Foreign Relations of the United States, 1955–1957, Central and Southeastern Europe, Volume XXVI

255. Memorandum From the Deputy Under Secretary of State for Political Affairs (Murphy) to the Secretary of State¹

Washington, September 16, 1955.

SUBJECT

• Suggested Lines of Policy and Tactics for my Talks with Yugoslav Officials in Belgrade During Last Week of September

In anticipation of my forthcoming discussions with President Tito and other Yugoslav officials in Belgrade which will begin about September 27, it seems appropriate to submit to you this memorandum on the state of U.S.-Yugoslav relations which summarizes the situation with which we are faced and seeks your approval for certain policy and tactical lines recommended at the memorandum’s conclusion.²

Factors Governing Yugoslavia’s Position:

There are a number of factors operating to pull Yugoslavia’s leaders towards and others to draw them away from both the Soviet bloc and the Free World, The primary lure of the Soviet orbit results from the ideological affinities between it and the Yugoslav regime, now partially reflected in a renewal of Communist Party ties. While there can hardly be any significant faction in the Yugoslav Communist Party whose primary loyalty is to the USSR rather than to Tito, it is nevertheless true that many Yugoslav Communists feel more at ease in a Communist milieu—which is only natural in view of their backgrounds and their still proclaimed belief in the inevitability of the eventual socialization (though not necessarily via revolutionary methods) of the entire world. Reinforcing these considerations is the fact that the Soviet bloc is a natural economic and trading partner for Yugoslavia. This was highlighted on September 1 by a new Soviet-Yugoslav economic agreement which provides in principle for a much expanded level of trade in each of the next three years ($35,000,000 in each direction), generous Soviet credits for the purchase of Soviet raw materials ($54,000,000 over a three-year period to be repaid in 10 years at 2 percent interest), a $30,000,000 Soviet “gold” loan (on identical repayment terms), miscellaneous investment loans in medium-sized fertilizer plants and mines, and the promise of peaceful atomic energy collaboration. According to the chief Yugoslav negotiator, Vice-President Vukmanovic-Tempo, the program will require further discussion of and agreement on details in January 1956 before implementation can begin. From the still incomplete information now available, it does not appear that carrying out this new accord with the USSR will necessarily involve the Yugoslavs in any Battle Act³ violations. Besides these economic and ideological factors, the Yugoslavs will also be inclined to accommodate themselves to the Soviet Union to the extent that they consider that this assists them in the active pursuit of their goal of obtaining a position of leadership in an Eastern Europe composed of national Communist (Titoist) states—a goal which can only be reached if the Soviets agree to relax their grip on some of the satellites.

Countervailing factors inclining the Yugoslav regime toward the Free World are also numerous. First of all, popular sympathies (which probably extend even to a majority of rank and file Party members) are overwhelmingly oriented towards the West. Although the regime does enjoy secure control over the internal political scene, anti-Western policies would only increase latent discontent. Secondly, despite recent trade and economic agreements with the Soviet orbit, the Yugoslav economy and its commerce will still be predominantly tied to the Free World both for normal commercial transactions (70%–80% of total trade) and for special credits and economic assistance. Thirdly, potential military threats to Yugoslavia come only from the Soviet bloc. Moreover, a flow of spare parts and replacement equipment from the West (primarily from the U.S.) is essential for the maintenance of the armed forces. A fourth consideration stems from Tito’s quest for international prestige and importance, a status which he will lose if he resubmerges himself into or identifies himself too closely with the Soviet bloc. Finally, the regime is interested in maintaining its special ties to Free World Social-Democratic parties, which would probably cease if Yugoslavia became too closely identified again with the Soviet world.

Yugoslavia and United States Policy Objectives:

The divergent factors influencing the regime have led it to adopt a policy of playing one side off against the other to extract the maximum gain possible for itself. This policy precludes over-attachment to either major world power grouping and, they believe, offers the best hope of preserving the nation’s military and economic strength and independence. At the same time, it allows Yugoslavia to maintain good relations with both East and West and to be especially active in promoting a world-wide détente (in recognition of the fact that a major war would be likely to be fatal to the regime regardless of the winning side).

Since the United States shares the regime’s own objective of an independent and reasonably strong Yugoslavia, it is willing to countenance the regime’s tactics in the full realization that the regime will continue to utilize every suitable form of pressure available to gain further concessions and support from the U.S. In this situation, it is in the U.S. interest to maximize the pull upon Yugoslavia of the above-enumerated factors inclining Yugoslavia to the Free World and to minimize attractions to the Soviet orbit.

Current US. Military and Economic Aid Programs for Yugoslavia:

In a desire to bolster Yugoslavia’s position during the period of great Soviet pressure against Tito (July 1948–1954), the U.S. has made available sizable amounts of military and economic assistance to Yugoslavia. In the past several years, the U.S. has given Yugoslavia $503,200,000 worth of economic aid (almost all in the form of grants), well over half of which consisted of shipments of food and other agricultural surplus commodities. In addition, the Export-Import Bank has extended Yugoslavia a long-term loan of $55,000,000, and U.S. backing has been an important factor in getting for Yugoslavia over $400,000,000 in loans and credits from various sources in Free World countries and from the IBRD. Yugoslavia is presently seeking large additional U.S. wheat and cotton grants in FY 1956, another Export-Import Bank loan, and U.S. “good offices” in supporting Yugoslav moves to ameliorate the terms of its indebtedness with other Western countries and in that way to assist in achieving an eventual balance of Yugoslavia’s foreign payments.⁴

From FY 1950 through FY 1955, $772,200,000 has been programmed in military aid, but this total is now being revised to add at least $150,000,000 for jet aircraft. The Army program of $534,400,000 was 81% delivered as of May 31, 1955. [16 lines of source text not declassified]

[4 paragraphs (1-1/2 pages of source text) not declassified]

Recommendations:

In this situation, I request that you approve the following recommended course of action which I propose generally but flexibly to follow in Belgrade:

• 1. Transmit President Eisenhower’s letter of introduction and explanation to Tito.⁵

• 2. Launch into general political conversations which will bring up to date the over-all world and European review made during the talks in Belgrade from June 24 to 27 between the U.S., U.K. and French Ambassadors and the Yugoslav Acting Foreign Minister.⁶ Use these talks to feel out the fundamentals of the Yugoslav position. Explore the seriousness of the regime’s intentions and expectations for a disruption of Soviet domination of the satellites, not discouraging Yugoslav ambitions in this direction, but bearing in mind both the possible disadvantages to the U.S. of a grouping of national Communist (Titoist) states in Eastern Europe, and the risks of extended U.S. involvement in Balkan Affairs.

  [Numbered paragraphs 3 and 4 (33 lines of source text) not declassified]

  5. Inform the Yugoslavs of U.S. readiness to undertake certain measures of economic assistance. Have authority, to be used as seems best depending on the progress of the discussions, to advise the Yugoslavs that the U.S. is ready to discuss economic aid under the FY 1956 mutual security program. Advise them also that the U.S. is ready to furnish certain tonnages of wheat and cotton which they require. (Clearance in principle for these aid programs is under way with the Department of Agriculture, ICA and other interested agencies.) If the Export-Import Bank agrees, inform the Yugoslavs that the Export-Import Bank is prepared, in principle, to respond favorably to their request for a loan for the development of a copper mine (which the Soviets are probably also interested in developing).

  6. Reaffirm to the Yugoslavs the U.S. readiness to offer constructive advice and help in their current and long-range economic problems, and offer our “good offices,” as appropriate, in Yugoslavia’s approaches to its medium-term creditors.

  7. Clear the way for final conclusion of the Facilities Assistance Program contracts amounting to just over $2,000,000 (legal deadline for action is October 1).

  8. Offer cooperation on atomic energy questions (S/AE has agreed to discussions with the Yugoslavs on furnishing a research reactor and fuel for it and on inviting Yugoslav scientists and technicians to attend non-sensitive training courses in the U.S.).

  9. Deliver to Tito President Eisenhower’s letter inviting Tito to visit the U.S. this fall if it appears advisable and necessary to do this in re-establishing U.S.-Yugoslav relations on a firm footing. Alternatively, if the invitation is not delivered, refer to informal indications by the Yugoslav Embassy in Washington of Tito’s wish to have you visit Belgrade and inform the Yugoslavs that you would like to pay an official visit to Yugoslavia and are prepared to do so within the next six months on some mutually agreed occasion when your schedules permit.⁷

1. Source: Department of State, Central Files, 611.68/9–1655. Secret. Drafted by Mark.
2. Regarding the origins of the Murphy mission to Yugoslavia, see Document 253.
3. The Mutual Defense Control Act of 1951, approved October 26, 1951, forbade U.S. assistance to countries shipping strategic goods to Soviet-dominated areas; 65 Stat. 644.
4. The Yugoslav Defense Support Program for fiscal year 1956, contained in the Mutual Security Act for fiscal year 1956, was debated by Congress throughout the summer of 1955. Congress questioned the wisdom of a continued appropriation for Yugoslavia in the amounts suggested by the administration, in view of Yugoslavia’s increased neutrality and apparent rapprochement with the Soviet Union. Congress also expressed concern over Yugoslavia’s lack of cooperation with the AMAS Program. Congress did finally agree to continue assistance for Yugoslavia, although at a reduced amount, for fiscal year 1956 under the terms of the Mutual Security Program. (69 Stat. 283) Congressional attitudes were discussed in telegram 1015 to Belgrade, June 14 (Department of State, Central Files, 768.5–MSP/6–1455); telegram 56 to Belgrade, July 21 (ibid., 768.5–MSP/7–2155); and Icato A–22 to Belgrade, July 27 (Washington National Records Center, ICA Message Files: FRC 57 A 248).
5. Infra.
6. See Document 252.
7. The source text bears handwritten revisions of paragraph 9 by Secretary Dulles. The paragraph reflecting these changes, read as follows: “If authorized by me at the time, deliver to Tito President Eisenhower’s letter inviting Tito to visit the U.S. this fall if it is agreed by you and us in Washington, that it is advisable and necessary to do this in re-establishing U.S.-Yugoslav relations on a firm footing. Alternatively, if the invitation is not delivered, refer to informal indications by the Yugoslav Embassy in Washington of Tito’s wish to have you visit Belgrade and inform the Yugoslav Embassy in Washington of Tito’s wish to have you visit Belgrade and inform the Yugoslavs that you would like to pay an official visit to Yugoslavia and are prepared to do so within the next six months on some mutually agreed occasion when your schedule permits. This to be cleared in advance by me, if conditions permit.” An undated draft letter from President Eisenhower inviting Tito to visit the United States in 1955, which is marked “not sent,” is in Department of State, Presidential Correspondence: Lot 66 D 204, Tito.