119. Telegram From the Embassy in Yugoslavia to the Department of State0
1044. Embtel 1043.1 I had impression tenor of my statement to Popovic had been pretty well anticipated by Yugoslavs: that they have grasped fact that country of their political orientation can hardly expect remain major recipient of US aid in present circumstances; that Tito is nevertheless determined to persist in placing higher value on political relationship with Soviet bloc than on that with Western countries; that they realize this will necessitate greater effort to obtain development capital from bloc sources if rate of growth is to be maintained; and that they are prepared if necessary to pay reasonable political price, though not an inordinate one, to achieve this. This does of course present certain risks from our standpoint, but only such as are to be expected in face of what appears to be growing difficulty of obtaining long-term developmental capital from Western sources. That such capital will be available from the East on suitable terms and in adequate amounts is, of course, so far as we know, also far from certain.