Foreign Relations of the United States, 1961–1963, Volume XVI, Eastern Europe; Cyprus; Greece; Turkey

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

Belgrade, September 15, 1961, 7 p.m.

493. This is part two of report on Yugoslav attitude at Belgrade conference (Embtel 485, September 13).¹

Problem of our reaction to recent Yugoslav stance and behavior at conference is highly complicated and affected by contradictory considerations. There is evidence sudden distortion of Yugoslav policy at conference in direction pro-Soviet positions did not have approval all elements within GOY. Suspect it was even opposed by certain members Yugoslav delegation at conference, among whom its main protagonist would probably have been Djerdja, possibly also Kardelj. Others must have argued such line would involve serious risk of affecting our attitude toward Yugoslavia. If therefore we fail to react in any way we let down not only ourselves but those here who have argued that such course would not be in Yugoslav interests and would have unfavorable consequences.

On other hand any abrupt or petulant reaction would be vulnerable to distortion by regime and would be used to stir up feeling against US of otherwise strongly friendly Yugoslav public. There is also danger, if reaction affects aid, that we do things counter to basic purposes our aid programs, and ones that would stand out as unjustified in light our practices elsewhere. We have also to consider carefully effect of our reaction on other non-aligned nations and other aid recipients.

General character of Yugoslav positions on world affairs, as revealed at conference, was largely taken into account on recommendations made by this mission in despatch 41, July 20, on our future aid program.² However, for reasons set forth part one of present report, we are faced in part with new situation. Previous recommendations must be reviewed in this light. Following are my views this respect:

A. Only forms of purely grant aid we are now giving are technical assistance program and support to programs of private American charitable organizations. I suggest that technical assistance program, instead of being tapered off as previously recommended, be terminated at once in sense that we decline as a general rule to negotiate further TA contracts. Those already negotiated should be faithfully completed. We should not bar possibility that we might occasionally conclude further contracts this nature in exceptional circumstances but none should be concluded this fall and Yugoslavs should be given impression none are forthcoming. They should also be told this will involve drastic reduction USOM personnel.

This step can be easily defended in light of Tito’s own remarks about technical assistance in his speech of September 3 at conference. He himself said that while bilateral arrangements should not be totally excluded, TA embraced number of negative elements, “such as rivalry, interference in internal affairs, the imposing of influence and the like,” and sometimes did more harm than good. He referred it should be channeled, in general, through international organizations. This decision will not of itself hit Yugoslavs hard, either financially or otherwise. Curtailment of USOM will however have sharp psychological effect on Yugoslav public.

As for private organizations, I again recommend these programs be given very careful study at home and unless we are sure they have strong people-to-people value, which I cannot say of school milk program, they be terminated at once.

B. PL 480.³ As Department is aware this Yugoslav harvest was unsatisfactory both in wheat and corn. We have already made beginning at covering shortfall by shipment 300,000 tons wheat under PL 480 contract signed in June. To maintain adequate supply and three months advance reserves of bread grains, Yugoslavs will presumably require from US another 700,000–800,000 tons before end of next July. They expect US to undertake negotiations within coming month.

How much this poor crop was attributable to weather and how much to other causes cannot be determined with precision. Yugoslav leaders, especially Tito himself, seem to have given scant attention to their own internal economic problems during current year as compared with their feverish preoccupation with development their relations with Africa. They have apparently relied on us to pick up check for deficits on agricultural front while immersing themselves in foreign policy ventures often strongly anti-Western and anti-American in spirit.

Unjust and undesirable as this situation is, over long run, we must admit they had some reason for underlying assumption we would make up difference. They had no reason to suppose PL 480 aid would not continue to be forthcoming in adequate amounts. Were we to cut off shipments entirely with termination existing contract, there would be nothing they could do to improve their food supply by their own efforts earlier than next July. Result would be either heavy inroads on their foreign exchange reserves or genuine hardship to Yugo people. This being so, feel we should conclude one more contract to carry them over coming winter and most of spring, though not to point of meeting their demands in toto, but should couple expression of readiness to take this step with public statement that this represents, so far as our present intentions are concerned, terminal grant on present PL 480 terms, and that new basis will have to be found for further shipments of American surplus food. Exact amount such terminal grant can be determined by experts; I would suppose it would be in range of 3 to 400,000 tons. This would put them on notice at early date that they will be on their own next summer and that it is up to them to see to it their harvest is reasonably adequate. I actually think this necessity will prove to be in their own interests. It does not preclude a change of heart on our part next year if circumstances at that time seem to warrant it.

C. See no reason to restrict developmental financing by DLF beyond what was envisaged in my despatch 41.

On straight political level I would urge coordinated effort by all who deal with Yugo officials, whether here or in Washington, at UN or in other international forums, to give impression we feel they have chosen their road; it is not truly neutral one; they chose it knowing it was at many points in conflict with ours and with interests of their relations with West; that we have no choice but to go on our own way, expecting little from them; and that we cannot undertake to discuss world problems with them on assumption that they are entirely a friendly or neutral nation. General tone our statements to them should be one of sorrow rather than anger but of acceptance of situation they themselves have created.

This does not imply any personal coldness towards Yugoslav officials. Particularly those who are in our country, whether temporarily or for longer periods, should be treated as guests and shown every cordiality and consideration.

Part three this message will follow tomorrow or as soon thereafter as possible.⁴

Kennan

0. Source: Department of State, Central Files, 396.1–BE/9–1561. Confidential.
1. In the first part of his report, Kennan analyzed Yugoslav comportment during the Belgrade Conference and its possible causes. (Ibid., 396.1–BE/9–1361)
2. Despatch 41 reviewed MSP programs in Yugoslavia. (Ibid., 768.5–MSP/7–2061)
3. Formally titled the Agricultural Trade Development and Assistance Act, enacted July 10, 1954. For text, see 68 Stat. 454.
4. In part three of his report, transmitted as telegram 507 from Belgrade, September 19, Kennan made suggestions for a “tactical program” to make clear to the Tito regime U.S. displeasure with Yugoslav policy. (Department of State, Central Files, 396.1–BE/9–1861)