660H.1115/11: Telegram

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

23. Your 143, May 21 noon, has been discussed with the Export-Import Bank and with the Department of Agriculture. The Bank feels that it might be difficult for Yugoslavia to meet within terms appropriate for the sale of cotton a credit for cotton equivalent to the 300,000,000 dinars mentioned by the Minister of Finance.

The Bank recommends that you be advised that the Export-Import Bank will be glad to consider opening a 6 months’ cotton credit, with an option of one renewal of 3 months, in the sum of $400,000 against the dollar obligation of the Banque Nationale du Royaume de Yougoslavie, together with assurances from the appropriate authorities that dollar exchange will be available to meet all maturities.

If this initial venture should prove satisfactory, the amount might be increased and perhaps the credit placed on a revolving basis.

The Department concurs in the foregoing.

For your information, the Johnson Act does not apply to transactions of this type carried out by the Export-Import Bank.