660H.6531/7–1849: Telegram

The Ambassador in Italy ( Dunn ) to the Secretary of State


2198. Re Belgrade’s 58 to Department as 674, July 16.1 Signature of Italo-Yugoslav trade agreement was put off sine die by Italians after Zone B currency substitution although both text and substance had been agreed by that time ad referendum by delegations. On inquiry July 15 of principal Italian negotiator by Yugoslav minister as to “reasons” for Italian action, Italians stated that obviously before Italian Government could sign the agreement Yugoslavia would have to do something to help pacify state of Italian public agitation which had been caused here by Yugoslav currency substitution and Pola speech. It seems as a result of these personal and informal observations exchanged at President’s reception July 15 (not in Foreign Office) Yugoslav Minister undertook to recommend that his Government make some sort of useful public statement. Italians specifically suggested and so informed their Legation Belgrade that Tito grant interview to a foreign correspondent saying for example:

That meaning of Yugoslav action in Zone has been distorted (by the Cominform?);
That that action was a technical, not a political one;
That it would be pity if ill-wishers were able as a result to place obstacles in path of Italo-Yugoslav economic rapprochement which [Page 517] two countries had been following (witness fishing agreement et cetera) and that there was much gain to both countries by concluding trade agreement which had been negotiated.

Sent Department 2198, repeated Belgrade 95.

  1. In this telegram, not printed, Ambassador Cannon asked whether the Italians had carried out their plans to suspend trade negotiations (660H.6531/7–1649).