Office of the Historian

129. Memorandum of Conversation0

Washington, June 12, 1962.

SUBJECT

  • Call of the Yugoslav Ambassador

PARTICIPANTS

  • Mr. Marko Nikezic, Yugoslav Ambassador
  • The Secretary
  • Mr. Julius L. Katz, EE

The Ambassador said that he had requested this appointment on instruction of his Government to obtain the Secretary’s evaluation of the situation arising from the Senate’s action to deny further aid to Yugoslavia.1 As a result of the recent visit of Foreign Secretary Popovic, there was full understanding in Belgrade that this action was contrary to the wishes of the Administration. Moreover, Belgrade had been heartened by the prompt and vigorous reaction of the Administration and important segments of the US press. Nevertheless, the Ambassador said, there was great anxiety in Yugoslavia. Denial of US aid, particularly at a time when the Yugoslav economy was in serious difficulty would be a severe blow. The amendment restoring PL 480 was, of course, very important but the inability to obtain development loans would be very serious for Yugoslavia’s investment program. Finally, the Ambassador said, the Senate’s action on aid following upon the House action on MFN had created uncertainty about the future direction of our relations.

The Secretary stated that he would wish to make the following comments:

1.
The attitude of the Executive Branch was clearly reflected in the legislation it had presented to the Congress. This legislation did not, of course, contain restrictive provisions.
2.
The Congressional moves on MFN and Aid were contrary to the position of the Administration. Moreover the vote in support of the Lausche amendment was larger than what would be an accurate reflection of the true attitude of the Senate. A number of Senators switched their votes in favor when it was clear the amendment would pass. It should also be noted that some Senators were voting their anti-aid views rather than anti-Yugoslav or anti-Polish views per se.
3.
The Senate vote came as a surprise to the Administration. But the Administration immediately went to work to get a reversal of the [Page 274] amendment to the extent possible. The result of the Administration’s effort so far was the Mansfield–Dirksen amendment restoring authority with respect to PL 480.
4.
The Administration would continue to work for improvement of both the Aid and Trade legislation but it was impossible now to know what would be the final result. The Secretary proceeded to describe in some detail the complicated and delicate parliamentary situation at this stage of the legislative session in an election year.
5.
Whatever the final results of legislation, the Administration would seek to limit the effects to the programs legally affected. In other words, while US technical assistance might be precluded, it would not affect our support for UN technical assistance. Nor would it affect our support for Yugoslavia in the OECD and other international organizations.

The Secretary concluded his remarks by stating that he did not wish to mislead the Ambassador into over-optimism. He did, however, wish to assure him of the Administration’s position.

The Ambassador expressed appreciation for the Secretary’s comments and indicated he would reassure Belgrade of the Administration’s intention to work for improvement in the pending legislation and at any event to seek to limit its effects.

  1. Source: Department of State, Central Files, 611.68/6–1262. Confidential. Drafted by Katz and approved in S on June 18.↩
  2. See Document 130.↩