The Ambassador in Yugoslavia
(Riddleberger) to the Department of State
207. Limit distribution. While we have had no conversations with Yugoslav officials other than Micunovic about Murphy visit,2 we gather from British and other diplomats that an atmosphere of uneasiness prevails in official circles that he plans to put the squeeze on Tito and attempt to use Yugosalv’s economic and financial plight, particularly the wheat shortage, to force further territorial concessions favorable to Italy in the Trieste negotiations.
Long before the Murphy visit was known there has been growing resentment at our slowness in giving answers on debts, wheat, etc., and our inaction has been interpreted as a deliberate buildup of pressure by negative means, especially in view of our assurances during negotiations last spring that we would give early sympathetic consideration to Yugoslav’s economic needs directly FY 1955 appropriations were known. That this resentment is widespread inside the regime is clearly indicated by the frankness with which our queries to editors and journalists about the recent unfavorable press comment on US policies are countered by the question “why are you holding out on economic aid?”
Our experience indicates that the Yugoslavs will handle the Murphy visit like the seasoned chess players they are, and we shall urge Murphy to make his opening gambit with above considerations in mind.