811.503160H/1–3047: Telegram

The Chargé in Yugoslavia (Hickok) to the Secretary of State


84. Reference Department’s telegram 20, January 91 and Embassy’s telegram 38, January 13.2 After repeated delays and postponements Embassy succeeded obtaining informal interview Foreign Office this morning. Foreign Office states memo forwarded to Economic Ministries, no answer received, and matter entirely out of Foreign Office’s competency. Foreign Office spokesman explained nationalization law3 completely altered situation. Succeeding regulations which government will issue will determine points raised in Embassy memo. Prior to issuance these supplementary regulations spokesman felt no progress could be made in property negotiations. No information as to date issuance regulations but spokesman did not believe they would appear “in immediate future”. Understand British have been informally told no regulations for past 3 or 4 months. Refusals to discuss nationalization before supplementary regulations issued encountered by other missions here. Current practice Economic Ministries refers Embassies to Foreign Office for all information thus completing circle.

Yugoslav Government appears to be attempting to use settlement of nationalized property issue as bargaining lever for trade and loan concessions. If Yugoslav Government has any reason to feel its blocked balances in US4 may be released in near future it can be expected to postpone negotiations until after that event. Embassy appreciates difficulties in retaining balances indefinitely but emphasizes they represent only element in current situation which may persuade Yugoslav Government to effect acceptable settlement. Full report recent nationalization developments follows.

  1. Not printed; it instructed the Embassy to discuss urgently with the Yugoslav Foreign Ministry the desire of the United States to negotiate a settlement of pending questions involving American property interests in Yugoslavia. (811.503160H/1–947)
  2. Not printed; it reported that the substance of the Department’s instructions had been taken up with the Yugoslav Foreign Ministry on January 13 (811.503160H/1–1347).
  3. December 5, 1946.
  4. Yugoslav assets in the United States had been blocked by the Treasury Department in 1941 in common with the assets of other German-occupied countries. Yugoslav private assets on deposit in various financial institutions in the United States amounted to an estimated $13 million in 1941. Accretions and depletions allowed by law may substantially have altered this figure by 1947. Yugoslav Government assets, which were on deposit in the Federal Reserve Bank in New York and had been subject to withdrawals by the Yugoslav Government in Exile in 1942–1944 and by the Yugoslav Provisional Government in 1945, amounted to approximately $47 million ($46.8 million in gold).