The Ambassador in the Soviet Union (Steinhardt) to the Secretary of State
[Received 11:53 p.m.]
412. The Soviet press has thus far published no reference to the probable arrival in Moscow of a Yugoslavia mission to conclude a commercial agreement as reported by Minister Lane in his telegram to the Department, No. 120 of April 17th, 7 p.m.99 On the other hand yesterday’s issue of Trud?1 which appeared today, carries an article which is most unfriendly toward the Belgrade Government in discussing the effects of the war on Yugoslavia. As Trud has recently been found to reflect with particular accuracy the views of the Commissar for Foreign Affairs the article may be of some significance.
Trud portrays Yugoslavia’s economic position as precarious due to lack of raw materials notably fuel oil. Increased unemployment [Page 463] and the rise in the cost of living are said to have led to serious strikes and riots among “the starving peasantry”. Trade union leaders are accused of betraying the workers and the authorities are charged with repressing by force all those who attempt to improve the lot of the masses. The article continues that the misery of the workers has been further aggravated by nationalistic oppression. “The Government,” the writer declares, “has shown itself incompetent to reach any satisfactory solution whatsoever of this problem and has therefore embarked upon a policy of forcibly destroying the nationalist movement by the dismemberment of revolutionary organizations and by the most extreme pressure upon the workers.” The law of December 17 for the protection of the Government is characterized as “providing for the erection of concentration camps for the progressive workers, the peasants and the intelligentsia who are fighting for peace and freedom.” The article concludes: “repressions however are powerless to stamp out the growing revolutionary movement of the Yugoslav peoples. The working masses of Yugoslavia are showing ever increasing interest in the Soviet Union and its glorious policy of peace.”
In view of the persistence previously exhibited by the Kremlin (particularly in the case Germany and Japan) in demanding a political understanding as a condition precedent to economic cooperation, it is not improbable that any commercial agreement finally reached with the Yugoslav Government will include at least a political understanding. In such event the article above quoted may foreshadow an attempt on the part of the Soviet Union to penetrate into the internal political structure of Yugoslavia by resorting to its customary tactics of making use of left wing labor organizations and existing Russophile societies. The article may be construed as challenging Italian influence in the Balkans and as another sharp warning not only to Yugoslavia, but particularly to Rumania and the other Balkan States not to place too great reliance on the ability of small countries to remain neutral in the present conflict.