Foreign Relations of the United States, 1958–1960, Eastern Europe; Finland; Greece; Turkey, Volume X, Part 2

65. Memorandum of Conversation⁰

Washington, February 16, 1959.

SUBJECT

• Polish Economic Negotiations

PARTICIPANTS

• The Polish Ambassador
• Dr. Tadeusz Lychowski, Polish Economic Minister
• Dr. Czeslaw Bobrowski, Vice Chairman of the Economic Council, Council of Ministers
• Robert D. Murphy, Deputy Under Secretary
• Foy D. Kohler, Deputy Assistant Secretary, EUR

At the invitation of the Polish Ambassador Mr. Murphy and I had lunch with him and the others named above at the Polish Embassy. For the most part the conversation was friendly in tone and general in content.

Following the luncheon Dr. Bobrowski raised with Mr. Murphy the question of the long delay in resumption of economic negotiations. He said that when the pending negotiations had first been postponed last fall following American representations with respect to some public statements made by the Party Secretary Gomulka, this had been entirely understandable to pro-Western elements in Poland. They had said to themselves and between themselves that “our American friends” will know how to time a resumption of the relationship and they expected this to take place after a few weeks or at most a couple of months. However, as month after month has gone by, the pro-Western elements have started to become discouraged. Theories had started developing around Warsaw to the effect that the Americans had had the illusion that they could with their aid in fact overcome the facts of geography and bring about a real change in Polish foreign policy toward an anti-Soviet line. According to this theory the Americans had decided after Gomulka’s speech last fall that they could not achieve such a reorientation and decided to drop the whole business as a result. The pro-American elements in Poland had difficulty in combatting this. Now they were concerned that an even more dangerous idea was making its rounds in Party circles in Warsaw. This theory held that Americans were continuing to withhold economic aid negotiations in an effort to bring pressure to bear on the Poles before and at the upcoming Party Congress scheduled to begin March 10.

The Ambassador and Mr. Lychowski chimed into this presentation from time to time in a confirmatory way. Mr. Lychowski said that to him personally a very frustrating element had been his inability to get any firm information here in Washington. It has been intimated to him a number of times that he could expect negotiations to resume in the near future but the near future seemed never to arrive. In this connection, Mr. Lychowski emphasized the importance to the Poles of “most favored nation” treatment if they were to be able to begin to develop their trading ties with the United States and eventually to begin paying off their debts. He had understood 14 months ago that this was approved in principle and that official action was only to be a question of timing.¹

Dr. Lychowski and the others talked at some length also about the very real benefits to Polish economic posture and to the operation of Polish economy of the American aid. Even though this was small in relation to the over-all economy, it gave the management of enterprises a possibility of looking elsewhere than to the Soviet Union for their technology. This in turn created relationships which were of great value in keeping an important element in Poland aware of and, to the extent possible, tied to the West. In this connection all the Poles at the luncheon emphasized the importance of continuity; this they agreed was even more important than the actual size of the aid in any given year.

During a discussion of the agricultural situation in Poland Mr. Murphy and Mr. Kohler inquired about the question of compulsory deliveries of agricultural produce. Dr. Bobrowski said that the Polish Government had made great progress in cutting back on compulsory deliveries, to the point where this was no longer a major factor in the agricultural picture. He said that the compulsory deliveries requirement applied only to a few crops (I believe he said three) and even with respect to these had been reduced to about 20% of production. Even this 20%, he claimed, was on what might almost be said to be a voluntary basis. A simple system had been worked out whereby any agricultural producer not desiring to deliver in kind could simply have the difference between the State price and open market price of his quota of produce added to his tax bill. He said a number of peasant farmers were in fact following this practice.²

0. Source: Department of State, Central Files, 748.5–MSP/2–1659. Official Use Only. Drafted and initialed by Kohler.
1. On February 13, Spasowski had stated his concern about the delay in the economic negotiations to Edward L. Freers, Director of the Office of Eastern European Affairs. (Memorandum of conversation by Freers, February 13; Ibid., 411.4841/2–1359)
2. On February 17, Lychowski arranged a gathering to provide a small group of U.S. economists an opportunity to meet Bobrowski. A summary of his remarks, in which he argued that CEMA had no practical effect on coordination of economic activities between Soviet bloc countries and that Poland’s pragmatic approach to economic decentralization was more practical than Yugoslavia’s heavy reliance on price regulations to guide its economic development, is in a memorandum of conversation, February 19. (Ibid., 848.00/2–1959)