Office of the Historian

102. Memorandum of Conversation0

Washington, April 26, 1960.

SUBJECT

  • Polish Negotiations

PARTICIPANTS

  • Dr. Tadeusz Lychowski, Economic Minister, Embassy of Poland
  • Mr. Edwin M. Martin, Deputy Assistant Secretary for Economic Affairs, Department of State

Dr. Lychowski asked to see me alone after some preliminary discussion of arrangements for the forthcoming US-Polish negotiations.

He said he wanted to talk to me on a completely off-the-record and confidential basis. He understood fully the difficulty which we had in concluding arrangements for economic assistance to Poland prior to signing of a claims settlement agreement. On the other hand his Government in Warsaw was very concerned about their bad balance of payments situation and would be most reluctant to commit themselves to payments under a claims agreement without knowing whether or not they would receive aid on a basis which would justify the claims arrangements. [Page 282] In order to get around this dilemma of which should come first, he though it would be most helpful if, as early in our negotiations as possible, I could give him the broadest kind of an idea of what we would be prepared to do with respect to the aid questions. If he could have this kind of suggestion from me on a personal basis which he could transmit to Warsaw, he thought there was then a chance that he could persuade Warsaw to agree to sign the claims agreement first.

I said that I understood there was a problem of priority here which was difficult and which must be handled if the negotiations were to be successful. I did not know what I might be able to tell him about the prospects with respect to aid or when, but, if I could be of assistance along the lines he suggested, I would certainly try to give him as soon as possible some idea of what they might expect from us.

He then said he wished to mention one point of substance to which he would refer in his opening statement at the negotiations tomorrow1 but probably not in such a way as to make clear how vital it was to them. This was the issue of dollar repayment under the PL 480 agreement.2 He said the real problem here was that Mr. Gomulka was absolutely wedded to the idea of meeting on time all Polish obligations. They had had a clean record since 1945 and Gomulka was insistent that it be kept that way. It was, therefore, impossible to persuade him to enter into agreements to make payments in cases where he thought there was some doubt about their future ability to carry out the agreement. There is also the question of Poland being the only country in which there is such a requirement under PL 480.

I said that I did not know what we could do in this respect, but I appreciated knowing from him that from their standpoint this was a vital issue.

  1. Source: Department of State, Central Files, 611.4841/4–2660. Official Use Only. Drafted by Martin.↩
  2. See Document 103.↩
  3. For text of Article III 2(d) of the U.S.-Polish Surplus Agricultural Commodities Agreement of June 10, 1959, see 10 UST 1058.↩