47. Memorandum From Secretary of State Rusk to President Kennedy0

SUBJECT

  • Pending PL 480 Agreement with Poland

Problem

At the NSC Meeting on October 13 you requested that I review assistance programs to Poland and make recommendations to the Council on the basis of a review and restatement of US policy toward that country.1 The only assistance program under consideration at this time is a pending PL 480 agreement.

In view of the limited scope of the assistance problem, the pending status of the agreement after negotiations with the Poles since last June and the need to reach a decision at an early date the Department believes that this matter might well be settled without bringing it before an NSC meeting.

Discussion

Background of PL 480 Negotiations. PL 480 agreements with Poland have been concluded annually between 1957 and 1960 for a total of $365 million. In negotiations this summer most of the details were worked out for an agreement totalling $86.3 million and including the sale of 500,000 tons of wheat, 100,000 tons of barley and lesser amounts of other surplus commodities. These negotiations were suspended and the Polish Ambassador informed on September 1 that, in view of the current international situation, we were not prepared to sign the agreement at that time. We told him that we would review the situation during the following month to see if it would develop in a way which would make conclusion of the agreement possible.

In the following weeks the Poles, while informally indicating that they understood our having to delay signature of the agreement, pointed out the serious difficulty which an extended delay would cause them in seeking to satisfy their grain requirements for the coming year. They have emphasized that, even with increased deliveries from the USSR and about 500,000 tons of grain purchased for hard currencies from Canada, Finland, Switzerland and West Germany, they will have a substantial short-fall. They also point out that, in connection with their economic planning for 1962, the effects of failure to work out a solution to their grain requirements in the near future would be serious, and [Page 98]might include political consequences which could adversely affect the independent status of the Polish farmer as well as US-Polish relations.

Because of the Berlin crisis and domestic discussion of economic relations with the Soviet bloc it was decided to delay action on the PL 480 agreement and to review economic relations with Communist countries. In informing the Poles of the delay in conclusion of the PL 480 agreement, we had in mind the possibility that our action might encourage them to seek to exercise a beneficial influence with Moscow in connection with the Berlin crisis. There is no evidence available to indicate what effect it has actually had. We are satisfied, however, that whatever effect may have been achieved in this direction cannot be sustained by further delay. Also, we have already substantially exceeded the period of delay indicated to the Poles.

Significance of the Polish Situation. The Gomulka regime came to power in 1956 in the face of dramatic pressure by the Polish people for liberalization and an end to the unhappy period through which Poland had passed during the previous decade. While Gomulka was able to restore order and preserve the system of Communist rule, his regime has been characterized by major divergencies from the pattern of the rest of the Soviet bloc which affect not only the situation within Poland but its role in the bloc and in the world.

The measure of independence which Gomulka won in 1956 has been reflected in domestic policies which are unique in three important respects:

(1)
Agricultural land was returned to the peasants. Except for 13% of arable land held in state farms (most of which is in formerly German areas), only 1% of Polish agricultural land is collectivized. The remaining 86% is farmed by private farmers to whom Gomulka has stated that they will never again be forced into collectives.
(2)
An understanding was reached with the Catholic Church under which essential freedom of worship has been permitted, including the teaching of religion to children by the clergy and the operation of a university and seminaries by the church. While there have been stresses in the relationship between the regime and the church, these freedoms continue to exist.
(3)
The area of civil freedom has been expanded. The power of the police has been significantly restrained, resulting in a marked relaxation of the atmosphere of fear and suspicion which characterizes life in the Soviet bloc. Diversity in the arts and intellectual life is permitted to a degree unmatched in the bloc. The Polish theatre, the graphic arts and literature all reflect the existence of an area of self-expression which, while not extending to open criticism of the regime, is not fettered by the requirements of “socialist realism”. Travel within Poland and beyond its borders is freer than in any other Eastern European country.

Since 1956, Poland has also played a special role in the international sphere. Within the Soviet bloc, the very existence of a Communist country [Page 99]in which unorthodox domestic policies are pursued inevitably exerts an influence in other bloc countries which complicates regime efforts at maintaining orthodoxy as well as the general effort to foster homogeneity in the bloc. Beyond the bloc, Poland has developed a pattern of relationships with the West which is unique. This has made possible contact with the West and influence from the West to such an extent as inevitably to affect the situation within Poland.

United States Activities in Poland. The development of bilateral relations with Poland since 1956 has made possible a considerable expansion of US activities there. Officers of the Embassy in Warsaw as well as visiting US officials have been able to maintain broad contact with Polish officials and other citizens as well as to move freely about the country in performance of their functions. Embassy officers are able to represent the interests of American citizens to a degree and through means which are not possible elsewhere in the Soviet bloc. US voluntary agencies are able to administer food distribution programs which include full identification of the source of the distributed goods and delivery directly to the recipient. VOA programs are not jammed in Poland. We have been able to maintain a modest USIA-type program, including circulation of an official US magazine and an International Media Guarantee program, of $1.2 million per year. Finally, we have been able to develop an exchange program involving both the US Government and a number of American foundations and other private sponsors which is considerably larger and less fettered by government controls than any other in the orbit states of Eastern Europe. We have been able to contract for various types of agricultural, medical and vocational rehabilitation research programs, financed out of zloty proceeds from PL 480 sales.

The Role of US Assistance to Poland. The deliveries of foodstuffs have contributed significantly to the total supply of these essential commodities. Deliveries of cotton have had a noticeable impact upon the important Polish textile industry and upon the supply of textiles and clothing in Poland. The Polish people are aware of the nature and importance of US aid which, therefore, serves our purpose of demonstrating our interest in their welfare.

More important, the development of the US activities and programs in Poland described above has gone hand in hand with the program of US economic assistance which began in 1957. There can be little doubt that PL 480 deliveries including the prospects for their continuity have had an important influence on the receptivity of the Polish Government to other US Government activities in Poland.

Since 1957 the US has satisfied a significant portion of Polish grain requirements, having provided a total of almost 4 million tons of wheat and other grains. It is not in our view an exaggeration to state that our [Page 100]deliveries of these commodities have constituted an underpinning for the continuation of Poland’s essentially private agricultural system.

Effect of Further Delay in Concluding PL 480 Agreement. We believe that a further delay in concluding a PL 480 agreement will produce a reaction to the detriment of US programs and thus of our influence in Poland. Our policy toward Poland since 1957 has been delicately adjusted to a complex situation. If it is to be successful in the long run there must be continuity in our actions so that those in the Polish regime who take the risk of advocating more extensive relations with the US will have ground for doing so. There is considerable indication that the Polish leadership includes, besides those individuals who support the policy of active relations with the US and other Western countries, others who oppose these and who urge more orthodox domestic policies and closer ties with the Soviets. The latter would very likely exploit a break in the continuity of the PL 480 program in an effort to restrict the scope of US-Polish relations and to bring about a retrogression in domestic policies, particularly as regards the status of the peasantry.

There are some signs that the delay in concluding a PL 480 agreement has already had effects on our relations with Poland. The Polish Government has, for example, postponed dedication of the American Children’s Hospital in Krakow. We have also learned that the Polish Embassy in Washington has received instructions to begin the liquidation of the Polish commercial mission in the US. The latter action is said to result from the fact that the mission’s presence is not justified by its present workload.

We have been informed by a number of Polish officials in Warsaw and Washington that some solution to the problem of their grain requirements must be found urgently. They have pointed out in this connection that economic planning for 1962 must be completed by the end of November. It is probable that in the absence of an indication of continued grain deliveries under PL 480 that the Polish Government will resort to the reintroduction of certain coercive measures to obtain grain which is being withheld by the peasants. The implications of such action for the continuation of Polish agricultural policy are apparent.

Conclusion

It is in the light of the situation described above that we must now consider whether to continue to withhold the PL 480 agreement or to take some action to conclude an agreement. The decision should, we believe, take into account factors affecting both the international situation and our relations with and policy toward Poland. We do not believe that developments since September with regard to the international situation are such as to justify conclusion at this time of the full agreement negotiated last summer. We do believe, however, that our purposes [Page 101]would best be met by the conclusion as soon as possible of an agreement of approximately half the value of the $86 million agreement negotiated last summer. Signature of this partial agreement could be coupled with a statement that we would be prepared, if conditions permit, to consider other Polish needs under PL 480 at a later time.

Such action, while helping to meet Poland’s urgent need for foodstuffs, would, we believe, satisfy our purposes in avoiding the deterioration of our relations with Poland. It would, at the same time, clearly indicate that we continue to regard the international situation, as it affects our relations, as not in a condition which would justify conclusion of the full agreement originally negotiated.

The most urgent Polish need at present is for grains. This then should constitute the basic component of the partial agreement. The Department of Agriculture, however, for domestic marketing considerations which it feels are highly important, desires to program also the vegetable oils included in the draft agreement previously negotiated. It is satisfied, moreover, that the vegetable oils can be justified as a necessary foodstuff. Although we do not believe inclusion of the vegetable oils is necessary for foreign policy reasons, we concur, for the reasons stated by the Department of Agriculture, that they be included in the partial agreement.

Recommendation

1.
That you authorize conclusion of a PL 480 agreement with Poland as soon as possible in the amount of about $45 million.
2.
That the Polish government be informed that consideration will be given at a later time to additional Polish requirements for PL 480 commodities in the light of the situation as it exists at the time.
Dean Rusk
  1. Source: Kennedy Library, National Security Files, Country Files, Poland. Confidential.
  2. See Document 46.