No. 664
Memorandum by the Deputy Assistant Secretary of State for European Affairs (Bonbright) to the Assistant Secretary of State for European Affairs (Perkins) 1

top secret

In my opinion the action of the Yugoslav Government a few days ago in seizing a number of Italian fishing vessels2 is the straw that breaks the camel’s back, and faces us with a fundamental decision with respect to our relations with Yugoslavia. I do not see how we can continue as we are at present particularly with the Italian elections coming around next Spring. I believe that Ambassador Allen should be instructed to speak to Tito along the following lines. This is, of course, very rough and will need to be polished up.

We have been unhappy about the state of relations between Italy and Yugoslavia and have been criticized by our Italian allies for leaning too far in the direction of Yugoslavia while those relations remain unsatisfactory.
In spite of this, we have sincerely endeavored up to now to improve our relations with Yugoslavia. While we do not agree with many of their policies and actions, we have gone on the assumption that the fundamental interests of our two countries are parallel, particularly when both of us and the rest of the world are under the shadow of the Soviet threat.
As Tito knows, neither in respect to him nor in respect to any other government have we endeavored to assert pressures or to impose political conditions to any aid which we have extended—military, economic or financial. The countries of Western Europe can testify to this in connection with Marshall Plan aid and Mutual Defense Assistance. Tito himself can testify to it in connection with the various aid programs which we have extended to Yugoslavia.
In accordance with our humanitarian tradition, only last week the US Government approved the program of aid for Yugoslavia in connection with their present serious drought.3 We had hoped to inform the Yugoslav Government of this decision and to implement this program at once.
At the same time, as we were reaching this decision, the Yugoslav Government seized a number of Italian fishing vessels. We do not wish to argue the merits of this case. We do wish to say, however, that taken on top of other matters, including failure to reach a satisfactory solution of the Trieste problem and the recent severance of relations with the Vatican, this latest step puts us in a position which it is impossible for us any longer to ignore.
As stated before, we are not trying to impose conditions or tell Tito what he should do. He should know, however, that it is not possible for us to have the kind of relations with him which we would like to see and have him at the same time carrying on a running fight with one of our most important allies. It is up to Tito to decide.
We intend to keep this approach secret and will not discuss it with any other government.
  1. Copies were sent to Barbour, Byington, Williamson, and MacArthur.
  2. The Yugoslav seizure of Italian fishing vessels is described in telegram 916 from Belgrade, Jan. 5, 1953. (665.686/1–553)
  3. In telegram Musto 194 to Belgrade, Dec. 24, the Mutual Security Agency informed the Embassy that a decision had been reached on Dec. 22 to extend $20 million in supplemental aid to Yugoslavia. (768.5 MSP/12–2452)