32. Telegram From the Embassy in Poland to the Department of State 0

1119. Probably for reasons mentioned Embtel 10031 Minister and Vice Minister Trade and more recently Gottesman, journalist said to be close to Rapacki, have been pressing me reopening discussions on new PL480 Agreement.2 I have replied had no information on subject.

Gottesman referred relative lack of impact our assistance to Poland with which we incline to agree while disagreeing his rationalization. According to Gottesman US should have made available in 1957–58 block credit of 300 million–350 million for Poland’s immediate use, either for agricultural products or capital equipment as regime saw fit. This of course was impractical and probably would not have brought us much more recognition in public eye since regime’s will to accord us such public credit has been notably lacking. Especially in past year there has been practically no mention in press of amounts or intrinsic value US assistance.

If US disposed consider further PL480 Agreement point could be made by new administration we are disappointed with apparent unwillingness of Polish Government to accord due public recognition to scope and value of US economic assistance and cooperation. Since no [Page 68] political strings attached our assistance we are not asking for appreciation but merely actual recognition. Allusion might be made to pressing world food shortages, necessity PL480 priorities under expanding food for peace program and possibility that US agricultural resources might be utilized to better advantage elsewhere.

Perhaps not as sticking point but as leverage in negotiations we would like to reiterate proposal to reduce grace repayment period on any new PL480 agreement to 3 or 5 years in order to stimulate Polish planning and interest in agreeing promptly to projects to be financed by local currency as and when Battle Act amended. In this regard we note Poles agreed to 5 year grace period previous agreements, that extention to 10 years granted 1960 was designed ease balance of payments in relation to nationalization claims agreement pending at that time, and that extension did not involve commitment future agreements. Also note that Polish balance of payments position at least with US probably has improved over past months. Poland might well be required during course any negotiations to document their balance of payments position.

We believe Poland and bloc grain position through 1961 harvest probably sufficiently strained that Poland would accept 3 or 5 years. Also believe that 300,000 tons grain probably should be outside limit any PL480 Agreement prior completion 1961 harvest.

  1. Source: Department of State, Central Files, 748.5–MSP/2–761. Confidential; Limit Distribution.
  2. Telegram 1003, January 16, reported a Polish approach concerning U.S. financing of a fertilizer plant. (Ibid., 748.5–MSP/1–1661)
  3. Formally titled the Agricultural Trade Development and Assistance Act, enacted July 10, 1954; for text, see 68 Stat. 454.