860H.00/6–949: Telegram

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


577. Had more than two hours with Kardelj and Bebler yesterday reviewing internal and external affairs. Kardelj’s chief points:

Economic: Re-orientation economy after Cominform rift required re-grouping of five year plan. Example imports and production consumer goods planned for this year had to be postponed but with harder work and more sacrifices major goals will be reached. Because of national pride and stubbornness people responding nobly. Assured me first hand this year already fulfilled. In non-ferrous metals quantities full plan being finished this year. Agricultural prospects excellent. Shortage technical and skilled labor not problem this year; on contrary real shortage unskilled labor because of concentration on production for western markets such as minerals and timber. Hence large number soldiers being used as manpower. Next year however as plan reverts to industrialization and production for internal market shortage skilled labor will be serious problem. Training program while good will not suffice. Perhaps must import technicians. Admitted cutting timber at too rapid rate because of emergency export needs but large program of forestation already in progress. Yugoslavia must have credit from west and most of it will be used for consumption goods or reconstruction and raising living standard and not as substitute for proceeds of exports. People will work just as hard and maintain or even raise export level.

Political: Internal situation sound; not worried about minor defections; organized revolt out of question. Grumbling of some groups peasants re collectivization more than counter-balanced by others [Page 897] hitherto underprivileged. Housing program encouraging townsfolk. National solidarity promoted by vicious slanders from nearby countries.

Albania: Insults and border incidents hard to bear although this situation so bad he could not risk major incident unless assured strong Soviet support which not expected. Meanwhile Albanian people increasingly friendly to Yugoslavia and now whole villages with chattels and livestock are coming over border creating real refugee problem for Yugoslavia.

Hungary: Has Yugoslavs seriously worried “if trouble comes will be from that quarter”. Thinks peoples, neighboring peoples democracies have sneaking respect for Yugoslav independent position and Cominform propaganda gone stale. Hence Hungary induced risk and lose a few lives to influence popular emotions. “But we won’t tolerate these border crossings. Our men will protect our frontiers.”

Greece: With rebels now hostile to Yugoslavia material aid is not going over. I pressed him hard for more details. What about logistical advantages? Harboring, re-outfitting and returning escaped rebels? Perhaps individual frontier authorities are still doing more than Belgrade intends? He did not deny aid in past but “now it’s all different.” I found this part not very forthright. He seemed unhappy and sick of Greek involvement and rather lamely said “perhaps something will come of Gromyko’s proposal.” He did not refer to last week’s charge that GNA had air strafed Yugoslav village even though in order to prod him I led close to it. I made a little speech about contradiction in our disposition to aid Yugoslavia when Yugoslavia works against Greek independence. He said “but we have no friends there any more” and started talking about Hungary again. He made no mention whatever of Macedonia (which as already reported Yugoslavia thinks it has in hand). He also had nothing to say about either Trieste or Austria. If this was because of exhaustive earlier talks he could at least have made pro-forma statement maintaining Yugoslav position. I felt silence confirmed opinion expressed mytel 536, May 26.1

He did not refer to recent violent exchange of notes with Moscow (Embtel 564, June 42) but general tenor his remarks indicated Yugoslavia [Page 898] not worried about neighbors individually or collectively but blamed Kremlin for all their troubles and Yugoslavs have courage to carry their quarrel straight to source.

He remarked on improvement in press relations and propaganda lines with west saying this must be done gradually and better treatment to be expected.

Reverting to economics I said that if credit phase now opening Yugoslavs must overcome their secrecy and suspicion re statistics, inspection, production figures, etc. Since he had some strange idea[s] on this subject this was quite fruitful discussion. He said decision reached on political grounds 2–3 years ago not to publish statistics and since then figures on lots of items not assembled. Present production schedules have required more statistics but still large gaps. He saw my point that if Embassy required to make recommendations on Yugoslav proposal we must have data. Promised to speak to Minister Foreign Trade and recommend regular liaison Kopčok and Fowler. Think he now better understands International Bank’s inspection requirements.

Sent Department; repeated London 27, Paris 55, Moscow 62, Rome 43.

  1. Not printed.
  2. Not printed; it reported that the Yugoslav press had published the text of a Yugoslav note of May 23 to the Soviet Government protesting against Soviet support for the activities of Yugoslav anti-Tito émigrés in Moscow. The press also had reported upon the Soviet Government’s reply of May 31 (760H.61/6–445). For the texts of the two notes under reference here, see Carlyle, Documents on International Affairs 1947–1948, pp. 450–453 or Ministry of Foreign Affairs of the Federal People’s Republic of Yugoslavia. White Book on Aggressive Activities by the Governments of the U.S.S.R., Poland, Czechoslovakia, Hungary, Rumania, Bulgaria and Albania Towards Yugoslavia (Beograd, 1951), pp. 107–109. The full text of the Soviet note of May 31 was printed in the Soviet press on June 2, and a translation was transmitted to the Department of State as an enclosure to despatch 325, June 4, from Moscow, not printed (760H.61/6–449).