Foreign Relations of the United States, 1949, Eastern Europe; The Soviet Union, Volume V

CFM Files, Lot M–88, Box 144, Memos Conv Formins and Sec Sep 1940

Memorandum of Conversation, by the Secretary of State

top secret

[Washington,] September 14, 1949.

Participants:	Mr. Bevin1
	Ambassador Sir Oliver Franks2
	Sir Gladwyn Jebb3
	Sir Roger Makins4
	Mr. Barclay5
	Mr. Acheson
	Ambassador Jessup6
	Mr. McGhee
	Mr. Thompson
	Mr. Achilles
	Mr. Satterthwaite7

Subject: Conversation with Mr. Bevin on Yugoslavia

Opening the discussion on Yugoslavia, I said the main difficulty in our view was the country’s economic position. The International Bank will probably not give a dollar loan as the service on the Export-Import Bank loan has already committed Yugoslavia’s dollar earning capacity. The International Bank might be able to arrange a sterling or lira loan. Bevin said the British would like to go into this question with us; that they had just: extended a loan to Yugoslavia of eight million pounds sterling.

Bevin said he wanted to talk to Schuman on Yugoslavia, as Schuman is nervous about the position there.

Thompson said that the Bank is exploring the possibilities of a loan, but it seemed clear that Yugoslavia could only dispose of her principal exports, other than non-ferrous minerals, in Europe. Bevin then speculated whether the European countries together might make a loan to Yugoslavia. This might have some over-all advantage as an outgrowth of the Strasbourg talks⁸ and give a pan-European concept to the loan. Bevin said he would talk this over with Cripps;⁹ that he would like to save Tito, who, although he was a scoundrel, was our scoundrel. Thompson remarked that the economic plight of Yugoslavia for the next six months would be severe, but that the long-range picture was not too bad. Bevin concluded by saying that in areas where we are engaged in the war of nerves, we have to be able to take abnormal steps. We can’t be guided by rules. I said we broke the rules in the case of the rolling mill.

1. British Foreign Secretary Bevin was in Washington in connection with the First Session of the North Atlantic Treaty Organization Council. This conversation on Yugoslavia appears to have been part of a longer meeting during which a number of other topics was discussed. For the record of the conversation on Albania, see p. 315.
2. British Ambassador in the United States.
3. British Deputy Under Secretary of State; Superintending Under Secretary, United Nations Department, British Foreign Office.
4. British Deputy Under Secretary of State.
5. Roderick E. Barclay, Private Secretary to Foreign Secretary Bevin.
6. Philip C. Jessup, United States Ambassador at Large.
7. Livingston Lord Satterthwaite, Chief, Division of British Commonwealth Affairs, Department of State; on October 3, Satterthwaite became Deputy Director of the Office of British Commonwealth and Northern European Affairs.
8. The Council of Europe, established under an agreement signed on May 5 by representatives of ten Western European countries, held its first meeting in Strasbourg, the permanent seat of the organization, in early August.
9. Sir Stafford Cripps, British Minister for Economic Affairs.