174. Telegram From the Department of State to the Embassy in Italy0

1502. Subject: Yugoslav exchange reform. During Dillon conversations in Bonn Nov. 21–22 Germans gave assurances they would find way by end of month or early December participate in assistance Yugoslav program.1 Dillon talks in Paris and London also confirmed readiness French and British participate.2 Other prospective contributors have either indicated firm agreement or agreement in principle.

Accordingly believe time now ripe for meeting of all contributors and Yugoslavia to firm up amounts and discuss terms. View willingness BIS offer its administrative facilities consider Basle most suitable place. Suggest desirable time for meeting would be Dec. 9 and 10, immediately prior meeting of BIS board. This would allow time for completion and transmission to governments of revision of IMF report now being [Page 468] undertaken by Ferras who leaves for Belgrade today. (Original report based on external assistance of $340 million instead of lowered target of $270–275 million already in hands of govts.) According Ferras schedule revised report to be finished end this week and transmitted early week beginning Dec. 5. Following Belgrade Ferras presently plans visit Rome, Vienna and Bonn, arriving Basle in time for meeting Dec. 9 referred to above.

View foregoing Rome requested approach Carli asking whether Italy would be prepared, after consultation Holtrop, Chairman of Board of BIS, to take lead in calling meeting at BIS headquarters for Dec. 9. List of potential contributors and amounts which it is hoped they will contribute remains as in Cirtel 535.3

Meeting should be unpublicized.

All of foregoing discussed with Jacobsson and Ferras prior departure latter for Belgrade.

For London. Inform Pitblado of substance of foregoing, adding that in Jacobsson’s view discussion of report by Executive Directors of Fund not necessary prior Basle meeting and emphasizing that original report already transmitted to governments. (Pitblado apparently under impression report not transmitted). Embassy may recall that Pitblado stated during Dillon visit that UK ready for meeting at any time.4

For Bonn. Inform van Scherpenberg of approach we making to Italians, pointing to urgency of situation and expressing hope that in light assurances given Dillon Germans will be ready in time for Dec. 9 meeting.

For Belgrade. Inform Ferras that this message has been sent and summarize contents. Also inform Yugoslavs that efforts are being made to arrange Dec. 9 meeting and indicate target figures and contributors. In presenting figures avoid impression these decided upon by U.S. or Jacobsson. Rather should be presented as estimates maximum likely contributions apparent from conversations with officials interested countries.

  1. Source: Department of State, Central Files, 868.131/11–2960. Official Use Only; Priority. Drafted by Leddy and approved by Dillon. Repeated to Belgrade, Bonn, London, Paris, Bern, Stockholm, The Hague, and Vienna.
  2. Dillon met with Brentano and Blessing in Bonn on November 21. The Germans agreed that Yugoslavia should be aided but indicated that the existing break in formal diplomatic relations made it difficult for Germany to find a means of supplying aid. A memorandum of this conversation is Ibid., Conference Files: Lot 64 D 559, CF 1781.
  3. Dillon discussed Yugoslav aid with Couve de Murville on November 24. The Under Secretary of State brought up the same subject in separate meetings with Lord Home and Lloyd on November 25. Memoranda of these conversations are ibid.
  4. Not printed.
  5. Pitblado was present during Dillon’s November 25 meeting with Lloyd and apparently made the comment at that time. The comment, however, does not appear in any of the memoranda of conversation. The memoranda of these conversations are in Department of State, Conference Files: Lot 64 D 559, CF 1781.