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January 14, 1946 AND Dear Mr. President: Here is a summary of two months' observations in Poland: Economic recovery is progressing, but is held back by lack of transport, loss of livestock and shortage of construction equipment and raw and semi-finished materials for factories. Offsetting this are the good spirit of the population, hard work by the government (effective leadership but spotty execution) and a remarkably constructive attitude by labor unions, Recovery on the whole is far better than one would expect, considering the obstacles, except that the rehousing organization is below par. Relations with Russia. Basically, the Polish government is under Russian domina- tion, due to the position and relative size of the two countries and Russia's determina- tion not to have an unfriendly neighboring regime. No Polish government, conservative or radical, will do anything Russia dislikes. There is no indication of actual super- visory control, directly or through Polish Communists. Poles fear and dislike the Rus- sians. All intelligent Poles recognize the need for good relations with Russia, except the followers of the London emigres, who are banking on a .S.-Russian war. Soviet policy toward Poland has been hard in spots--as in the transfer of German-built factories to Russia--but helpful in bigger matters. A gift of several thousand Russian army trucks first revived transportation in Poland. Russian raw materials enabled the textile in- dustry and part of the heavy industries to get going. Russia reopened the Polish sea- ports and airports. The Red Army. Presence of Russian troops in Poland is disliked by everybody--by most people out of old national animosities, by some from fear of its permanence, by many because of the bad conduct of Russian soldiers, by the Communists because they get blamed for it. Russian garrisons were sharply reduced in size while I was there, es- pecially in southern Poland where the big homeward migration of soldiers and slave labor had made them large. Polish alarm over the Russian army is diminishing, but the dis- like continues. Russian discipline was greatly improved by the appointment in October of special Red Army commanders in each voivodship--ar action completely misrepresented in the United States. The Russians control numerous lines of communication in Poland, for military purposes, and do joint patrolling of city streets at night with the Polish militia. An American traveling through the country or staying in cities will notice nothing to suggest control by the Russians of anything except their own military instal- lations and troops and transports. Communism. The Communist party is strong in brains and energy, weak in numbers and low in prestige. It has the broadest national outlook of any of the six parties--a fact which causes it to clash with doctrinaire Marxists in the larger Socialist party. The strength of the Communist ministers, who are by far the ablest men in the government, weakens the government politically by linking it with Russia in the people's minds. Polish Communists, though pro-Soviet, are Poles first. If they could, they would defy Russia by seizing Teschen. Poles in general, though devoted to a native socialism, are far too anti-Communist ever to be ruled by a Communist dictatorship unless it is instal- led and sustained by Russia. But as long as Communists are prominent in the government they are an insurance against Russian intervention. This is an argument, I think, for letting the Poles fashion the 1946 election so that it will avoid either the fact or the appearance of anti-Russianism. Nationalization of large industry. This had extensive roots in prewar Poland. A vast majority of its supporters are non-Communists and many are intense individualists in other matters. One important effect of knocking out big industrial capitalism and landlordism is to eliminate the powerful core of anti-sovietism found, for example, in Hungary. This encourages a hands-off policy by Russia toward Poland's economic life, quite different from Russia's Hungarian attitude. Credits to Poland. Poland's one great mineral resource, coal, permits an extensive industrial development based on imported raw materials and semi-manufactured products. Poland needs and seeks foreign trade in all directions, but especially with Russia and the United States. Trade is heaviest now with Russia and Sweden, but thoughts are most- ly on the United States. There is a curious paradox in Polish thinking. Sentiment