Foreign Relations of the United States, 1947, Eastern Europe; The Soviet Union, Volume IV

124.60H3/5–1547: Telegram

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

top secret

Belgrade, May 15, 1947—8 p. m.

511. Recent incidents in which Embassy’s immunities disregarded (Embassy’s telegrams 455, May 4 [6]; 474, May 10¹) and increasing evidence that Yugoslavs intend to vent their bitterness against American policies on Embassy (Embassy’s telegrams 491, May 12; 499, May 14; 503, May 15; Embassy’s despatch 806, April 21²) require further examination of Embassy’s position which is becoming increasingly untenable. By systematically terrorizing Yugoslav employees and domestic servants, refusing housing permits and in half dozen other ways Embassy could be put out of business altogether. Embassy should not ask Yugoslav employees day in and day out to face possible defamation, torture and death simply because they are employed by us. It is to be noted that Yugoslavs recognize no legal impediment to going after non-commissioned American employees. Moreover through pressure on Yugoslav employees Embassy is known to have become infested with spies and I am gravely concerned about security arrangements (Embassy’s telegram 232 [231], March 8³).

Since Yugoslavs refuse to accept usual precepts of international comity re Embassy privileges or our legal arguments re Embassy immunities apparently only way left open to secure normal privileges and immunities is coercion. I believe most effective means of coercion would be warning that if situation is not promptly redressed we will block all private remittances to Yugloslavs except under special licenses. Recent figures not available to Embassy but pre-war figures indicate Yugoslav balances on immigrant remittances alone amounted to from $4 to $14 million a year. Department doubtless can secure post-war figures. In addition Embassy is passing out approximately $200,000 in veterans benefits per year, Consulate Zagreb is believed to be handling even larger sum and Yugoslav Government is seeking dollar exchange through enforced settlement of estates and bank balances in US (Embassy telegram 504, May 15⁴).

This exchange in hard currency will be desperately needed by Yugoslavs to help finance their 5-year plan and there is no direct means known by Embassy by which they might retaliate if we blocked remittances. Pressure on Yugoslavs of such a move would be continuous and cumulative. Principal objection would of course be hardships imposed on private recipients and consequent howl from senders in US. This might be counteracted by pointing out (a) that due to laws requiring transfer all foreign currency and credits to Government and artificial exchange rate Yugoslav Government is actually collecting over three-fourths of value of money transmitted; (b) that parcels of food and clothing can be transmitted which in general are likely to benefit recipients more than actual cash.

I, therefore, strongly recommend to Department that we inform Yugoslavs either in Washington or here that unless normal Embassy privileges and immunities are respected and past breaches of them corrected insofar as this can still be done, we will block private remittances. Especially I suggest that we might require some or all of following: (a) Release of Wedge and of two translators unless acceptable evidence of Nazi collaboration is produced against them; (b) an undertaking that staff of Embassy will hereafter be respected with the understanding that Americans who may be shown to have been engaged in improper activities shall be withdrawn and Yugoslavs so engaged shall be discharged (I regret to say that there is substantial evidence that in past both Americans and Yugoslavs attached to Embassy staff have been engaged in improper activities and to this extent the Yugoslav position is justified, Embassy despatch 498, September 13, 1946; 592, January 13, 1947; 827, April 28, 1947⁵; nevertheless since my arrival here I have insisted that our Yugoslav employees not engage in such activities and there is no evidence that they have done so. This has made no perceptible difference in Yugoslav attitude toward Embassy). (c) Passes be furnished for all American employees of Embassy to travel freely as stipulated in Convention of 1881; (d) housing permits for staff when they find and make agreements for quarters appropriate by American standards; (e) a fairer, less discriminatory exchange rate (by their own admission most of other diplomatic missions are buying on black market and at least one, the Rumanian, has special arrangement with Government by which it obtains a highly favorable exchange rate; even Government store selling folk arts to tourists quotes dollars at 150 to 1 with National Bank’s approval).

I presume that President could still block remittances by executive action under war time powers. If this is not case I still strongly urge above plan on Department even though introduction of special legislation would be necessary. Tightening coils around Embassy are gradually squeezing it to paralysis and further smear trials will not only destroy what prestige it has left but also strengthen regime. Although I am naturally not in position to make general recommendations it would seem that legislation by which we could block such remittances to any Soviet satellites which did not respect privileges and immunities of our Embassies to them might be effective in obtaining such respect in those countries also. Department will appreciate that if it decides to act on this recommendation question of timing is important: In view of impending smear trial warning might be given immediately on basis of failure to get satisfaction despite repeated representations or might be held in abeyance till further provocative incident actually occurs.

Another step which I believe would be very prejudicial to Yugoslavs would be closing of their Consulates in US which are presumably centers of propaganda and spying on anti-Tito Yugoslavs. This would undoubtedly entail closing of our Consulates and as a reminder of closing of Nazi Consulates in 1941 would be regarded by American public opinion as a grave step. I, therefore, do not recommend it at the present time.⁶

Cabot

1. Telegram 474 not printed; it reported that on May 9, the apartment of Embassy Special Disbursing Officer James N. Spitler had been entered by two Yugoslav soldiers despite Spitler’s claim to diplomatic immunity (123 Spitler).
2. None of the messages under reference here are printed. Telegram 491 reported that there were indications that the trial on spy charges of Embassy translators Markovich and Zmejanovich appeared imminent. Telegram 499 reported that Yugoslav officials were harassing the lawyer who had defended Embassy Guard Wedge and Embassy employee Stefanovich before the Yugoslav courts. Telegram 503 reported that an invaluable Embassy alien employee had been interrogated by the Yugoslav secret police and her cooperation sought for spying on the Embassy. Despatch 806 reported on the obstacles placed in the way of Embassy personnel in obtaining living quarters (124.60H3/5–1247, 5–1447, 5–1547, 4–2147).
3. Not printed.
4. Not printed.
5. None of the despatches under reference here is printed.
6. Telegram 333, May 22, to Belgrade, not printed, replying to this telegram, stated that the Department was urgently examining the possibility of replacing the principal Yugoslav personnel at the Embassy with American clerks. Consideration had been given to the other suggestions made by Chargé Cabot, but action thereon was not believed feasible “at this time”. (124.60H3/5–1547)