125. Telegram From the Embassy in Yugoslavia to the Department of State0

1552. 1. There is little question in our minds of sincerity of Yugoslav resentment at provisions in US legislation requiring continual review of Yugoslav policies before they are eligible for US assistance, and that such provision (Deptel 927)1 will strengthen sentiment within regime to forego aid when their “material possibilities” are sufficient to permit them to do so. Issue is more form than substance, of course, since Yugoslavs realistically recognize (and have directly stated more than once) that US must consult its own interests in proffering assistance, hence that Yugoslav performance is in fact continually under review. Problem is one of prestige and pride, that Yugoslavia answerable to no one for its actions, plus propaganda issue as between Yugoslavia and Soviet bloc. Presidential determination under House amendment [Page 332] would readily lend itself to exploitation by Soviet bloc as further evidence of thesis in Pravda editorial, namely that US aid is designed to put countries receiving it into position of dependence on US and that that is in fact what has happened in Yugoslavia.

2. Regards “material possibilities”, Yugoslavs could probably get along without US assistance now, but only at considerable sacrifice to standard of living and attainment its investment and other economic and social objectives. This would be extremely difficult for regime at this particular time, for two main reasons. First, as evidenced by major campaign against economic offenses and abuses, as well as efforts imbue trade unions with new life and responsibilities regarding welfare and standard of living of workers, latter is important political issue internally at present time among other things as direct result of Trbovlje strike.2 While regime could probably successfully ask masses to pull in their belts in defiance Soviet economic pressure, it would not have same capability were economic stringency to arise as direct or indirect result of pro-Soviet actions on part of regime. Refusal of US aid would be so interpreted by masses. Secondly, given present crisis in Yugoslav-Soviet relations, in face of which many Yugoslavs are still fearful regime may reach compromise and “go back” east, it would be most difficult politically for regime to lose western economic assistance. West’s willingness continue give Tito assistance is best proof he has that his policies have not alienated west, and his willingness accept it is best proof he has that he has not succumbed to east’s blandishment.

3. In light foregoing seems clear regime will not seek excuse to refuse aid, and that it would probably be prepared continue accept US aid despite inclusion of provision in Mutual Security Act. However, there is no question but that such provision would make acceptance aid highly distasteful, tend to sour Yugoslavs on US and stimulate them at every opportunity to take foreign policy positions which might be contrary to those of US and thus could be pointed to as evidence Yugoslavia’s independence of US despite aid. Hence in these ways provision injures US-Yugoslav relations and further it gives propaganda weapon to Soviet bloc and thus weakens Yugoslav posture in relation bloc. For these reasons Embassy and USOM concur decision executive branch oppose amendment. While we would not wish press for deletion of provision if there is no chance being successful so that only result would be merely stir up publicity to no useful end except Russians, we believe that so long as there is possibility getting rid provision, we should exert efforts do so.

  1. Source: Department of State, Central Files, 768.5–MSP/5–1958. Confidential.
  2. Telegram 927, May 17, requested the Embassy’s analysis of the effects on U.S.-Yugoslav relations of passage of an amended version of the Mutual Security Act requiring the President to report on the independence of Yugoslavia prior to the release of aid to it. (Ibid., 768.5–MSP/5–1758)
  3. See footnote 4, Document 121.