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

611.60C31/12–1346

Memorandum of Conversation, by the Assistant Chief of the Division of Eastern European Affairs (Hooker)

[Washington,] December 13, 1946, 4 p.m.

Participants:69	Mr. Minc, Polish Minister of Industry
	Mr. Zoltowski, Financial Counselor, Polish Embassy
	Mr. Litynski, Commercial Counselor, Polish Embassy
	Mr. Lychowski, Polish State Planning Board
	Mr. Clayton, Under Secretary for Economic Affairs

Mr. Clayton suggested that the meeting open by agreement on an agenda. Minister Minc then presented a proposed agenda on behalf of the Polish delegation.⁷⁰ Mr. Clayton stated that it corresponded in general to the United States views except for the reference to credits for the Polish coal industry. On that matter he stated that he understood that the question of credits was now before the International Bank and that the Poles had presented an application for that purpose. Minister Minc replied that he had mentioned the question of coal in his conversation with Mr. Acheson and had understood that Mr. Acheson had agreed that it should be discussed. He wished further to explain that the application before the International Bank would not entirely cover the question of Polish coal. Mr. Clayton stated that he understood the application before the Bank had been for that purpose. He went on to say that the Bank was a preferable source for a long-term reconstruction credit for two reasons: first, because the Export-Import Bank had not been organized to grant long-term credits and had made such credits only recently and only for the purpose of bridging the gap until the organization of the International Bank. He further pointed out that the National Advisory Council had concluded that applications for credits of that nature should in the future go to the International Bank rather than to the Export-Import Bank. He stated as his second point that the resources of the Export-Import Bank were now almost entirely committed. Minister Minc stated that if the question of a credit for the purpose of reconstruction of the Polish coal industry were to go to the International Bank, the result would be a delay in the process of reconstruction of a year or more. Mr. Clayton doubted that the delay need be serious. He pointed out that the Bank was now organized and that the Polish application was among the items to be considered first. He said that he would be glad to discuss the coal question from the point of view of United States interest in the Bank and that he felt that any credits which might be granted for this purpose would have to come from the International Bank. Minister Minc said that he understood Mr. Clayton to mean that he was ready to enter into a discussion of the general question of Polish coal on the basis indicated. Mr. Clayton replied that this would be satisfactory and that the Polish agenda could be considered satisfactory with that understanding.

Mr. Clayton then suggested that the discussion proceed to the easiest item on the agenda, namely, aviation. He understood that since there were no Polish aviation experts present it would be satisfactory to limit the discussion to the preliminary stages and not to attempt to secure a detailed agreement. He pointed out that the United States Government had made 26 bilateral aviation agreements in the last 12 months and that he would like to be able to send to the United States Ambassador at Warsaw the information secured from a preliminary discussion and he also suggested that this Government should send an aviation specialist to Warsaw to negotiate a bilateral aviation agreement with the Polish Government along the lines of the other agreements negotiated by this Government, including agreement upon routes and the general conditions of transport between the two countries. Minister Minc replied that before expressing himself definitely he would like to have an indication of the types of agreement sought by this Government. It was thereupon agreed that the Polish delegation would be supplied with copies of several of the more recent agreements and that the Polish delegation would be prepared to discuss the matter further at the next meeting.

Mr. Clayton then inquired as to the meaning of the statement at the end of the Polish draft agenda under the heading of “General Remarks” to the effect that the questions of certification of the National Bank of Poland, the defreezing of Polish assets, and the procedure of the Export-Import Bank as to cotton and tobacco credits did not call for inclusion in the agenda “since they could be assumed as settled in substance”. In reply, Mr. Zoltowski referred to his several conversations with Messrs. Acheson, Hickerson and Thompson on these questions. He point out that he had supposed that the certification for the Bank of Poland and the defreezing of the Polish assets had been substantially completed until he had been informed by Messrs. Hickerson and Thompson that they were not prepared to discuss these matters any further at this time. He further said that Mr. Acheson had stated to him and Mr. Litynski that these matters would have to be deferred until four points which had been mentioned in connection with nationalization had been discussed and settled. He also referred to the necessary papers for certification of the Bank of Poland which he had brought from Warsaw and had presented to Secretary Snyder⁷¹ and which had been signed by Minister Dambrowski while the latter was in Washington. Mr. Clayton pointed out that the matters of certification, defreezing, and Export-Import Bank credits were not on the agenda and suggested that the conversation be confined to the points contained in the agenda, and in reply to Mr. Zoltowski’s question, said that he was referring not merely to the discussion in today’s meeting but to these discussions in general. Mr. Clayton further pointed out that he could not accept the assumption indicated under the heading of “General Remarks” on the Polish agenda that the questions referred to were settled since he considered that some of them were not yet settled. Mr. Zoltowski agreed that this was correct. Minister Minc then stated that Mr. Acheson had connected the matter of gold and credits with the question of nationalization and that it was for this reason that the Polish delegation considered them to be related matters. Mr. Clayton replied that in his view these questions would have to be discussed after the question of nationalization, and in a different setting. He further emphasized that an agreement upon the question of nationalization and upon the other points in the agenda should not be considered as binding the United States to take favorable action on the matters referred to by the Polish delegation under “General Remarks” although such agreement would greatly simplify the settlement of those matters. Minister Minc then suggested that a discussion of those matters be deferred but stated that he would reserve the right to come back to them later. Mr. Clayton replied that in his view the problem of nationalization should be considered on its merits now and that he would be willing to consider the other matters on their merits later but could not consider them to be connected with nationalization. Minister Minc then stated that the Polish Government had not originated the connection between nationalization on the one hand and certification, defreezing and Export-Import Bank credits on the other, but that the connection had been made by United States representatives. He said that there were various questions which both governments considered to be unsettled and that the purpose of his trip was to carry on negotiations which would result in the settlement of them all.

Minister Minc then said that he proposed two solutions: first, the questions raised by the Polish Government under the heading of “General Remarks” be made a part of the agenda but not to be considered as connected with the other parts of the agenda. Mr. Clayton said that he could not agree to this, especially with reference to the question of Export-Import Bank credits, although he would be willing to give them consideration after agreement had been reached on the matters contained in the agenda. He said that he could not indicate, however, what the position of the United States Government would be on the matter of such credits. Minister Minc then stated that his second proposal was that discussion of the points of interest to his Government be suspended at this time and raised at the next meeting. Mr. Clayton agreed that they should be deferred. He then went on to point out that the questions in connection with nationalization which had been raised by Mr. Acheson did not cover all the points of interest to this Government in that connection since it was the view of this Government that full agreement should be reached on all points germane to compensation of United States nationals. Mr. Zoltowski stated that the Polish delegation had supposed that only the points raised by Mr. Acheson in connection with nationalization were to be considered, that only these points had been communicated to Warsaw, and that the Polish delegation had instructions only upon these points. Mr. Lychowski then referred to the four points raised by Mr. Acheson in connection with nationalization,⁷³ and with reference to the fourth of these points, stated that the Polish Government had understood it to mean that the United States Government sought compensation in dollars only to the extent of original United States investments in dollars. Mr. Zoltowski said that he had understood Mr. Acheson in the same sense and that, in fact, he had asked Mr. Acheson to repeat his statement to that effect twice. He said that Mr. Acheson also stated that it was his primary concern that the principle of compensation should be agreed upon during these discussions but that the mode of payment was not a matter of immediate interest. Mr. Clayton stated that it was his understanding that agreement had already been reached upon two of the four points raised by Mr. Acheson, namely, the extending of sufficient time to enter protests, and the equal treatment of United States property interests in all areas under the control of the Polish Government. He added, however, that the four points had not been intended to be exclusive and that in the view of this Government it was necessary to consider all matters required in order to reach full agreement on compensation. He pointed out, for example, that it would be necessary to fix the terms of reference for a mixed claims commission.

Minister Minc then stated that while he was informed as to the four points raised by Mr. Acheson, he would like to know what the other points considered to be germane by the United States Government were, and he would then be in a position to indicate whether his powers enabled him to discuss them. Mr. Clayton stated that a memorandum would be prepared indicating what this Government has in mind, and suggested that the meeting be adjourned until Monday at 3 o’clock. In response to Mr. Zoltowski’s question he said that it might be possible to make this statement available to the Polish delegation by Saturday afternoon. Mr. Clayton then suggested that Mr. Thompson and Mr. Zoltowski meet and reach a full understanding as to what had been said in the meetings with Mr. Acheson and as to their meaning. Mr. Clayton then reiterated his own understanding that the terms of reference of a mixed claims commission would have to be agreed upon and that the agreement would have to be reached as to how and when United States Nationals would be compensated for their property interests.

Mr. Lychowski asked when the matter of commercial policy was to be discussed. It was agreed that a memorandum would be prepared upon this point and would be given to the Polish delegation on Monday.

69. The following officers from the Department of State were also present at the meeting: Willard L. Thorp, Assistant Secretary of State for Economic Affairs; Norman T. Ness, Director of the Office of Financial and Development Policy; Paul H. Nitze, Deputy Director, Office of International Trade Policy; George C. McGhee, Special Assistant to the Under Secretary of State for Economic Affairs; Livingston T. Merchant, Chief of the Aviation Division; Harold R. Spiegel, Chief of the Division of Financial Affairs; Dallas W. Dort, Adviser on Relief and Rehabilitation Policy; Wayne G. Jackson, Adviser on Emergency Organizations; Ben. T. Moore, Assistant Chief of the Division of Commercial Policy; Ernest A. Lister of the Air Transport Section of the Aviation Division; Llewellyn E. Thompson, Jr., Chief of the Division of Eastern European Affairs; C. Burke Elbrick, Assistant Chief of the Division of Eastern European Affairs; Mr. Hooker.
70. The Polish Draft Agenda apparently called for consideration of the following four items: 1) compensation for U.S. citizens in connection with the Polish nationalization act of January 1946; 2) credit assistance to the Polish coal industry; 3) questions related to aviation; 4) general commercial policy.
71. John W. Snyder, Secretary of the Treasury.
73. The four points raised by Acting Secretary Acheson during his November 18 meeting with Zoltowski are set forth in telegram 1116, November 22, to Warsaw, p. 519.