S/S–NSC Files: Lot 53 D 351: NSC 18 Series

Memorandum by the Deputy Under Secretary of State ( Rusk ) to the Executive Secretary of the National Security Council ( Lay )1

top secret

Subject: First Progress Report on the Implementation of NSC 18/4, “United States Policy Toward the Conflict Between the USSR and Yugoslavia.”2

In accordance with the approved procedures of the National Security Council there is given below an initial report of progress following the assignment of action on NSC 18/4, “United States Policy Toward the Conflict Between the USSR and Yugoslavia.” With the initiation of periodic reports on this document, similar reports on its predecessor, NSC 18/2,3 are being discontinued.

The policy of limited economic support of Yugoslavia with such added help as is necessary to enable the Yugoslavs to maintain their resistance to Soviet pressures has been carried on, beyond the assistance already given before the adoption of NSC 18/4, by (1) U.S. support of a contemplated multi-project $25 million equipment loan from the International Bank; (2) diplomatic efforts to hasten the important British-Yugoslav trade and credit agreement, signed on December 26, 1949; (3) attempts, so far unsuccessful, to persuade the Belgian Government to postpone certain payments becoming due from Yugoslavia; (4) efforts to increase Yugoslavia’s dollar earnings by ECA off-shore procurement in Yugoslavia. In order to meet the pressing Yugoslav need for emergency credits to cover the dollar gap in its balance of payments, the Department of State is seeking means whereby some $20 million in credits may be made available to assure the requisite Yugoslav imports of hard currency raw materials in 1950. Possible sources are raw material credits from the Export-Import Bank, a Yugoslav drawing from the International Monetary Fund, and ECA off-shore procurement.

NSC 18/4 envisages the possibility of the shipment of arms to Yugoslavia in certain contingencies. The Yugoslav Government has begun to purchase some military supplies abroad but has not yet made a specific request of the United States for assistance in this field. Further implementation of U.S. policy in this respect will depend in large measure on specific Yugoslav requests, on estimates of the Yugoslav military position now being made, and on discussions now in progress with other Western nations.

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A working group composed of representatives of the State and Defense Departments is currently estimating, as a matter of priority, Yugoslav requirements for military supplies. The Joint Intelligence Committee has been requested through CIA to furnish an estimate of the situation covering the following points:

1.
Forces now in being in Yugoslavia in terms of major combat units and strengths.
2.
Forces which can be mobilized by D plus 6 in terms of major combat units and strengths.
3.
Strength and composition of police forces.
4.
Types by broad categories such as small arms, aircraft and ship types, and sources of equipment now on hand.
5.
Estimate of Russian and satellite capabilities.

After completion of the above study the working group will prepare a study estimating Yugoslav needs and making recommendations on the extent and manner by which U.S. supplies might be made available at the appropriate time.

A study is being initiated under the auspices of the Foreign Military Assistance Correlation Committee (in consultation with the Bureau of the Budget) of means to provide military assistance to Yugoslavia on an emergency basis, since such assistance is not provided for in existing legislation.

The Department of State has initiated discussions with other interested governments on the subject of possible military assistance to Yugoslavia and on other points covered in NSC 18/4. On December 20, 1949, the British Government was informed of the main conclusions of that document. The Canadian and French Governments were subsequently informed.4 As the discussions with these Governments go forward, there should be further clarification of the possibilities of coordinating Western policies in dealing with the Yugoslav situation.

In the field of propaganda and public information, the policies outlined in NSC 18/4, in so far as they are at present applicable, are being supported by the Voice of America and related activities under a directive prepared by the Department of State.

Some of the conclusions of NSC 18/4 are based on future contingencies which have not yet come to pass and accordingly are not discussed in this progress report.

Dean Rusk
  1. James S. Lay, Jr. succeeded Sidney W. Souers as Executive Secretary of the National Security Council on January 16, 1950.
  2. Dated November 17, 1949, p. 1341.
  3. For information regarding the document under reference here, see the editorial note, Foreign Relations, 1949, vol. v, p. 868.
  4. Regarding the steps taken to inform the French Government of the points covered in NSC 18/4, see telegram 179, January 13, to Paris, p. 1353.