860H.51/8–2349
Memorandum of Conversation, by the Acting Chief, Division of Southeast European Affairs (Campbell)
Participants: | Sava Kosanovich, Yugoslav Ambassador |
Mr. Rusk, Deputy Under Secretary | |
Mr. Campbell, SE |
Ambassador Kosanovich said that he wished to continue discussion of some of the problems which had been brought up in his conversation [Page 930] with the Secretary on August 16.1 He regretted that Mr. Filipovich had not been able to accompany him since he wished to discuss chiefly financial matters. He said that within a few days the Yugoslav Embassy would submit to the Department additional information bearing on its application for loans.
With reference to the requested World Bank loan, the Ambassador said that he was disturbed by the statement made by Mr. Black, President of the Bank, appearing in the morning papers. Judging from the press, he said, Mr. Black stated that Yugoslavia would get less than it expected. Mr. Rusk said that he had not studied the statement and could not comment on it. Mr. Kosanovich said that he feared that the proposed Exim Bank loan might adversely affect the Yugoslav request for a World Bank loan, and that the amount of the former might be subtracted from the total which might otherwise be available under the latter. Mr. Rusk said that there was no such connection between the two applications. He understood that the so-called application for the World Bank loan was in fact a series of projects submitted to the Bank which would be dealt with individually. There was no question of a total sum available for Yugoslavia from the two Banks from which an Exim Bank loan would be subtracted when the Yugoslav projects presented to the World Bank were considered.
The Ambassador then referred to the proposed timber loan which was to be granted to Yugoslavia, along with certain other Eastern European countries, by the World Bank. He said that this loan was already negotiated and agreed upon but had been postponed at the last moment. He wondered whether anything could be done about it. Mr. Rusk said that he was not fully informed on the latest developments in connection with this loan but that he would look into it.
Ambassador Kosanovich then referred to his earlier mention to the Secretary of a small loan for consumers goods. Mr. Rusk said that he had made some inquiries on the subject and felt obliged to say that such a loan would not appear to fit into the general scheme of governmental credits. He said that loans for the purchase of raw materials (such as cotton) might be possible in some circumstances but probably not a general US Government credit for the purchase of consumers goods. The Ambassador said that he had understood that this was the situation and saw what the difficulties were.
Mr. Rusk then asked the Ambassador for clarification concerning the status of Signor Castiglione commenting that the subject seemed to need some further clarification in order that any embarrassment to either Government might be avoided. Mr. Rusk reminded the Ambassador that, when Signor Castiglione had called on him at the [Page 931] Department, he had listened to what Castiglione had to say without giving any encouragement or discouragement and not lending any official nature to the conversation.2 Since Castiglione might at some time purport to state certain views as those of the US, Mr. Rusk continued, it was desirable to have the Yugoslav Government know that Castiglione was not authorized to speak for the US Government; and the Department would like to be sure whether, during his stay here he had any authority to speak for the Yugoslav Government. The Ambassador replied that Castiglione had been helpful to the Yugoslav Government in arranging certain commercial deals with Italy, and that the Yugoslav Government hoped that he might help in arranging certain matters in connection with trade and private loans here in the US. He, Kosanovich, considered that Castiglione’s efforts should be confined to these negotiations with private firms or individuals, and he had no mandate to discuss Yugoslav affairs with the US Government. The Ambassador said that Castiglione had in fact been to the Exim Bank and had certain conversations there. Kosanovich had found out about this only afterward and regretted that it had happened. He felt that talks with American Government agencies should be conducted entirely through official channels.
Mr. Rusk then turned to general political questions, noting that Yugoslavia had been in the headlines in recent days. The Ambassador said that this was unfortunately the case although the events did not always justify the headlines given them. Mr. Rusk asked concerning newspaper reports of unrest in Yugoslavia. The Ambassador replied that there was absolutely no unrest; the situation was completely tranquil. Mr. Rusk then asked in general terms about the Yugoslav attitude toward the United Nations. He inquired what was the general feeling among the Yugoslav people toward the United Nations. Mr. Kosanovich replied that their attitude was wholly favorable. He said that the Yugoslavs had hoped that the UN would develop into an effective organization for preventing aggression. They had had certain disappointments, particularly in connection with the case of Greece, but they retained faith in the UN and saw the need for its further growth. In reply to a question whether Yugoslavia’s attitude toward UNSCOB had changed in the light of recent developments, the Ambassador replied in the negative. He said that, in view of the past history of this question, it seemed better from the Yugoslav point of view that there should be no change in its attitude. However, the Yugoslav Government was endeavoring to stabilize conditions on the Yugoslav-Greek frontier.
[Page 932]In leaving, the Ambassador stressed once more the importance of speed in dealing with Yugoslavia’s requests for economic assistance. He said that this was the most important problem facing his Government. Mr. Rusk said that if the Ambassador would inform the Department of specific cases where Yugoslavia had suffered unreasonable delays as in the granting of licenses, the Department would see whether some of these processes might be speeded up to Yugoslavia’s advantage.