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

768.5 MSP/9–2954: Telegram

No. 705
The Acting Secretary of State to the Embassy in Yugoslavia¹

top secret
priority

Washington, September 29, 1954—3:31 p.m.

320. Joint State–FOA cable. Ref: Belgrade 245, rptd London 83, Paris 61.²

1. Favor continuance tripartite program on political and economic grounds, and gratified indications French favorably disposed participate (also see Department’s memorandum conversation September 8, 1954³). In April we solicited participation British and French Governments in economic program for FY 1955 and suggested French contribution equivalent four million dollars. While British publicly announced June 30 their decision not furnish further aid to Yugoslavia and consequent termination tripartite, at same time British have advised Yugoslavs and French they intend grant Yugoslavs two million pounds upon Trieste settlement being concluded. To maximum extent possible we have sought in press handling to dissociate our aid, including $20 million from FY 1954 funds for port reconstruction, from Trieste settlement and understand London telegram 5518⁴ British have same intention re their two million pounds. Cover for British contribution for Trieste settlement would be continuance tripartite program. There is also important financial basis (in terms Yugoslav needs and our limited resources) for continuance general economic aid Yugoslavia by UK and France. Belgrade has indicated (Embassy telegram 1303⁵) considerable portion British two million pounds might be available over and above port and construction costs, for general economic needs Yugoslavia.

2. Department suggests procedure that, immediately following Trieste settlement, Embassy Belgrade, in coordination with British Embassy, reply to French Embassy approach, pointing out that our basic position remains as stated in our Aide-Mémoire April 5.⁶ This will keep discussion in usual Tridel channel. In interests securing formal indication French concurrence it might be appropriate propose French make reply our Aide-Mémoire with copy to British. Believe in view time element and relative magnitudes involved you should seek agreement in principle to continue participate through contribution of approximate amount which we suggested. Do not consider fourth tripartite conference necessary to secure French and British contribution. If French persist in ratio 3 to 2 to British to which previously adhered (i.e. 3.73 million dollars) this would still be material addition our aid.

3. Comments addressees requested soonest before approach British for their views.

Smith

1. Drafted by Colbert and cleared with EE, WE, BNA, EUR, E, and FOA. Repeated for information to London and Paris.
2. Telegram 245, Sept. 24, reported that officials at the French Embassy in Belgrade had indicated that the French Government was favorably disposed toward the continuation of the tripartite aid program for Yugoslavia, and that if the British Government did not wish to continue the tripartite program, the French Government might be persuaded to proceed on a bilateral basis with the United States. (768.5 MSP/9–2454)
3. This memorandum describes a conversation between Ruffin of the French Embassy and Scoll and Colbert, during which Ruffin made it clear that France had in no sense precluded the possibility of furnishing some economic assistance to Yugoslavia. (868.00/9–854)
4. Dated June 4, not printed. (750G.00/6–454)
5. Dated June 9, not printed. (868.10/6–954)
6. Document 690.