give sympathetic attention to any proposals which Polish Govt may
make to us. My reasons do not in any way indicate change of view-
point since my talks with Dept officials last month. I still concur with
Dept that we should not give financial assistance to those govts which
assume unfriendly attitude towards US and which do not live up to
their obligations to US. There is however, a possibility that Polish
Govt may at long last have realized shortsightedness of its anti-
American policy in light of its need for our financial and economic
assistance and may be willing to agree to conditions which should be
essential prerequisite to our making any commitments to Minc. I have
noted from my talks with Modzelewski and Osobka as I did from my
talks with Rzymowski and Lange in New York an evident present soft-
ening of previous attitude of obstruction towards our requests (be-
cause of tremendous bargaining power which is ours due to Polish
critical need for foreign exchange) we should not slam the door in
face of Polish requests for credit. I would recommend that no com-
mitments be made re possibility of extending financial assistance until
we receive satisfaction and by this I mean definitive action on part of
Polish Govt and not mere promises as have been given in the past on
the following points: Access to arrested claimants to American citi-
zenship, adequate compensation to American owners of nationalized
property and conclusion of bilateral aviation agreement. I have not
included Polish promise to hold free and unfettered elections because
of my opinion that in view of thousands of arrests of members of
political parties opposing Communist controlled minority and re-
pressive measures recently taken to prevent Polish Peasant Party from
filing lists of candidates with election committees, elections cannot now
[be] considered to be free regardless of possible absence of intimida-
tion on election day and of possible absence of fraud in counting of
ballots. I am in a later telegram recommending that we make a vigor-
ous protest re irregularities and injustices and while I doubt that such
a protest will be efficacious it may at least serve to alleviate political
situation given Polish need for our financial aid.
  Reasons follow:
  1. Due to Polish admission that no foreign exchange exists with
which to give compensation for American nationalized property and
as compensation in zlotys or in zloty bonds would be unacceptable
ultimate extension of credit which would permit Poland to increase
coal export and thus obtain foreign exchange should be welcome to
American interests whose property nationalized.
  2. Unless we take advantage of leverage which we now have I
seriously doubt whether we will otherwise be able to induce Polish
Govt to adopt more cooperative attitude on treatment of US citizens
and property or on aviation agreement.
3. While I assume Soviet Govt will continue to control Polish econ-



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