Foreign Relations of the United States, 1952–1954, Eastern Europe; Soviet Union; Eastern Mediterranean, Volume VIII

768.5 MSP/3–1952

No. 637
Memorandum by Robert P. Joyce of the Policy Planning Staff to the Assistant Secretary of State for European Affairs (Perkins)¹

secret

[Washington,] March 19, 1952.

Subject:

• Meeting with Yugoslav Ambassador Popovic and Yugoslav Minister of Industry Vukmanovic²

Ambassador Popovic asked me to luncheon at the Yugoslav Embassy on Monday, March 17. The only other American present was Mr. Averell Harriman. Only Popovic, Minister of Industry Vukmanovic and Yugoslav First Secretary (interpreter) Bruner were present at the luncheon and the discussion lasting one hour and a half which followed.

The obvious purpose of the luncheon was to arrange a conversation between Vukmanovic and Mr. Harriman and to enlist the latter’s support in the Yugoslav efforts to obtain financial and economic assistance from the West. There was a great deal of discussion about Yugoslavia’s economic position from which nothing particularly new emerged. Several points were brought out, however, which may be of interest to you and are set forth below. Mr. Harriman stated that he had been completely involved in the MSA hearings in Congress and that he had not been able to brief himself on the present position relating to the tripartite negotiations with the Yugoslavs with regard to economic and financial assistance.

Vukmanovic and Popovic stated that the situation had presently reached something of a dead center in that the tripartite negotiations seemed not to be moving forward in a favorable sense for the Yugoslavs and this fact conditioned and held up important parts of the long-range program which the Yugoslavs had negotiated with the World Bank. He added somewhat bitterly that the British now seemed to be putting great stress on the exploitation of Yugoslav national resources rather than programs which would permit the Yugoslavs to industrialize. He said, for example, the British were pushing for a vastly expanded lumber industry and if the Yugoslavs followed British suggestions in this regard it would mean the complete de-forestation of Yugoslavia in a period of about a decade. He added that the Yugoslavs desired to obtain industrial equipment such as paper mills and “viscose” machinery which would permit them to develop their own exploitation of forest resources in an orderly manner. The British only seemed to be interested in obtaining lumber and other raw materials from Yugoslavia.

Mr. Harriman stated that he would brief himself on the present status of the tripartite negotiations but he was careful not to make any commitments one way or the other to the Yugoslavs although he appeared to be generally sympathetic with their position.

Asked by Mr. Harriman what his impressions were of his visits to American industrial plants and what his general impressions were of the United States, Mr. Vukmanovic stated that they were very favorable indeed and that he had learned a lot. He said that most of the American industrialists he had met had been open and sympathetic but that some of them had exhibited suspicions as to the genuineness of the break between Belgrade and Moscow. He added that the DuPont people had shown him absolutely nothing and had generally been unsympathetic. This secretive attitude somewhat astounded Vukmanovic who commented that he was, after all, only a lawyer by trade and in any event a quick look at some of the DuPont plants would not make him capable of giving away any production secrets as he was a rank amateur in that field.

Asked what his impressions were generally of the United States and “American capitalism” and whether what he saw confirmed his previous ideas, Vukmanovic laughed heartily and said that his education had been almost entirely in Russian communist ideology and certainly conditions in this country did not conform to communist stereotypes. He added that the only times he had left his own country previous to this trip were to visit the Soviet Union for a couple of weeks plus a brief trip to Switzerland a year or two ago. He added that he was almost entirely ignorant of what the West was really like and that this trip had been an eye-opener for him.

Vukmanovic, backed up by Popovic, then proceeded to discourse on the beauties of private initiative and he said that the Russians were wrong in thinking that slave labor and complete state control of all economic activity was the answer to more production. He said that in Yugoslavia they had learned that the Kolkhoz system which they had tried to apply in Yugoslavia following the Russian model, was no good. He stated that they were now planning along the lines of voluntary cooperatives to increase agricultural production. Mr. Harriman then stated that in the United States the application of machinery and the role of the federal, state and county governments had vastly increased agricultural productivity here. He added that the role of the state in agriculture should not be minimized in this country but that this role had been one of technical advice, suggestions and specific assistance to farmers.

In response to Vukmanovic’s question as to what he thought of the Yugoslav industrialization program in general, Mr. Harriman replied that his impression was that the Yugoslavs had been trying to do too much in too short a time to industrialize their country. He believed that a more modest program would be better with the emphasis on those industries and the development of industrial production which would within the next few years start to pay off and thus place Yugoslavia in a better foreign trade position. In short, the Yugoslavs might have set their sights too high and placed too much emphasis on long-range and costly programs which had led to half-completed plans and industries which would not be productive for many years. Mr. Harriman also spoke of the necessity of educating workers in the techniques of modern industry. Messrs. Vukmanovic and Popovic appeared to agree with Mr. Harriman.

Vukmanovic stated that he would recommend upon his return to Belgrade that there should be a stepped-up exchange on the economic and industrial level between his country and the West, particularly the United States. He said that he was in favor of large numbers of Yugoslavs coming to this country to learn industrial techniques and he thought that his Government should obtain the services of American technicians to assist the Yugoslavs in their own country.

Mr. Vukmanovic asked Mr. Harriman’s impressions of how he thought things in general were going in Yugoslavia. Mr. Harriman replied that he had only visited Yugoslavia twice, once in 1927 and the next time very briefly in 1951 when he had met Marshal Tito. He went on to say that the Yugoslavs were all working very hard and were determined to protect the independence of their country from foreign aggression. He added something to the effect that the political situation appeared to him to be sound and the country united. Mr. Harriman asked me whether I agreed with him and I replied “not quite”.

I pointed out to Mr. Vukmanovic that perhaps some of the coldness which he had observed in this country toward him and his Government was due to the fact that Americans were attached to the ideas of basic human freedoms and that his country was a communist dictatorship. I added that it had been noted in this country that the regime in Belgrade during the past four years had been liberalizing itself and playing with Western ideas of freedom and the basic rights of the individual. It appeared to some observers, however, that the Yugoslav Government is something like the woman who was intrigued by the idea of having an affair but at the same time insisting on maintaining her virtue. Vukmanovic and Popovic laughed uproariously at this analogy. I added that some American observers of the Yugoslav scene were of the opinion that the Yugoslav Government could be essentially stronger, tougher and in a better position to defend the country against its enemies should there be a wider extension of freedom.

Mr. Vukmanovic gave the stock Yugoslav reply to the effect that Yugoslavia was surrounded by bitter enemies and that the State must at this time exercise many controls etc. He added that the Americans could be assured that it was the policy of the regime, when the international situation was somewhat less dangerous, to grant more and more individual liberties and that the record of the past four years proved this. We did not pursue this subject further nor was there any discussion of communism.

When we left the Yugoslav Embassy, I said to Mr. Harriman that I hoped that he did not mind my saying what I did as there was a great deal of evidence to show that

1) the Police State in Yugoslavia was a present reality and totalitarian tactics very much still existed;

2) the Yugoslav people were discontented and the vast majority were disaffected, against the regime and only the threat of invasion from abroad or a Cominform take-over from within enabled Tito and the Yugoslav Communist Party to keep the lid on; and

3) many observers considered that should Yugoslavia be attacked, the Yugoslav army and the people as a whole might offer only half-hearted assistance so great was their opposition, particularly on the part of the peasants, to the communist regime.

I added that I thought we might continue to needle the Yugoslavs from time to time so that they might not operate under any false ideas that this Government had any love for the regime as such. I said that very recently Tito had made speeches and orders had gone out through the apparatus of the Yugoslav Communist Party to the effect that communist ideology should be strengthened and the growth of “Western ideas” should be combatted vigorously throughout the country. There was a despatch from Meyer Handler from Belgrade in the New York Times that morning to the effect that at a meeting of the National Students Union in Zagreb, the Yugoslav CP had stated that Western concepts as opposed to communist concepts were no longer to be tolerated and the “enemies of Socialism” were to be combatted with the greatest vigilance. Tito himself then stated: “We are being washed by the waves of petty bourgeois ideas from the West.” Another Yugoslav CP leader had urged the students to study Marxism and insisted that more attention be paid to dialectical materialism in the medical schools as well as in the schools where the exact sciences are studied.

Robert P. Joyce

1. Also addressed to Bonbright. In an attached, undated, handwritten note to the two addressees, Joyce wrote that he had thought Popović was giving the usual social lunch for Vukmanović and he had not thought it was “an operation aimed at Averell.” He said he did not know why he had been invited. He also assured Perkins and Bonbright that he was “an unwilling operator in this field” and expressed his hope that they and EE did not feel that he was “barging in.” He indicated on this note that he was sending a copy of the memorandum to EE.
2. A delegation headed by Minister of Industry Svetozar Vukmanović-Tempo had arrived in the United States on Feb. 8 on an unofficial visit. The Yugoslav Delegation visited the Tennessee Valley Authority and various industrial plants in the South and Midwest. Documentation on the origin and planning of the Vukmanović-Tempo visit is in file 611.68.