52. Memorandum From the President’s Deputy Special Assistant for National Security Affairs (Kaysen) to the Assistant Secretary of State for European Affairs (Kohler)0

At the request of Dr. Marian Dobrosielski I had lunch today with him and Dr. Iwaszkiewicz of the Polish Embassy. The subject of the discussion, after a certain amount of preliminary talk, proved to be PL480 cotton for Poland. Dr. Iwaszkiewicz, who is the Commercial Counselor, detailed at some length the hardships that are being imposed on Poland by the withdrawal of our September offer to supply 40,000 tons of cotton. He indicated that they had with difficulty persuaded Warsaw to allocate $2 to $3 million for cash purchases of cotton. He said that the Embassy had discussed the matter with Secretary Freeman and Under Secretary Murphy of the Department of Agriculture and Assistant Secretary Martin of the Department of State. I explained that they were indeed the proper channels for the discussion and that I really could add nothing to what they had already learned. The essence of their position was that even if they could not get the 40,000 tons they had originally counted on they would need at least 20,000 in addition to what they could purchase with cash or otherwise they would be faced with a desperate situation and a short week in the cotton industry.

Part of the introductory discussion concerned Marxism, Keynesianism, economists and planning in Poland and the U.S. A more substantial part of it consisted of a recital by Dr. Iwaszkiewicz of the benefits that PL 480 had already conferred on Poland. These were: to permit a more rapid development of meat production than would otherwise have been possible; to sustain the Polish policy of a relatively free agriculture; and to stimulate the substitution of margarine for butter which, in turn, permitted an increase in butter exports and the development of the domestic margarine and vegetable oil industry. By contrast, Dr. Iwaszkiewicz lamented the lack of credit available for industrial purchases and stated the Polish Government’s desire to expand its machinery purchases in the United States. The absence of suitable credit arrangements, however, drove them to a continued reliance on Western Germany and Britain, even though they would prefer to have the U.S. as a supply.

  1. Source: Department of State, Central Files, 411.4841/2–162. Confidential.