Foreign Relations of the United States, 1949, Eastern Europe; The Soviet Union, Volume V

611.60C31/3–1949: Telegram

The Secretary of State to the Embassy in Poland

secret

Washington , April 9, 1949—3 p. m.

228. Dept appreciates frank analysis urtel 421 Mar 19.¹ Esp interested appraisal effects US econ policies by friendly Pol and West observers. Such appraisal essential to policy formulation. Suggest Emb pouch reftel all East Eur Missions, London, Paris, Geneva, Brussels, The Hague, Stockholm, Oslo, Copenhagen, Rome and Bern.

(1) Re effects curtailment US econ assistance Pol, fol shd be noted. US decision terminate UNRRA only partly prompted polit considerations re East Eur; decision partly based expectation prompt econ revival Eur, large-scale lending IBRD, etc. Re Post-UNRRA relief, Dept initially included Pol among beneficiaries bill, recognizing continued food problem; decision exclude Pol made by Congress, based in part recommendations then made Emb Warsaw. Re US loans, shd be noted $40 million Eximbank loan was granted, as was $50 million OFLC surplus property credit.² These credits not suspended as case Czeeho. Re IBRD credits, decision re coal mining equip’t loan extremely difficult; Dept recognized strong econ and polit reasons favor such credit, esp re ERP, East-West trade and encouraging pro-Western elements Pol, though believed negative polit considerations (esp Pol failure meet internatl obligations, e.g, compensation nationalized properties) overriding. Any event IBRD coal mining equip’t loan Pol considered pointless now in view greatly eased Eur coal supply situation. Also believe Pol wld have been wiser decide participate IBRD timber credit (as did Aus, Yugo, Finland, and Czecho likely to do) instead turning down participation with provocative statement, as this might have opened door larger IBRD credits in future. This wld have been more constructive for Pol than Katz-Suchy’s³ violent tirades against IBRD, ERP at last ECOSOC session.

In sum, (a) What were polit benefits to US of loans granted? (b) If argued those loans too small, cld larger loans have retarded Sovietization Pol in Embs opinion? (c) What are Embs recommendations re US or UN econ assistance Pol now? (d) Is there still time retard Sovietization Pol?

(2) Source here considered reliable reports Communists purposely maintain trade with West to obtain goods not available from Sov and “confidentially” announce hope thus achieve independence from Sov. Source states Mine⁴ and Berman⁵ have consented this approach and Mine “confidentially” states Sov displeased these transactions while in fact he has full Sov consent. Dept considers this in accord with Communist methods and well calculated to assist attainment their objectives. While regret our policies may alienate some true friendly non-communists, believe most such individuals realize industrialization paves way collectivization and fuller Sov control, and building Sov war potential diminishes prospects ultimate independence.

(3) Re effects US export control policy, Dept aware strictness US controls coupled with less strict controls OEEC countries (a) may fail achieve total objective retarding growth Sov war potential; (b) may involve some discrimination against Amer manufacturers, exporters; (c) may alienate some our friends in East Eur; and (d) may make US policy subject misunderstanding in West Eur. This situation regrettable but probably unavoidable because (1) West Eur’s dependence on East-West trade under ERP and polit objections some OEEC countries (esp Sweden, Switzerland) to strict controls, and (2) polit pressure in US (Congress, public opinion) for strict controls.

Question is: have benefits US export control policy outweighed disadvantages? (a) Dept considers probable that US refusal grant export licenses for steel mills to Pol and Czecho has retarded growth “Second Ruhr” Silesia. Wld appreciate Embs opinion. (b) Likely many other items (esp certain ball bearings, machine tools, precision instruments) restricted by US East Eur able obtain West, esp Sweden, Switzerland. (c) Net effect restrictions on growth econ-mil potential Sov bloc difficult evaluate, but Dept not overly optimistic this score. What are Embs views?

(4) Dept agrees large Pol agricultural export commitments in UK-Pol trade agreement may tend retard Sovietization Pol, although Pol acquisition UK capital equipment may tend have opposite effect. Agreement considered advantageous to West at present because it benefits UK and avoids shipment strategic items to Pol.⁶ Dept favors selective trade with East which limits growth Sov war potential and invites Embs suggestions re concrete means fostering such trade development.

(5) Dept also agrees US export controls application Pol shd be flexible. Difficulty is determination proper degree flexibility individual cases. E.g., Dept has consistently urged, with success, coal mining equipment financed Eximbank credit and related machinery be licensed Pol in view importance coal to West Eur, though Nat’l Military Establishment concerned strategic implications such shipments. As Emb aware, US public opinion strongly impressed “deadly parallel” US scrap shipments Japan prior Pearl Harbor. Dept will submit for Embs comment important Pol export license cases to determine soundest decision in overall US interest.

Pouched Belgrade, Bucharest, Budapest, Geneva for Porter, Helsinki, London, Moscow, Paris for Harriman and Caffery, Praha, Sofia, Brussels, The Hague, Copenhagen, Stockholm, Oslo, Rome, Bern.

Acheson

1. Ante, p. 96.
2. Regarding the conclusion of the two agreements of April 1946 referred to here, see Foreign Relations, 1946, vol. vi, pp. 433–436.
3. Julius Katz-Suchy, Permanent Polish Representative to the United Nations.
4. Hilary Mine, Polish Deputy Prime Minister, Chairman of the Economic Committee of the Polish Council of Ministers, and Chairman of the State Economic Planning Committee; member of the Politburo of the Polish United Workers’ Party (the Communist Party of Poland).
5. Jakub Berman, Under Secretary in the Presidium of the Polish Council of Ministers; member of the Politburo of the Polish United Workers’ Party.
6. Telegram 298, May 10, to Warsaw, repeated to the other addressees of the telegram printed here, not printed, advised that this sentence should read as follows: “Agreement considered advantageous to West at present because it benefits UK and avoids shipment strategic items on US Export List 1–A to Poland.” (611.60C31/5–1049)