641.60H31/6–1349: Telegram

The Acting Secretary of State to the Embassy in France

secret   priority

2715. For Amb Cannon.1 We asked Brit Emb for clarification report in London’s 2273 June 13 rptd Belgrade 502 that Peake wld offer Yugos 5 to 7 million sterling credit for purchase capital equipment Britain in connection present Brit-Yugo trade negotiations, since we feel extension govt credits Yugo raises question whether political conditions shld be attached to extension such credits.

Brit Emb informed us today FonOff considers extension five million sterling credit necessary to enable Tito meet his commitments to Brit under contemplated long-term trade agreement, one purpose of which is enable him realize his five-year plan and thus strengthen his resistance to Kremlin.

Brit Emb here cabling FonOff suggesting that when Peake discusses credit with Yugos he shld point out anomaly of Brit lending to Yugos who support Greek guerrillas at same time as Brit is extending aid to Greek Govt. We stressed to Brit Emb importance concerting our policy toward Tito and Emb will suggest Peake consult you on form such intimation to Yugos and keep you fully informed progress his talks. Emb will endeavor obtain further info on provisions trade agreement and clarification statement re five-year plan which implies Brit agreement on need for rapid Yugo industrialization.

Sent Paris 2175 rptd Belgrade 313, Rome 1232 London 2103.

  1. Ambassador Cannon was in Paris in connection with the Sixth Session of the Council of Foreign Ministers.
  2. Not printed.