740.5/9–1054: Telegram

No. 265
The Acting Secretary of State to the President, at Denver
top secret

Unn. Following are brief memoranda on subjects your letter September 3.1

[Here follow sections regarding the European Defense Community and United States policy toward Latin America.]

Trieste. Our plans on Trieste were covered by our recent exchange of telegrams.2 Bob Murphy will leave Saturday for Europe in an attempt to push through a final settlement. The basic outstanding issue is over a small piece of territory which both sides insist on getting. The second outstanding issue is the reparations one but we estimate that it will be agreed if a territorial settlement can be reached. The Yugoslavs are in great need of wheat, which we can provide under our law. Harold Stassen is arranging this. In addition the Yugoslavs are greatly worried by their financial problem of converting their short-term liabilities into long-term obligations. They would like our moral and political support in accomplishing this and have proposed sending their Finance Minister here to discuss the problem with us.3 We have encouraged his coming. Both the wheat and the financial problem give us a certain leverage on the Yugoslavs, which we intend to employ in reaching a Trieste settlement.

  1. Presumably a reference to the letter quoted in footnote 1, Document 256.
  2. Smith’s unnumbered telegram dated Sept. 3, Document 256, and Eisenhower’s reply of Sept. 3, summarized in footnote 2, ibid.
  3. Regarding the visit to Washington by Yugoslav Finance Minister Svetozar Vukmanović-Tempo in November 1954, see Documents 717 and 719.