49. Telegram From the Department of State to the Embassy in Poland0

796. Embtel 901.1 Dept has given thorough consideration intent and implications Section 201 Agriculture Act2 as affecting official activities and personnel in context pending PL 480 agreement. In negotiations we have repeatedly stressed importance Polish concession and used arguments [Page 103]including points mentioned Reftel. Issue at impasse upon suspension negotiations August. In numerous conversations since then Poles including Ambassador who authoritative this subject have expressed concern that this issue appeared to prevent agreement but repeated that this matter of principle and that Warsaw inflexible for reasons stated Deptel 770.3 At meeting November 22 Dept insisted Poles ask Warsaw reconsider position with view finding solution. At meeting November 27 Poles said that reply received to effect that 24–1 rate absolutely not negotiable.

Would appreciate Embassy’s elaboration basis doubt that Polish position final.

Re request Reftel that signature agreement be delayed, Dept sees no purpose delay if as stated reftel rate change unavoidable.

Dept understands Embassy concern effect rate change on personal and official expenditures. As pointed out Deptel 770 and Vedeler letter actions under consideration designed deal with problem. Details to follow.4

  1. Source: Department of State, Central Files, 611.4841/11–2461. Confidential; Priority. Drafted by Wortzel; cleared by EE, FN, Blumenthal, AID, and the Department of Agriculture; and approved by Vedeler.
  2. See footnote 3, Document 48.
  3. For text of Section 201 of P.L. 480, see 68 Stat. 457.
  4. Document 48.
  5. In telegram 934 from Warsaw, November 30, the Embassy responded that it believed the Poles would give ground on the exchange rate issue because of the extreme importance of U.S. imports to the Polish economy and urged delay in the signature of the agreement until Ambassador Beam had arrived in Washington to present his views. (Department of State, Central Files, 611.4841/11–3061)