860C.51/1–2246: Telegram
The Acting Secretary of State to the Secretary of State, at London
us urgent
697. For the Secretary. Urtel 692, Jan 19. Next following telegram repeats Dept’s instructions to Ambassador Lane on Polish nationalization.21 Lane has replied stating that he has presented note as requested.
Statements of Polish officials to you in London together with remarks of Zoltowski to Dept officials here and AP report purporting to quote Ambassador Lane’s representations to Polish Govt as well as press reports quoting officials of Polish Embassy here make it clear that Poles are deliberately misinterpreting remarks made by Lane to Polish Foreign Minister. Lane reports that he did not protest nationalization law but specifically took position that nationalization was a domestic matter for Poles to decide for themselves. He informed Dept that he had objected to refusal of Poles to permit entry of American citizens to inspect American owned property as provided by terms of 1931 treaty. During the interview Rzymowski remarked that the 1931 treaty does not conform to conditions in 1945, and this in spite of fact that we have received repeated assurances that Polish Govt considers itself bound by terms of that treaty. Lane thereupon reminded Rzymowski that as long as treaty is in effect it is expected that Poland will abide by its provisions. He also reports that he informed PolGov that in view of this refusal he could no longer recommend that Dept approve credits.
[Page 383]The National Advisory Council is considering maximum Export-Import Bank credit of about $40,000,000. In addition Federal Liquidation Commission has been authorized to sell surplus on usual terms up to $50,000,000. Poles have made formal application to Export-Import Bank for credit to purchase 500 locomotives and 20,000 gondola cars which would cost approximately 90 to 100 million dollars. Poles have not yet been informed of proposed limitations on amount of credit. Negotiations have not been interrupted. Poles have been presented with memorandum covering substance of a proposed exchange of notes to take place concurrently with any commitment for Export-Import Bank credit when and if made whereby PolGov will (1) reaffirm principles of Art VII of master lend-lease agreement, (2) affirm accord of PolGov with general tenor of Proposals for Expansion of World Trade and Employment, and agree pending World Trade Conference to abstain from adopting any measures in conflict with principles of proposals, (3) reaffirm most favored nation treatment under treaty of June 15, 1931, (4) reaffirm explicitly Potsdam Election Commitment,22 (5) agree to show due respect for rights of American citizens in Poland and make adequate and effective compensation for American properties nationalized and (6) afford adequate opportunity for consultation on above matters and make available full information on Polish international economic relations.
Poles here have indicated difficulty about second and fourth of above points. Their difficulty on second point centers around necessity for maintaining restrictions during period of transition, which of course Dept fully recognizes and which has been made clear to Poles. They also question possibility of committing themselves in advance of final agreement to world trade proposals. While Dept recognizes that they cannot make concrete commitments on this point at this time, it is felt that we should obtain assurances from them that they will give general support to our proposals at World Trade Conference. Their objection to fourth point is on basis that political considerations should not be injected into economic negotiations. However, in view of the responsibilities we undertook at Yalta and Potsdam we feel that we should not grant a large credit to Poland without obtaining further assurances on this point, particularly in view of clear indications that Polish Govt may try to evade its obligations.
Dept has not made final determination of policy on whether if it comes to a showdown Dept should insist on attaching above conditions to granting of limited Export-Import Bank credit. This involves [Page 384] carefully weighing the responsibilities which we undertook under the Yalta and Potsdam Agreements.
Recommendations on proposed zloty exchange rate will follow.
Repeated to Warsaw.23