Office of the Historian

750G.00/8–3154: Telegram

No. 250
The Chargé in the United Kingdom (Butterworth) to the Department of State1
top secret
priority
London, August 31, 1954—6 p.m.

1079. Limit distribution. Eyes only Secretary. From Thompson. Velebit informed us today that his government could make no concession on territory. The suggestion we had made would be virtually identical with October 8 which Yugoslav public opinion had rejected. On the condition that the territorial line was accepted as is, that the replacement of the cultural houses was agreed including 500 million lire or an adequate alternative house and reparations of 30 million dollars, his government was prepared accept the special statute and the memo of understanding as now drafted as well as to agree to an Italian consulate in Capodistria.

We said we would put this position to the Italians and do our best to secure acceptance but made clear that we thought it unlikely that the Italians would agree to the reparations settlement desired by the Yugoslavs in view of their insistence on the territorial settlement. We also pressed Velebit hard on the 500 million lire to which he replied when he had suggested to his government as his own idea a figure of 150 million, they had replied their figure of 500 million was based on architect’s estimate of their requirement and pointed out that this was about one-half of what it would cost to reconstruct today the Narodny Dom that was destroyed. Velebit again emphasized that from the psychological point of view the Yugoslavs were merely holding on to what they already administered with a very slight rectification whereas the Italians would be getting a very large and valuable territory. I did not conceal that while we would do our best, I personally thought this meant the breakdown of the negotiations.

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We will see Brosio tomorrow morning and urge acceptance. The Department may wish to consider whether advisable urge acceptance on Tarchiani or await inevitable Italian approach.

Butterworth
  1. Repeated for information to Rome eyes only for Durbrow and to Belgrade eyes only for Riddleberger.↩