No. 254
Memorandum by the Assistant Secretary of State for European Affairs (Merchant) to the Acting Secretary of State 1
top secret


  • Trieste


As you know, the Yugoslavs have rejected the proposed territorial compromise and insist on the May 31 line, together with $30 million reparations. Brosio has indicated that his Government will certainly reject this proposal.

Mrs. Luce also feels that the Italians cannot accept the May 31 line without change.

In anticipation of a probable rejection, we have wired Thompson instructing him immediately to coordinate with the British in preparing a compromise proposal to be put up by the US–UK.2

[Page 515]

We have said nothing to Thompson about the manner of presentation of such a proposal. After discussion with Mrs. Luce, I suggest that we should plan for Mr. Murphy to go to Belgrade and Rome to present the US–UK proposals to Tito and Scelba, if British consent can be obtained to his acting for our two Governments. The war-time contacts he had with Tito should be particularly helpful.

It should not be difficult to devise suitable cover for his trip, such as a tour of consultation and soundings in the wake of the EDC rejection. His trip to Yugoslavia from one of the EDC capitals could be explained as intended to cover various matters under discussion between the US and Yugoslav Governments.

Mrs. Luce will hold herself ready on a twenty-four hour basis to accompany Mr. Murphy to Rome.3


It is recommended that you approve Mr. Murphy’s going to Rome and Belgrade for the above purposes (and possibly to other capitals in the interest of cover on his way there or back), if the Italians reject the present Yugoslav proposals and if the British agree to a US–UK compromise to be presented by him.

  1. Drafted by Hooker. The source text bears the following handwritten notation: “Gen Smith approved 9/2. LTM.”
  2. Document 252.
  3. In a memorandum to Merchant, dated Sept. 3, William E. Knight wrote that he called Ambassador Luce the previous evening as Merchant had suggested and told her of the decision regarding Murphy’s visit to Belgrade and Rome. Luce suggested to Knight that it might be worthwhile for her to travel back to Rome with Murphy and also that in approaching the Yugoslavs, Murphy should plan a two-fold strategy: (1) he should first try to obtain modification of the territorial line in the direction desired by the Italians, and (2) only if this failed, he should present the US–UK solution, which would then also be presented to the Italians. Luce also said that unless she heard from the Department of State, she would return to Rome on Sept. 8 as presently planned. A handwritten notation in the margin alongside mention of Luce’s suggestion regarding a two-fold strategy for Murphy reads, “I disagree. LTM.” (750G.00/9–354) Luce apparently was not contacted further concerning the possibility of Murphy accompanying her to Rome.