360H.115/7–747: Telegram
The Secretary of State to the Embassy in Yugoslavia
464. Embtel 758, July 7.1 1. During first twelve meetings with Velebit and Zlotarvic in claims negotiations respective sides have stated positions on principal topics and some progress effected altho agreement not yet reached on most major points.
2. US now proposing lump sum settlement 46 million, 282 thousand dols for settlement Am claims as follows: 42.6 million dols for property claims, 3.5 million dols for lend-lease and Plan A,2 180 thousand [Page 827] dols for 2 airplanes, and 2 thousand dols for jeep (see paras. 3 to 6 below). Yugo proposed complete separation of settlement for lend-lease and Plan A from other settlements.
3. Lump sum payment tentatively agreed as method for settlement Am property claims. Earlier proposal for mixed claims commission now dropped. US proposed 42.6 million dols for complete settlement property claims Am nationals, including real estate, farms and industrial plants held directly or owned indirectly thru third-country corporations. US total is aggregate of claims without benefit exact info on many. Yugos stated US figure too high because (a) no cases of real estate and farms of Am nationals known to be expropriated; (b) war damage reduced Yugo industrial capacity one-half and therefore presumably should reduce claims based on pre-war valuation by same ratio; (c) no claims should be made for distribution enterprises, since these enterprises were not nationalized; (d) claims for Am indirect interests held thru third-country corporations should be presented by third country and not by US, but Yugos would accept claims Am corporations whether or not alien owned; (e) former Yugo citizens naturalized as Am nationals without permission Yugo Govt are dual nationals and therefore ineligible as US claimants for compensation in dols and (f) purchases by Am nationals of Yugo property from nationals of third country and from nationals of third countries naturalized in US not entitled to dollar transfers when property nationalized.
4. Yugo counter-proposal two million dols for settlement Am property claims. Yugos state total US business investment in Yugo in 1941 was 5 million dols, according to US Dept Commerce figures, of which one and one-half million dols represents distribution enterprises not expropriated. From remainder, 50 percent deduction for war damage left two million dols proposed by Yugos in full and final settlement of all Am claims for property directly owned Apr 6, 1941 by nationals as of that date.
5. US initially proposed three and one-half million dollar payment by Yugos in settlement of combined lend-lease and Plan A. Yugos rejoined that Yugo military aid primarily to US Air Force more than this amt, therefore asked cancellation. US rejected Yugo statement on ground that mutual military aid given by all Allies and that three and one-half million is scaled-down figure, but asked Yugo for statement of value placed by Yugos on different items military aid given US.
6. US requested 180 thousand dols payment for two airplanes and 2 thousand dols payment for Stoeckel jeep. Yugos demurred on airplanes and will present memo on subject, but agreed to pay 2 thousand dols for jeep.
[Page 828]7. US proposes to unblock Yugo assets, except those having enemy interests within 30 days after receipt by US Treasury from Yugo of lump-sum amts specified in agreement as finally signed.
8. US has proposed, without specific objection so far by Yugos, that Yugo shall permit US Gov officials free access to properties, records, witnesses and other info in Yugo pertinent in determining validity and amts individual Am claims filed to participate in lump-sum settlement.
9. Other US proposals, so far not specifically commented upon by Yugos, provide (a) Yugo authorization for Yugo residents to settle lawful indebtedness in dols on maturity within limits of Yugo foreign exchg resources; (b) Yugo Govt to attempt reach settlement with representatives Am holders Yugo bonds; (c) Am owners’ property in Yugo, not taken before June 1, 1947, have benefit most-favored-nation treatment in administering such assets and income arising therefrom, in accordance with Convention with Serbia signed Oct 2–14, 1881; and (d) attention to be given by Yugo authorities to requests for transfer of bank deposits to US.
10. Matter exchg rate for Emb (Embtel 758, July 7) has not been brought into negotiations. US intention, not yet stated to Yugos, is to ask for not less than 550 million dinars in settlement lend-lease and Plan A, such dinars for operating funds for Emb and purchasing real estate. Would such acquisition of dinar fund meet Emb’s present problem if expendable at realistic exchange rate? If Emb believes negotiation on official exchg rate itself would be definitely preferable, pis inform Dept principal reasons for such preference (urtel 642, June 143).
11. For info Dept, pls report conflicting rumors from other Embassies, Belgrade (2nd sentence Embtel 758, July 7) concerning status and likely outcome Wash negotiations.
12. On June 23 the Yugos claimed indemnity amounting to about $9,150,000 for allegedly tardy restitution Danube boats from American zones Germany and Austria and requested this claim be included in negotiations. US rejected Yugo request by note July 11, adding that US does not recognize validity of claims based on timing of restitution. Yugos again requested inclusion subject in negotiations in note July 7.
- Not printed; it requested information regarding the status of the claims negotiations being conducted in Washington with Yugoslav representatives (360H.115/7–747).↩
- “Plan A” refers to those American military and civilian relief supplies delivered to Yugoslavia prior to the establishment of the UNRRA program.↩
- Not printed.↩