740.0011 European War 1939/9078: Telegram

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

192. My 191.52 Prime Minister claims to be ignorant of orders to convert $22,000,000 gold to dollar account. Am asking Minister of Finance for explanation tomorrow; reported not in Belgrade today. Cvetkovic said that $3,000,000 transferred to Switzerland and Turkey were to pay for cotton bought in Russia and Turkey. I recommend that Treasury defer decision until receipt of report of Sutej’s explanation.

Cvetkovic was emphatic that no German troops or war material will be allowed in Yugoslavia. He said he explained to Hitler (1) Yugoslavia will not permit passage of troops, (2) Yugoslavia Army will resist attack, and (3) Yugoslavia has vital interests in Salonika. When I asked if point 3 meant Yugoslavia would attack in event Salonika occupied by Germany he replied in negative. Prince Paul also indicated Yugoslavia would not consider occupation of Salonika a casus belli.

Cvetkovic said that great military difficulty is that if Yugoslavia is threatened with attack, troops in Slovenia and Croatia must be brought south leaving northwest part of country undefended.

In reply to Department’s request for my opinion I believe Government and Army will resist any attempt at occupation of country, but that Yugoslavia will not take offensive. Yugoslavia may feel obliged to sign pact with Germany without military clauses, but it is impossible to prophesy final attitude which will depend on nature and extent of German demands.

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