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

860H.00/9–747: Telegram

The Ambassador in Yugoslavia (Cannon) to the Secretary of State

restricted

Belgrade, September 7, 1947—10 a. m.

1017. Important role of Yugos in debates in approaching GA of UN¹ prompts me to put before Department following review covering present position this govt as to its internal political stability, its economic strengths and weaknesses, its strategic potential and its freedom of action in world affairs.

1. This tight dictatorship operated by Communist Party has had two years consolidate its power. There is much sullen bitterness among people at large and few sporadic raids by guerrillas in woods but by combination of police terror, use of military for internal security, suppression civil liberties, incessant propaganda and social reforms, this minority regime has undoubtedly entrenched its position and has been able to hold in check old conflict between Croats and Serbs. Altho govt has systematically eliminated opposition leaders, latent opposition exists among peasantry at large and among Roman Catholic element. Opposition though potentially important lacks cohesion, organization and program and could not today count on substantial support in army. Top men of regime may be uneasy but they have ruthless determination and some of them have apostolic fervor and we must expect them to be able cope with any attempt overthrow regime from within.

2. From all external appearances Yugo is vigorous and functioning economy. As result hard driving and in spite deficiencies in tools and equipment Yugo has achieved virtually full recovery in pre-war industrial production and has gone far in its agricultural recovery. In some branches production has surpassed 1939 level. It would be a mistake, however, to credit entirely either communism or national efforts for this rapid recovery. Yugo Govt has not yet had to face up to its problems on its own but has been able to draw on enormous UNRRA assistance, superior labor source of German POWs and reparations deliveries which amounted $16 million in first 6 months this year alone.

Foreign trade will be of key significance for next few years. Success of industrialization program will depend on imports industrial machinery transport equipment and spare parts for which Yugo lacks foreign exchange and is further handicapped by primary economic commitments to Soviet and eastern bloc. Its blocked assets in US are of great importance. But Yugos position should not be underestimated. Its trade has been largely bilateral barter and will doubtless continue so. It is using nationalized property claims to compel trade agreements either on threat of non-settlement or to guarantee deliveries from west in return for greater Yugo exports to pay for imports plus claims. Its rich resources in critical commodities—copper, lead, zinc, chrome mercury, timber, alkalis, food stuffs and grains—give it considerable bargaining advantages. Yugos export surpluses both real and sacrificial will not be used in return for its own externally assisted recovery to assist general European rehabilitation but will be exploited for straight political advantages or hard commercial bargains. Notwithstanding asseverations of propaganda regime cynically considers an improved living standard a dispensable luxury for people inured to hardship.

If present trends continue following will be especial economic weaknesses: (1) disproportionately large military establishment, (2) swollen bureaucracy and internal security force, (3) lack of skilled labor and consequent necessity using techniques based on piece work speed up, (4) omnipresent fear and lack of personal security which seems to increase with importance of work to be performed.

3. Strategically Yugo is probably most important satellite in Russian orbit and Yugo in this sense must include Albania which for all practical purposes may be considered seventh constituent republic. Yugo offers Russia an outlet to Adriatic and Mediterranian springboard against Greece, Turkey, Austria and Italy; protecting buffer for Russia, source of food, raw materials and manpower. Yugo armed forces of 350,000 to 400,000 men with 1 to 1.5 million basically trained reserves are developing under Russian control and supervision from guerrilla organization but have not yet achieved status of modern army due shortages in technically trained personnel and latest equipment and limited Yugo industrial capacity and must of necessity be dependent on Russian assistance. Troops are well disciplined and army leadership of young officers and old Communists is loyal to Tito.

4. Tito regime evidently enjoys considerable freedom from Soviet interference in decisions re domestic policy and in determining tempo communization programs. Occasionally in international issues it appears have taken an original position which has been more advanced than Moscow seemed prepared support. It cannot now be determined with assurance, however, whether these original positions represented distinctive national point of view or an instructed probing into western defenses. On evidence now available Yugo stands out as Soviets most faithful and conscientious collaborator rather than satellite and at same time spearhead of dynamic expansionist Communism. Yugo nationalism may well some day conflict with Soviet purpose but this does not seem likely as long present acute east-west division is maintained.

From this intricate mass of conflicting elements I draw these conclusions.

1. In general program of Soviet bloc Yugo Govt seems chosen spearhead expansionist movement. I am thinking here of Italy and even Spain. More immediate problem of Greece with its nationalistic aspects as well as territorial demands on Austria are in part this softening up drive. Something like a HQ of Internationale seems to be functioning here.

2. Judging from Yugo record on previous international engagements we can expect no genuine cooperation in international field. Present leaders think that if UN ceases be useful forum Soviet bloc should not hesitate go it alone.

3. Individualism of peasants, chafing of general population at restraints and real friendship of Yugo people for US support parliamentary institutions genuinely desired; but regime dare not risk a compromise or accept process orderly evolution. Any gesture in this direction would be tactical only.

4. Rate of genuine rehabilitation, zeal of regime and intoxication with own propaganda have blinded it to certain indisputable weaknesses. It is cocksure rather than really strong. We should not underrate the danger that this cockiness may lead to tragic adventures.

This telegram prepared in consultation all officers including service attachés. Latter ask that text be made available War and Navy.

Sent Department 1017; repeated Moscow 56, Athens 46.

Cannon

1. The second regular session of the United Nations General Assembly convened at Flushing Meadow, New York, on September 6. The United States had already requested that the problem of the threats to the political independence and territorial integrity of Greece be included on the agenda of the General Assembly. For documentation of this matter, see volume V.