105. Telegram From the Department of State to the Embassy in Yugoslavia0

468. Embtels 614, 617; Deptel 449.1 We believe Secretary’s press statement on Yugoslavia October 182 and Kohler’s conversation with Ambassador Nikezic October 19 provide initial response to Todorovic’s approach re our views on US-Yugoslav relations.

Pursuant urtel 617 Department called in Nikezic for meeting with Kohler. Following is summary conversation:

Kohler indicated that as Yugoslav Government aware considerable disappointment has prevailed in official US circles as well as in general public as result Tito speech and Yugoslav role Belgrade Conference non-aligned countries. Current press attacks on our Yugoslav policy in part symptomatic that disappointment. However, drawing unfounded [Page 221] conclusions re this policy from press stories, many of which incorrect or distorted, could be misleading and damaging to US-Yugoslav relations. Kohler noted this connection importance of Secretary’s October 18 press statement as well as President’s remark October 11 that US aid policy aimed at helping countries maintain their independence and sovereignty.3 We wished to make clear that, contrary Todorovic’s inference in his conversation with Ambassador, we have taken no action to hinder economic cooperation (Embtel 614). On contrary, we have encouraged private individuals, banks and corporations to go ahead with their arrangements. Todorovic misunderstanding this point example how premature and erroneous conclusions, if made public, could create type of climate harmful to trade which Yugoslav Government seeking to avoid. We desire normal relations and hope for realistic understanding on part Yugoslav Government to contribute to that end. Patience and tact required now and we hope that we can count on Yugoslav Government to avoid ill considered and inflammatory statements which might exacerbate situation further.

Nikezic said he understood need for caution and tact and appreciated both Secretary’s and President’s statements. Embassy felt, although press stories were to some extent evidence reaction administration re Tito speech Belgrade Conference, press had exaggerated administration’s true feelings. However, President’s personal reaction to Belgrade Conference, and Nikezic’s conversations with Bowles, Ball4 and others during which he had been told US evaluating implications Yugoslavia’s role there raised questions at Belgrade re our real attitude toward Yugoslavia. For this reason Todorovic had to seek clarification US policy. US economic cooperation highly important to Yugoslavia. Plans for coming period now being drawn up and Government must know where it stands. Impression that US changing policy reinforced when Ambassador Kennan told Todorovic that economic arrangements prevailing between Yugoslavia and US already ripe for modification and that he would have been obliged to suggest certain changes in these arrangements even without present troubled period. Asked what likely to be practical effect of present situation re Yugoslav requests (PL 480, DLF and Exim Bank). Kohler replied press stories re US attitude on PL 480 shipments unfounded. Yugoslavia’s recent request not yet having been reviewed. We were now undertaking consideration of this request within US Government. US review aid programs always comes up about this time as we weigh resources available [Page 222] against requests from different countries. Yugoslavs must realize that US faced with many new demands for aid, particularly from countries far less developed than Yugoslavia. It not possible now give any indications final US aid program outcome. After all factors weighed and decision made reply would be forthcoming through normal channels. Nikezic said he had already advised Belgrade of problem of increased competition for US aid dollar.

Special effort made in this conversation to urge Yugoslavs to avoid public statements and actions which might exacerbate further US-Yugoslav relations.

Department now studying recommendations urtel 617 re economic aid. Pending review our economic program Yugoslavia (Deptel 449) we are not yet in position to make more specific comments to Yugoslavs on this subject.

  1. Source: Department of State, Central Files, 611.68/10–1361. Confidential; Priority. Drafted by Mudd, cleared by S/S, and approved by Kohler.
  2. Telegram 614 is printed as Document 104. Regarding telegram 617, see footnote 4 thereto. In telegram 449, October 14, the Department of State informed the Embassies in Belgrade and Warsaw that the President had suspended issuance of export licenses to Yugoslavia and Poland and had instructed the Secretary of State to review all types of economic assistance to the two nations. (Department of State, Central Files, 411.6841/10–1461)
  3. For text, see Department of State Bulletin, November 6, 1961, p. 750.
  4. For text, see Public Papers of the Presidents of the United States: John F. Kennedy, 1961, p. 661.
  5. A memorandum of the September 22 BowlesNikezic conversation is in Department of State, Central Files, 396.1–BE/9–2261. No record of a September 8 conversation with Nikezic has been found.