Office of the Historian

253. Memorandum From the Deputy Assistant Secretary of State for Economic Affairs (Kalijarvi) to the Secretary of State1

Washington, June 7, 1957.

SUBJECT

  • Completion of Polish Economic Negotiations

We signed the Polish economic arrangements today at noon and issued a press release (Tab A).2 In a separate statement (Tab B) the Polish chairman made clear the uses to which the Polish Government hopes to put the commodities that come from the United States. He refers to the policy of eliminating compulsory farm deliveries and allowing greater freedom of decision to individual industrial enterprises in Poland.

The signed agreements provide for an Eximbank credit of $30,000,0003 plus a P.L. 480 agreement of $18.9 million. The text of an unsigned supplemental P.L. 480 agreement—$46,100,000—was also published.4 We will not sign this until the pending P.L. 480 bill has been enacted. The press release simply states that it is hoped that the Supplemental Agreement may be signed as soon as possible.

The arrangements with Poland also include an agreement in principle to negotiate a lump-sum settlement of American property claims against Poland and for the unblocking of blocked Polish assets in the United States. The United States is separately announcing—that is, not by agreement with Poland—(1) an amendment to existing Treasury regulations to remove the existing prohibition on sending to Poland U.S. Treasury checks (for payment of Social Security, Veterans benefits, etc.); (2) the willingness of the Commodity Credit Corporation to give short-term credits for shipment of agricultural commodities to [Page 634] Poland; and (3) changes in U.S. export controls to simplify licensing procedures to permit, among other things, the actual exportation to Poland of agricultual commodities financed on a credit basis.5

The Polish delegation, also in a separate statement, referred to the action which Poland has taken in permitting CARE and American Relief for Poland to resume activities in Poland and in reducing or abolishing customs duties for gift parcels sent to Poland from the United States.

Before proceeding with these arrangements, we have consulted extensively with members of Congress. I have talked with Senators Sparkman and Wiley,6 as well as Congressmen Gordon, Bentley, Fulton and Machrowitz.7 All of them felt strongly that we should proceed now in view of the indefinite delay in the House action on the new P.L. 480 bill. We have explained carefully that the text of the supplemental agreement providing for some $46,000,000 in agricultural sales would not be signed at the present time although it would be published. They have approved of this procedure.

  1. Source: Department of State, Central Files, 748.5–MSP/6–757. Official Use Only. Drafted by Leddy.↩
  2. None of the tabs is printed. For their text and that of the agreements referred to, see Department of State Bulletin, June 24, 1957, pp. 1003–1008.↩
  3. On May 29, President Eisenhower signed a Memorandum of Determination as required under Section 401(b) of the Mutual Security Act of 1954, as amended, and thus ICA released the sum of $30 million to the Export-Import Bank from funds appropriated to the President under Section 401(b) of the Act. (Letter from Hollister to Samuel C. Waugh, June 3; Department of State, EE Files: Lot 76 D 232, US/Polish Talks—Basic Preliminary Documents, #2)↩
  4. The signed agreement provided 100,000 metric tons of wheat worth $6,400,000 to Poland and the unsigned supplemental accord called for 400,000 more metric tons of wheat costing $25,600,000. On April 26, Dulles approved an exchange rate of 24 zlotys to the dollar, which Hollister had previously opposed. (Memorandum from Dillon to Dulles, April 26; ibid., US/Polish Talks—Basic Preliminary Documents, #1) Additional documentation on this issue is Ibid.↩
  5. On May 20, Dulles approved recommendations that made a distinction between Poland and the rest of the Soviet bloc in the matter of security trade controls, thus making available to Poland various strategic and non-strategic goods. (Ibid.) At the request of the Department of State, the Council on Foreign Economic Policy also discussed the question of extending most-favored-nation treatment to Poland and informally decided it would be desired. (Minutes of May 27 meeting by Cullen; Ibid.)↩
  6. Senator Alexander Wiley (R.–Wisconsin).↩
  7. Thomas S. Gordon (D.–Ilinois), Alvin M. Bentley (R.–Michigan), James G. Fulton (R.–Pennsylvania), and Thaddeus M. Machrowitz (D.–Michigan). Bentley and Fulton were members of the Special Study Mission to Europe on Policy Toward the Satellite Nations of the House Committee on Foreign Affairs. The findings of the Mission were published in House Report No. 531, June 4, 1957. Only Bentley visited Poland, April 25–28.↩