868.10/10–1250: Telegram
The Secretary of State to the Embassy in Yugoslavia
261. Dept Has been much concerned with Yugo efforts, particularly those of Popovic, to obtain from US and other western sources excessive loans for unrealistic industrialization program; and a continuation of present Yugo economic plans may result in recurrent crises and requests for US aid similar to that now facing us, and which it may not always be possible to meet. These excessive requests also have effect of delaying consideration of a realistic loan program. We are now faced not only with the question of economic development and balance of payment credits but also with the acute food and raw material shortage resulting from drought. The latter we are making best efforts to deal with on emergency basis. Feel however that Yugo position presented to us by Popovic is lacking in realism in light of above factors.
Aim of our 240 Oct 91 was to clarify situation at top level and try to get Yugos to face up to what we perceive to be facts of life. We feel a frank statement on our part now, mentioning general question of loans as well as food aid, shld strengthen rather than weaken realists in Yugo. We are confident that in addition to Secretary’s statement to press today, sent you in separate cable,2 you will be able to present these views so as to minimize possibility of adverse repercussions which you foresee in your 348 Oct 113 and hence would prefer you present our views generally along lines set forth in our reftel.
However if you still feel strongly presentation shld be made in two separate conversations our concurrence is given on clear understanding that second interview with Tito can follow within few days and that Dept’s principal purpose of acquainting Tito personally with full picture [Page 1469] US views on overall Yugo economic situation can be promptly achieved.
We think your point re US mtg totality of Yugo credit request is well taken and you shld accordingly direct your remarks so as to make clear that US Govt itself cld not support nor participate in credits to Yugo to meet any such loan program as that proposed.
- Ante, p. 1460.↩
- Telegram 256, October 11, to Belgrade, not printed, gave a summary of remarks made by Secretary of State Acheson on the question of food relief for Yugoslavia during his press and radio news conference of October 11 (868.03/10–1150). Asked by a correspondent if the United States was going to send food to Yugoslavia, the Secretary responded that it would undoubtedly be necessary to send food and quite soon. He explained that the matter was being discussed with the Yugoslav Government and within the United States Government but that no decisions had been reached.↩
- In his telegram 348, October 11, from Belgrade, not printed, Ambassador Allen strongly recommended that his proposed talk with Marshal Tito be confined for the time being to the question of a grant of food and that any statement of position concerning further general economic assistance be reserved for at least several days. Allen expressed the view that the linking of the two matters in the same conversation along the lines suggested by the Department of State would undoubtedly be interpreted as evidence that the United States was using the desperate food situation as a lever to force major cutbacks in the Yugoslav industrialization program. Allen feared that the backfire might cancel the effect of the offer of food relief, cause reasonable elements in the Yugoslav regime to lose influence, and generally jeopardize American policy toward Yugoslavia (868.03/10–1150).↩