611.60H31/149: Telegram

The Minister in Yugoslavia (Lane) to the Secretary of State

174. Department’s 48, November 17, 6 p.m. At meeting this evening after I had stated our position, Yugoslav negotiators offered to furnish us on Monday a memorandum in the following terms:23 [Page 704]

“The Government of Yugoslavia, while regretting that it can not, for practical reasons, accord to the United States the quotas for passenger automobiles and trucks which conform to the United States Government’s views as being representative of the imports from the United States in the past, is pleased to grant assurance that, during the calendar year 1939, import permits providing for payment in free exchange will be granted for passenger automobiles and trucks manufactured in the United States equivalent to 30% each of the value of the total Yugoslav imports of passenger automobiles and trucks, such percentage to be calculated in the following manners:

During the 6 months period January 1 to June 30, 1939 the value of permits to be granted will be 30% of the total Yugoslav imports of passenger automobiles and trucks, calculated separately, during the immediately preceding half year (i. e. July 1 to December 31, 1938). Calculations for the second half year of 1939 will in like manner be based on the total imports of passenger automobiles and trucks in the immediately preceding half year.

The Yugoslav Government will supply to the Legation of the United States at Belgrade at the beginning of each half year of 1939 statements of the total imports of passenger cars and trucks, compiled separately, during the preceding half year, on which the 30% quota for the United States will be based.

The Yugoslav Government will be ready at any time to continue these conversations regarding the application of the import control and to inaugurate conversation relating to the conclusion of a regular commercial agreement.”

I emphasized the Department’s desire that unused portions of quotas for automobiles and trucks be carried over to the next period or periods and reminded the Yugoslav delegation that this had, in principle, been agreed upon as long ago as February [5,] 1938 when Fotic [Fotitch] indicated acceptance of point 1 of Department’s counter proposals of December 15, 1937. The Yugoslav delegation however maintained that such acceptance referred only to an offer of fixed quotas based on American exports to Yugoslavia in 1935 and not to percentage quotas such as those offered, arguing that the national endeavors to maintain the importation of controlled articles at uniform rate and that an accumulation of unused quotas from one period to another might lead to inconvenient fluctuations. I then proposed that the quota periods be increased from 3 months to 6 months each, thus insuring importers more time for adjusting their imports to seasonal demand, and this latter proposal was accepted.

  1. Memorandum dated November 29, containing the unilateral declaration of the Yugoslav Government, was delivered to the American Legation on November 30 (611.60H31/151).