660h.116/21
The Minister in Yugoslavia (Wilson) to the Secretary of State
[Received October 6.]
Sir: Referring to the Legation’s Despatch No. 581 of September 12th, I have the honor to report that I today called on the Minister of Commerce at his request. My impression is that, after his recent conversation with Mr. Fotitch, Yugoslav Minister at Washington, in which the latter reported the bad impression made in Washington by the Yugoslav import restrictions, hinting at possible retaliation, the Minister wished to try to explain to me the Yugoslav point of view, and assure me that there was no intentional discrimination against American goods. The Minister accordingly merely went over the same old ground again explaining the motives which had forced Yugoslavia to adopt the system of restricting imports with countries with which Yugoslavia had passive trade balances, which has been reported to the Department in previous correspondence. He added that in 1935 the trade between the United States and Yugoslavia had nearly balanced, but that the first six months of 1936 had shown a very active balance in favor of the United States. This may have been due to the fact that importers of American goods, foreseeing the application of restrictions, had laid in large stocks during this period, and may be corrected by the trade of the second six months. When the Minister denied that there had been any intentional discrimination against American goods, I remarked that nevertheless importers of American goods have been unfavorably affected by the recent import regulations, and that certain other countries, especially Germany, have profited by them to the detriment of the United States. The Minister acknowledged that this fact was true but a regrettable necessity from the Yugoslav point of view.
The Minister said that he had heard indirectly, although no case had come to his notice, that certain importers of American goods were trying to form associations to export Yugoslav goods to the United States and thus secure a trade balance between the two countries which would automatically do away with import restrictions. (Legation’s Despatch No. 581 of September 12, 1936). I told him that I had heard the same reports but that I knew nothing personally of any such movement.
The Minister said that he intended to have further conversations with Mr. Fotitch before the latter’s departure for Washington, and also proposed to have a conference at which would be present not only Mr. Fotitch, but experts from his Ministry and Mr. Pilja, Assistant Minister for Foreign Affairs charged especially with commercial matters [Page 822] (now in Italy negotiating an Italian-Yugoslav provisional commercial agreement), at which questions would be discussed concerning commercial relations between Yugoslavia and the United States as affected by the present import restrictions. In closing, the Minister said that if this conference should be able to arrive at any definite results he would again ask me to come to see him.
Mr. Fotitch expects to be in Washington about the middle of October and the Department may be interested to learn from him directly the result of his conversations with Yugoslav officials which he has had during his stay in Belgrade on this and other subjects connected with American-Yugoslav relations.
Respectfully yours,