860C.5034/12–2446
Memorandum by the Director of the Office of European Affairs (Matthews) to the Acting Secretary of State
Mr. Acheson: I am seriously concerned at what I understand is the tentative agreement reached yesterday in the economic negotiations with the Poles. As I understand it, it was tentatively agreed that the procedure laid down by the Polish Nationalization Law would be followed. There would be a mixed commission to advise the Polish Council of Ministers on standards to be adopted for valuations with the understanding that the Polish Council of Ministers would promulgate its recommendations in the form of rules and regulations binding upon the Polish commissions which are to establish the valuations. No decision was reached as to whether the choice of a third member of the mixed commission should be dependent upon agreement by the Polish and United States members or whether in the event of disagreement, he should be appointed by the Secretary-General of the United Nations. The function of the mixed commission, however, would only be advisory. The Polish delegation rejected the proposal that there be a compulsory appeal to the International Court of Justice or any international arbitration body. They suggested instead that negotiations might be undertaken at a diplomatic level on such cases in which we felt the final action of the Polish valuation commission had been unfair. The ultimate disposition of these cases would be left to the results of such negotiations.
Up to the point of the tentative acceptance of this proposal, it had been the consistent position of the United States delegation that [Page 550] American interests would not be properly protected unless there were provisions for some sort of impartial determination of the value of United States properties nationalized.
The Poles have proposed, and I understand we are considering, that a public announcement be made of the “successful” outcome of negotiations and that the Polish delegation be given a written assurance, not for publication, that action on the proposed cotton credit may be expected by February 1. It is also proposed that a general statement of the above agreement be initialed before the departure of Minister Minc on December 27 and the agreement be worked out in detail at a later date.
I am very strongly of the opinion that the proposed arrangement for compensation is quite inadequate to protect the interests of United States property owners, that it will inevitably be the cause of serious criticism, especially from small Polish-American claimants, and it may well be the cause of serious embarrassment to the Department and to the Secretary after the convening of the new Congress.
In addition it should be borne in mind that any concessions made by this Government to Minister Minc prior to the forthcoming elections in Poland will be used by the Polish Provisional Government as proof of our support of that Government and to the detriment of the majority of the democratic elements of the country. The Secretary, himself, has already said that it would be preferable if any agreement on compensation and the return of Polish gold should be deferred until after the Polish elections.
The Poles say that Minc had been led to believe that the Polish cotton and tobacco credits would be considered at the same time as the arrangement for compensation and the Poles plead that he would be subject to very serious embarrassment if he were to return home empty-handed. I can perceive no reasons, political or economic, why we should be swayed by such arguments. Mr. Minc is one of the most stalwart Communists in the Warsaw Government. Any repercussions from the failure of his mission would redound only to the disadvantage of the Moscow-dominated group in Poland. He would not have come to the United States on this mission unless there was strong pressure of economic circumstances in Poland to seek an agreement with the United States. Acceptance of the Polish proposal has been based upon the false premise that they could not be brought to accept an arrangement which would provide for a truly impartial procedure for valuing United States property. Personally I feel confident that if we remain firm in our position, Mr. Minc will eventually have to make sufficient concessions to permit the establishment of what we consider [Page 551] to be a fair adjudication commission. This might well involve delays in the negotiations which would bring agreement after the Polish elections in accordance with the hope expressed by the Secretary.99
- The views expressed in this final paragraph closely follow those set forth in a memorandum dated December 23 from Francis B. Stevens, Assistant Chief of the Division of Eastern European Affairs, to Mr. Matthews (860C.5034/12–2346).↩