868.00/7–754: Telegram
No. 697
The Ambassador in Yugoslavia (Riddleberger) to the
Department of State
15. 1. Vukmanovic-Tempo asked me to call July 5 at which time he reviewed with great frankness Yugoslav B/P position and plans of Yugoslav Government for action on its part. Although Tempo laid great emphasis on plans for increasing agricultural production, he covered largely the same subject reported in Embdes 864,1 on which we commented in Embdes 5.2
2. New element injected is question of time. Tempo said Yugoslav Government did not have money to meet United Kingdom credit of 1,000,000 pounds now due but extended for short period. Furthermore, as debts matured increasingly urgent to take decisions about debt conference. Logically, would be preferable to hold debt conference after bilateral talks with United States as aid possibilities, particularly if United States could promise wheat over several years, would materially affect what Yugoslav Government could propose for settlement. Immediate problem was whether Yugoslav Government should only discuss medium term credits or whole B/P situation at debt conference. If Yugoslav Government could get specific information from United States then could plan for conference. In any case, Yugoslav Government would be grateful for opportunity to discuss its present position bilaterally with United States.
3. I said Yugoslav Government requests had been transmitted to Washington but I was not yet in position to give reply. I pointed out difficulty for us at this time before aid legislation had been enacted. This led into general discussion of Yugoslav Government difficulties and possible remedies on which he was careful to make no commitments. At close of discussion I assured Tempo that we were giving Yugoslav Government problems thorough study and thanked him for his assurances on agricultural policy.
4. Preliminary quadripartite talks on debt conference about to start provided British Tridel agrees not to raise issue of mid-term debt maturities pending completion Washington–London consideration of problem. Department already informed Embassy/FOA position this matter.
[Page 1396]5. Agenda for debt conference and content preliminary four-power talks will certainly be influenced by United States action on Tempo proposals reported Embdes 864. Yet we cannot give indication to British and French of these proposals pending determination of our answer. This consideration plus Yugoslav need for relief and factors cited Embdes 5 make early United States answer to Tempo highly desirable.
6. Even if precise United States position in requested talks cannot yet be determined because need for legislative action, could we advise Yugoslav Government that United States agrees to talks as soon as legislative hurdle cleared. Newspaper reports indicate agricultural surplus legislation now enacted. This might permit immediate consideration this element of Tempo proposals. Our earlier assurances to Yugoslav Government indicate possible desirability this step.
7. We repeat our awareness interlocking complexity this problem but I would appreciate indication Department’s/FOA reaction to Yugoslav Government proposals to guide us here even if complete position not yet feasible.