768.5 MSP/8–2552: Telegram

No. 649
The Ambassador in Yugoslavia (Allen) to the Department of State


236. This is joint State/MSA cable. Ref Deptel 167, Aug 4 and Embtel 233, Aug 25.1

Fol is text of agrmt reached by US, UK and French Ambs and Yugo Govt. If approved, each of three Ambs will send identical letter to FonMin.

“With ref to the exchanges of memoranda of July 10 and 28, 1952,2 concerning econ aid to Yugo by Govts of US, UK and France, I have the honor to inform you that my govt suggests fol as the basis for continuation of this aid during period July 1, 1952 through June 30, 1953:

“Balance of Payments.

“The four govts recognize the importance to Yugo of achieving balance of payments in shortest possible time. It is noted that Govt of Yugo has firmly decided to make the best use of econ aid and to exert internal econ efforts in order to achieve this end. The four govts agree to exchange full info and views in these matters.


“The four govts recognize that the rate of investment must depend in part upon availability of foreign exchange. In view of uncertainties of foreign exchange availability, a system of priorities for the completion of the Yugo investment program is particularly important. The three govts note the statement made on behalf of the Govt of Yugo that in the planning of current investment program due regard is being and will continue to be paid to the establishing of priorities based primarily on the fol criteria: The extent to which project will contribute to an improvement in the balance of payments and the extent to which the project has already been completed. Other criteria, where appropriate, include the extent of development of related industries, the length of time required to complete a project, and ability of an industry to compete in world trade.

[Page 1304]


“The four govts agree that an increase of agric production in Yugo is of prime importance. The three govts understand that the Govt of Yugo is ready furnish info concerning its efforts in this field and to exchange views in order facilitate assistance by the three govts.

“External Debts.

“The four govts are agreed that amelioration of Yugos present sched of debt payments is essential. They further agree that an effective method of obtaining such amelioration must be sought. One possibility which has been suggested is a conf of creditors. Other methods may emerge from joint consideration of the problem. The four govts will therefore undertake prompt consultation with view to arriving at an effective means of achieving amelioration of Yugos debt position.

“Future Loans.

“The four govts agree that the Internatl Bank for Reconstruction and Development shld be regarded to the fullest extent possible as the source of future loans for the Yugo investment program. They recognize that cooperation among them is necessary to achieve this end. Each of the three govts has agreed in principle to support internatl bank for reconstruction and development loan now under consideration.

“The four govts are further agreed that the contracting of loans outside the internatl bank for reconstruction and development is also of concern to the govts contributing econ aid to Yugo and that the four govts will exchange views whenever occasion for such loans arises.

“Raw Materials.

“The Govts of United States, UK and France desire to obtain certain raw materials and products from Yugo, and Govt of Yugo agrees to use its best endeavor to satisfy the reasonable needs of three govts in this field.

“Technical Assistance.

“The four govts are agreed that the provision of tech assistance to Yugo is an important aspect of their econ cooperation, and that to the extent possible they will arrange for sending foreign technicians to Yugo and for training Yugo technicians abroad, both of the higher and lower grades.

“I shld be gratified if Your Excellency wld let me know whether your govt concurs in the foregoing.

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“Pls accept, Excellency, the assurance of my highest consideration.”

  1. Telegram 167 to Belgrade is not printed. (768.5 MSP/8–452) Telegram 233 from Belgrade is supra.
  2. Reference is to the tripartite aide-mémoire of July 10 and the Yugoslav reply of July 28; see supra.