bank and of proposed procedures for consideration of application within Bank. His statement as of Oct first follows:

• “1. Polish Financial Counselor on Sept 24 left with the President of the Bank a letter from the Polish Minister of Finance³⁵ transmitting a brief memorandum outlining the Polish reconstruction program and stating that Poland would seek International Bank credits of $600 million over a 3–year period. The Financial Counselor stated that Poland would request approximately $200 million for expenditure in 1947. A rather general description of the reconstruction plan has since been brought to Washington by the Polish Minister of Finance who is Governor of the Bank. This plan was approved in the last few days by the Polish Congress and is now being translated into English at the Polish Embassy. The Poles will not present detailed specifications of their 1947 $200 million requirements for 2 or 3 weeks.
• “2. The Bank’s Loan Director is meeting with the Poles on Oct 2 for a general discussion of procedure and a preliminary discussion of the Polish situation. He is meeting on Oct 1 and 2 also with representatives of Denmark, Luxembourg and France. It is further expected that during this or the next week loan applications will be received from the Netherlands and Chile. Moreover, we have some reason to believe that the Department and the Export-Import Bank’s action pursuant to your direction will result in the $50 million Czechoslovakian program being brought to the attention of the International Bank very shortly as a specific program under the general letter of intent to apply for loans eventually totaling $350 million received from the Czechs last August.³⁶
• “3. The President and Loan Director may be expected to report on all of these loan developments to the Executive Directors of the Bank on Oct 8 and then or very shortly thereafter the Executive Directors will probably set up one or more ad hoc committees of their own members to consider authorizing the pursuance of negotiations by the administration of the Bank, the composition of the individual country loan committees required by the Articles of Agreement, and preliminary negotiating instructions. Such ad hoc committees should act very quickly—probably during the same week.
• “4. If such procedure is followed, procedural arrangements for considering the Polish application would be established by about Oct 15 and preliminary study of the Polish request by the statutory loan committee (composed of staff members and a representative of the Polish Government) initiated. No formal reports on which actual loan action might be taken by the Executive Directors would be anticipated before the middle or latter part of November, but during the period of study and negotiation some indication of policy would of course be inevitable.”

From the foregoing you will note it is not proposed that any formal reports will be made or definitive action taken until some time after your return. On the other hand it would be extremely difficult and embarrassing, in light of our commitments as a member of the Bank, to oppose preliminary discussions and study along the lines set forth in above statement. It is my understanding from your recent telegram that you desire to avoid definitive action but that you would not object to preliminary discussions as envisaged above. It would not seem to me that such discussions would be at variance with the broad objectives outlined in your 4787 of Sept 24 (Delsec 986).³⁷

Upon your return we can discuss in greater detail what course of action we can pursue, in light of our commitments as a member of the International Bank and Fund, to achieve your objectives of preventing or limiting assistance to countries opposing the principles for which we stand. In this general connection, the US Executive Director has made the following suggestion:

“We could take advantage of the relatively large demands now being made by applicants and the fact that the Bank can enter into commitments for but $400–$500 million this year to proceed very cautiously with the Polish and possible Czech requests. Western European countries will probably be receiving some $300 million, and Latin America say $50 million. The status of applications is such that these requests will probably be acted on a little more quickly than those of Poland and Czecho. The Bank would in no case wish to allot more than $75–100 million to Eastern European countries this year, and possibly not more than $50 million to one. The Bank could choose the very best projects, linked to Western European economic needs which would help to insure hard money proceeds for interest and amortization.

“This method would be consistent with the Articles of Agreement, would insure the consideration of only the best economic projects of Eastern Europe, and would permit a cautious development of our participation through the Bank in such lending activities.”

Acheson

33. William L. Clayton, “Under Secretary of State for Economic Affairs.
34. Not printed; it read as follows: “I have seen press reports to the effect that Poland has asked for 600 million dollars loan from the World Bank. I assume that no early action is contemplated on this application but would like instructions issued to make certain that it is not considered until after my return.” (860C.51/10–146) In telegram 4969, Delsec 1027, October 4 from Paris, the Secretary took note of the reports that Poland might be seeking additional financial assistance for the development of its coal industry. The Secretary, who expressed his awareness of Europe’s urgent need for coal, set forth his ideas on the subject in the following manner: “Certainly we should give no financial assistance to Poland without absolute guarantees that a reasonable proportion of coal exports will be allocated to countries west of the iron curtain.” (740.00119 Council/10–446)
35. Konstanty Dabrowski.
36. For documentation regarding the question of possible economic assistance to Czechoslovakia, see pp. 178 ff.
37. In this telegram, the Secretary reviewed United States policy with regard to economic assistance to various countries in Europe and the Near East, particularly Greece and Turkey. The telegram said in part “In a word we must help our friends in every way and refrain from assisting those who either through helplessness or for other reasons are opposing the principles for which we stand.” For the full text of this telegram, see vol. vii, p. 223.