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 You are in: Under Secretary for Public Diplomacy and Public Affairs > Bureau of Public Affairs > Bureau of Public Affairs: Office of the Historian > Foreign Relations of the United States > Kennedy Administration > Volume XVI
Foreign Relations, 1961-1963, Volume XVI, Eastern Europe; Cyprus; Greece; Turkey
Released by the Office of the Historian

Yugoslavia


88. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.11/2 - 761. Confidential; Priority. Repeated to Moscow, Cairo, and USUN.
March 7 and presented his credentials on May 16. Rankin left post on April 22.

Belgrade, February 7, 1961, 6 p.m.

581. Reference: Department telegram 494./1/ Saw President Tito today in what I told him probably was my farewell call./2/ (He expects leave by ship in few days to reach Ghana February 28 followed by visit to Togo, Liberia, Guinea, Morocco and Tunis. Detailed itinerary to be made public in day or two.)

/1/Telegram 494, February 3, instructed Rankin to use the occasion of his meeting with Tito to inform him of U.S. positions on African affairs and indicate an interest in having Tito's observations and impressions upon his return from an upcoming African tour. (Ibid., 768.11/2 - 361)

/2/On January 23, President Kennedy announced his intention to nominate George F. Kennan as Ambassador to Yugoslavia. Kennan was confirmed by the Senate on March 7 and presented his creditials on May 16. Rankin left post on April 22.

I conveyed message re US African policy included in reftel and in view its length I left text with him. Tito seemed pleased with message and indicated general agreement, although he wanted to study it further.

Re general situation in Africa Tito fully approved United States attitude. On Algeria he agreed self-determination only solution and offered no objection to US policy as stated. Congo he believed should be unified under government chosen by Congolese people. To this end United Nations mandate should be strengthened and all assistance given through UNO channels. (He made no specific reference to Secretary General's military proposal or to Hammarskjold personally.)/3/ Lumumba must be released but Tito said Congolese should determine who is to head their government.

/3/On January 26, Hammarskjold appealed to the African nations to provide forces to replace 5,700 troops being withdrawn by 5 governments from the U.N. peacekeeping mission in the Congo.

Tito assured me of his intention to help compose difficulties rather than increase tension during his trip. Of course he must speak out against colonialism but he would not attack any particular state. Moreover Congo and similar countries were too primitive and backward to justify trying persuade them accept any particular ideology. They needed economic aid and technical assistance from more advanced countries, particularly US, but Yugoslavia could make modest contribution also.

Asked if he could comment on recent visits to Yugoslavia of Sekou Toure and Ayub Khan, Tito spoke highly of former. He had been much impressed by Guinean's grasp of world problems and was certain he would maintain his country's full independence and right to follow its own course. He admitted some differences of opinion with Pakistan but was gratified at extent of agreement reached in drafting joint communique. Tito had heard Indian and Afghan positions and was glad to get that of Pakistan.

Tito then volunteered admission that Yugoslavia had been more critical of US and West in general than of Soviet bloc. He suggested the criticism of the West had slackened recently and that further improvement might be expected. Yugoslav differences with West were specific and practical, he said, while with Soviet Union they were ideological. Further than that he said he would not discuss reasons why Yugoslavia was more reticent in dealing with the East.

Finally Tito told me that as outcome of talk with Khrushchev in New York and subsequent exchanges, Foreign Secretary Koca Popovic would visit Moscow in spring and Gromyko would come to Belgrade. He observed that press doubtless would try attach exaggerated importance to this exchange. Actually, it was clearly understood that ideological issues would not be discussed; only practical matters. But Tito thought we should have advance notice of this. He wished our governments could consult each other more frequently in advance.

Comment: Tito appeared in excellent health and as affable as I ever saw him. His decision on all points was most reasonable. However I still have misgivings about this African trip, since past experience suggests his statements and actions there likely to be influenced by considerations other than concern for welfare of Africans. We may hope Department's message will have salutory effect.

Memorandum of conversation follows./4/

/4/Transmitted in despatch 534 from Belgrade, February 8. (Department of State, Central Files, 768.11/2 - 861)

Rankin

89. Memorandum of Conversation

//Source: Department of State, Central Files, 611.68/3 - 2261. Secret; Limited Distribution. Drafted and approved by Kennan.

Washington, March 22, 1961.

SUBJECT

Call on the President

PARTICIPANTS

The President

George F. Kennan, American Ambassador to Yugoslavia

I made yesterday my routine farewell call on the President. The Secretary of State came in while I was there and I remained, at the President's request, throughout the Secretary's visit. Most of the talk concerned Laos and other matters not directly connected with Yugoslavia. At one point, however, we did talk briefly on Yugoslav matters.

The President asked me how I felt about the present situation and policies of the Yugoslav Government. I told him that the attitude the Yugoslavs were adopting did not seem to me to be entirely satisfactory from our standpoint; that they were getting the bulk of their economic and financial aid from us and yet they seemed to be supporting the Soviet position on almost every important issue in world affairs ulterior to their own bilateral relations with the Soviet Union; that while I thought it not out of the question that this could be, to some extent, corrected under the present leadership, and would of course have this in mind when I went to Belgrade, I feared that Tito and his leading associates were too deeply affected by their early Communist training to be able to get away from it entirely: that they would always be sensitive to the charge that they were becoming tools of the imperialists, and would always lean somewhat to the Communist side in world affairs as a means of salving their Communist consciences. For this reason, I thought it best for us to direct our principal hopes to the second generation of Yugoslav leaders, particularly the younger people in the echelon just under the top. I thought for various reasons that these people might be more amenable to an understanding of our point of view and less fearful of appearing to have normal and intimate relations with us.

The President asked me what I thought about a visit of Tito to this country./1/ I said that this was obviously a very important question and one on which, again, I would like first to have the opportunity of getting the feel of things in Belgrade before making any recommendations. In principle, I approved of the idea of inviting Tito, but I wanted to make sure that this was done under the most favorable circumstances, and that it would produce some favorable effect of a tangible nature on US-Yugoslav relations.

/1/According to a March 3 memorandum, President Kennedy had broached the subject of a meeting with Tito during a discussion with Secretary Rusk that day and asked for the Secretary's recommendation. (Memorandum from McGhee to Rusk, March 3; Kennedy Library, National Security Files, Yugoslavia) No other record of the conversation was found. Ambassador Kennan endorsed the idea of a Tito visit in telegram 1487 from Belgrade, May 8. (Department of State, Central Files, 768.11/5 - 862) On May 11, Acting Secretary of State Bowles recommended inviting Tito to visit the United States. (Memorandum from Bowles to President Kennedy, May 11; ibid., 768.11/5 - 1161)

Incidentally, when I was leaving the White House a reporter, I believe from the U.S. News and World Report, pursued me to my car and asked me for background on what I thought about the prospect of Tito's visiting this country. I said that I had no views that I could state on this matter at the present time, though I did not think that the possibility of such a visit at some future date ought to be excluded.

George F. Kennan

90. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.11/5 - 1361. Secret; Niact; Limit Distribution.

Belgrade, May 13, 1961, 7 p.m.

909. I recognize the force of the considerations mentioned in Deptel 766,/1/ and agree that it would be unfortunate if in the wake of extension of such an invitation US-Yugoslav relations were to suffer drastic setback as result of failure to find solution to Press Law problem. Although I am still hopeful that at least an interim solution can be found, Thursday's meeting certainly brought US no closer to agreement. On the other hand, it would be equally unfortunate if Tito were to be left with initial impression that change of administrations at home had brought no change whatsoever in what he probably regarded, rightly or wrongly, as inhospitable attitude in Washington with relation to his own person. This might, in fact, even affect unfavorably the Yugoslav position in the Press Law question.

/1/Telegram 766, May 12, noted that the Yugoslav Press Law and its ``hard-line" negotiating position might necessitate a drastic reduction in USIS operations with a resulting impact on plans to invite Tito to the United States. The Department of State requested Kennan's analysis. (Ibid., 768.11/5 - 1061)

I propose, therefore, unless Department voices objection, to indicate to Tito, on occasion of presentation credentials, that I hope at early date to have opportunity to discuss with him various questions of world affairs and of US-Yugo relations, but this perhaps not best occasion, and that unfortunately I have found myself much preoccupied since arrival by the problems imposed by the Press Law, which are urgent in view of early deadline imposed by entry into effect of law on June 9.

If Tito accepts this statement, I would hope to delay further discussions along this line until Press Law question has been clarified.

Should he himself, however, contrary to expectations, raise question of visit or exchange of visits, then I think any show of hesitation or lack of instruction on my part would be unfortunate and I should say at once that this was subject President Kennedy had much on his mind; that I had discussed it with him; that it was one of the matters I had hoped to discuss with him on a more suitable occasion; that I could tell him the President definitely hoped that such a visit by Tito could be arranged but it was a question of timing--the President's present schedule would scarcely allow of such a visit being fitted in during the current year.

In absence of instructions to the contrary, I shall be guided by above when I see Tito on Tuesday, 16th./2/ Presentation credentials now set for 9:00 AM that day. Am leaving Belgrade by air for Brioni at 2:00 PM Monday afternoon./3/

/2/In telegram 774, May 14, the Department of State approved the procedures Kennan suggested and outlined alternative scenarios for a Tito visit. (Ibid., 768.11/5 - 1461)

/3/Kennan transmitted the gist of Tito's comments at his credentials ceremony in telegram 921 from Belgrade, May 16. (Ibid., 768.11/5 - 1661) In telegram 922, May 16, Kennan reported that he and Tito had agreed to a more substantive meeting in the near future and that he hoped that this would provide sufficient time to clear up the Press Law issue and extend an invitation for a Tito visit. (Ibid.)

Kennan

91. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.61/6 - 861. Limited Official Use.

Belgrade, June 8, 1961, 6 p.m.

1012. Called on Tito this morning to brief him on Vienna meeting./1/ Only other person present at interview was Tito's new political secretary, Crnobranja.

/1/Reference is to President Kennedy's June 2 - 4 summit meeting with Soviet Chairman Khrushchev.

Gave briefing orally and in rough summary. Tito seemed pleased and appreciative that I had done this. He made no substantive comment other than that the Soviet position on tripartite organization of United Nations Secretariat and control organization for weapons testing inspection with veto provision was also quite unacceptable to Yugoslavs. It appeared to assume, he indicated, some sort of neutral bloc capable of acting as a body, and this did not exist. His general reaction to what I told him of results of Vienna was that meeting was useful first step and it was to be hoped that both governments would now review their own positions carefully with view to seeing whether mutual concessions could not be made. He felt that if only one of the great problems could be solved this would itself be of great usefulness in improving atmosphere for further agreements.

Before leaving I drew his attention to fact that final session of Press Law talks was now in progress and that I had authorized Lisle, in event of continued disagreement, to present note announcing closure of reading rooms. He immediately said this must not happen, that there was no reason why our reading rooms could not continue their activities in manner wholly satisfactory to us. Yugoslav intent had not been to make any serious difficulties. He was prepared to give me his personal assurance that if agreement could be reached among our negotiators today every liberality would be shown in treatment of reading rooms. I told him that I had just received messages authorizing our negotiators to make substantial concessions this morning,/2/ and that I hoped reciprocal concessions would be made on the Yugoslav side. He said he would personally intervene at once in matter. Before leaving I spoke of uneasiness evidenced by some of our local employees over their personal position vis-a-vis Yugoslav authorities as they attempt to carry out their functions as employees our government, and said I hoped it would be possible to find means of reassuring them that Yugoslav Government saw no conflict between this work and their status as loyal Yugoslav citizens. I asked that any doubts or questions Yugoslav Government might have as to propriety of their actions be brought first to my attention and not to theirs, and to this he assented./3/

/2/Telegram 852 to Belgrade, June 8, authorized Kennan to seek assurances ``outside of the memorandum" regarding the treatment of U.S. reading rooms. (Department of State, Central Files, 611.685/6 - 361)

/3/An agreement on USIS facilities in Belgrade, signed on June 14, provisionally entered into force the same day, and definitively entered into force on December 28 following ratification by the Yugoslav Parliament. For text, see 20 UST 2826.

Kennan

92. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.11/7 - 361. Secret; Limit Distribution.

Belgrade, July 3, 1961, 11 a.m.

5. Deptel 901./1/ In view Tito's illness and prospective long absence from Belgrade (he is now in Brioni) and of fact Foreign Minister Koca Popovic will be here very little before his departure for Moscow July 7, I took advantage of casual meeting with Popovic Friday night to tell him that President Kennedy would welcome visit from Tito in coming period but that President's program was such it would permit only a working visit in 61, at time to be mutually arranged, whereas State visit could take place only some time in 62. I said I realized that in view President's illness he might not wish to make any decision on this at present moment, but that I was at his disposal at any time to receive any reply he might wish to make or to discuss timing and nature of such a visit. Popovic said that while he would not try to anticipate President's reaction he knew he would be moved and gratified by knowledge that President Kennedy wished him to come.

/1/Telegram 901, June 20, informed the Embassy that settlement of the Press Law controversy opened the way for issuing an invitation to Tito for a U.S. visit. (Ibid., 768.11/6 - 2061)

I said that for the present, and pending the President's reply, we thought it best to say nothing about this publicly, and he indicated strong assent.

I took occasion to emphasize to Popovic that this invitation was extended gladly and in all cordiality, that it was a matter to which careful thought had been given at home, and that if President Tito decided to come, I could assure him every effort would be made to make visit a pleasant and profitable one. I had the impression that Popovic was himself greatly pleased.

Kennan

93. Memorandum of Conversation

//Source: Department of State, Central Files, 768.11/7 - 1961. Confidential. Drafted by Kennan. Transmitted as an enclosure to despatch 39 from Belgrade, July 19.

Brioni, July 17, 1961.

SUBJECT

World affairs; visit to Brazil; Belgrade conference

PARTICIPANTS

Jozip Broz Tito, President of Yugoslavia

George F. Kennan, American Ambassador

I visited President Tito this morning and talked with him for an hour and a quarter. It was the most informal and relaxed of the talks I have had with him. The only others in attendance were the Foreign Minister, Koca Popovic, and the President's personal secretary, Bogdan Crnobrnja. The President began by speaking Russian, and we continued in this language throughout the discussion.

An initial question by the President about my progress in the study of the Serbo-Croatian language led us, by stages, to the subject of his recent speech at Titovo Uzice. The mention of this event brought us to the subject of the partisan warfare he had conducted from 1941 to 1945. The President seemed to enjoy the subject, and it detained us for some twenty minutes.

Turning to his present plans, he said that he expected to visit Brazil at some time during the current year, but did not yet know exactly when it would be. He thought Brazil was a very important country. He hoped we in the United States would be able to adjust our own relationship to Brazil in a constructive and satisfactory manner.

Talk turned on Brazil's participation in the forthcoming Belgrade conference./1/ I explained to him the nature of Cabot's interview/2/ and told him that our Government had taken no position pro or con on the subject of the participation of other nations in the conference. He then inquired my personal opinion about the participation of Latin American nations. I said that this suggestion naturally raised some delicate questions. I personally thought that if it were a case of several Latin American nations, the significance attached to it would be less than if it were just one or two; but I emphasized again that my Government had carefully refrained from giving any advice to anyone, one way or another. He said that Yugoslavia would be very unhappy if Cuba turned out to be the only Latin American country to be represented.

/1/The Belgrade Conference of Non-Aligned States September 1 - 6.

/2/In a July 11 statement in response to a reporter's question about Brazilian participation in the Belgrade Conference, Ambassador to Brazil John M. Cabot stated that Brazil could not be an ``uncommitted nation."

He asked me how I felt about the conference, generally. I said that we took a very calm view of it. We knew that there would be some extremist voices there. On the other hand, we were confident that Yugoslavia would use her influence in the direction of moderation, and we knew that she would not be the only one. To this, President Tito agreed; but he said the greater the number of the moderate countries represented, the easier it would be for Yugoslavia. He stressed, emphatically and at considerable length, that Yugoslavia had no desire that the conference should in any way exacerbate international relations: on the contrary, he deeply hoped that its role would be to help the great powers find solutions to their problems. The question had been raised, he said, as to whether they were not preempting the role of the United Nations in holding such a conference. He felt that this was not at all the case -- that they were merely acting to increase the usefulness of the voice which the unaligned nations could have at the forthcoming United Nations session.

I then took the liberty of saying that I had now been here two and a half months and had had some opportunity to acquaint myself with conditions in Yugoslavia. The impression I had, after this experience, was one of growing admiration for the country and the people and of a very strong feeling that our two peoples ought, by all criteria of temperament and character, to be the best of friends. On the other hand I had become increasingly aware of the depths of some of the ideological differences, and the differences of outlook on world problems, which divided us.

This led to the subject of world affairs. The President said that their view on Germany was similar but not identical with that of the Russians. They knew the Germans well. They had suffered from them. They did not trust them. They continued to regret deeply the rearming of Western Germany. They recognized that this had occurred within the framework of NATO and was, therefore, not an immediate danger. But they were skeptical about the future. Some day the Germans would turn on NATO with the very arms NATO had given them. For this reason, they firmly favored a divided Germany. They made no bones about this. They did not want to see the country united. They did not want to see the military resources of Eastern Germany added to those of Western Germany. This meant that they had no choice but to support the Russian bid for recognition of the East German regime. They were sorry if this inconvenienced us; foreign policy was something one had to be consistent about.

I told him that I thought it was a very serious mistake of the Russians to try to portray the Adenauer regime as a Hitlerite regime, and emphasized my reasons for feeling that this was utterly misconceived. I mentioned the special feelings we have about the people of West Berlin, told him of my own five years of residence there and of how I had known them personally during the war as the least Nazi of all the German people, reminded him of the way they had stood by us during the Berlin blockade, and explained that we could not let them down. He replied that this was all very well, but he did not see, in this case, what prevented us from sitting down at a table with the Russians and talking the matter over. I pointed out that an atmosphere had arisen in which even the suggestion of negotiation with the Russians about Berlin smacked to many people of compromise and appeasement a la Munich. He said that the parallel was wholly misconceived. He thought, in fact, that we had been very unwise to heighten the atmosphere of military tension by talking about our military plans. He could understand that we might wish to take military measures, but he could see no reason why these measures should have been publicly advertised. Things were bad enough as it was.

We then spoke about the colonial problem and Africa. Much of what he had said, I had heard before. He spoke, this time, with great feeling. He said we Americans were always too late. The process of the disintegration of colonialism was marching with tremendous speed; no one could stop it; if there was not a prompt and adequate response, this could be very dangerous--dangerous for everyone, for us and even for them, the Yugoslavs. There was even a danger that they, too, would be too late. He asked us to bear this in mind when we judged Yugoslav policies toward Africa. They were trying to avoid this mistake.

I said that I thought we were doing all we could. In reply he mentioned Guinea. Here, he said (rather obliquely), was a place where we had a real chance of building a constructive relationship. I said I thought we had been giving aid to a number of African countries, including Ghana and Guinea. At the mention of Ghana, he shrugged his shoulders, indicating that was a special case. (I gathered that he thought Ghana was largely out of control and beyond influencing.) But much could still be done with Guinea.


He thought we had made a mistake in supporting our NATO allies so extensively on such questions as Algeria, the Congo, and Angola. Since he seemed unaware that we had opposed the Portuguese publicly on the question of Angola, I took pains to point this out to him; but I am not sure how well it registered.

I said that I felt that considerable injustice had been done to us by the Yugoslavs in their view of what had occurred in the Congo. They seemed to suspect us of having inspired Mr. Hammarskjold to take positions in the Congo which were aimed at the preservation of the positions of the Belgians in that country. I could not imagine how they arrived at such a view; I was sure there was no substance to such suspicions.

To this Tito replied that it was true: they suspected Hammarskjold of acting in the interests of the Belgians and felt he had in many ways exceeded his authority. They also felt that our influence had played a part in bringing him to act in this manner. In general, Hammarskjold had taken much too much upon himself. He confessed that he could not warm to Hammarskjold personally--just didn't like him. They did not support Khrushchev's ``troika" principle in its present form, but they thought that a stricter control ought to be exercised over the activities of the Secretary General. The latter ought not to act as an independent political figure.

I ended the talk by saying that I thought we were entering on a very serious and critical time, and they and we ought to be extremely careful, in this coming period, to assure that, even if we could not see things identically, at least misunderstandings were ruled out to the maximum degree. In the differences we had, there was a strong element of ideological preconception, which would not be straightened out in any short time. But there were also, I thought, certain differences which rested on real misunderstanding, and could be cleared away by the recognition and acceptance of a common set of facts. I hoped, for this reason, that they would not hesitate to give me an opportunity for explanation if there was anything in our policy that raised particular doubts or misunderstanding./3/

/3/In telegram 52 from Belgrade, July 18, Kennan further reported: ``Tito in course of yesterday's conversation at Brioni expressed appreciation for invitation and said his schedule would permit a visit in 1962. I said we too thought this would be better and suggested we wait until end of this year before discussing details. It was agreed that nothing should be said publicly at this time about the matter. Remainder of discussion concerned views on world events, and will be reported by air priority despatch." (Department of State, Central Files, 768.11/7 - 1861)

/4/Immediately after meeting with Tito, Kennan met with Foreign Minister Popovic. Kennan expanded his presentation on U.S.-Yugoslav differences over international affairs. The memorandum of conversation of this meeting was also forwarded as an enclosure to despatch 39.

Comment.

President Tito did not appear to me to be as robust as I had seen him on previous occasions. His Chief of Protocol intimated to me that he had still not fully recovered from his recent illness. His appearance and manner seemed to me to bear out this statement.

I had the feeling that Popovic/4/ and Crnobrnja, who spoke very little during the interview, were watching me very attentively throughout the interview in an effort to discern what was my reaction to the President--to his manner and his statements. I have the impression that these men, and others of his close advisers, entertain feelings of deep affection and admiration for him. Though they realize that his physical powers are not quite what they were, they intensely hope that a person like myself will be discerning enough to see in him the qualities they see and to share some of their respect for him.

If they knew my real thoughts, they would not, I think, be disappointed. Tito is a very human sort of a figure. He is a tough old revolutionary, who has faced extraordinary trials and has survived them all with remarkable success. In many respects, he has the temperament of a born military-political leader, with all the attendant faults and virtues. When he makes a decision, he has the courage to stick to it. His judgments about people are rough and ready--not always right, but usually not without shrewdness. Once he has recognized someone as an enemy, he is ruthless and consistent in combatting him, though not vindictive. By the same token, he will not betray a friend; nor is he easily led to turn on anyone who has once given him loyalty and support within the movement. He can be crafty, where necessary, but he has none of Stalin's refined hypocrisy and cruelty.

He is, of course, still in part the victim of ideological misconceptions. He himself admitted in our conversation that he had once been an extremist himself: circumstances, he said, had required this, though perhaps he, too, had not been as fast as he should have been in seeing the writing on the wall and in making the change. His Marxist prejudices still confuse him; and the historical experience of his people renders him abnormally sensitive to any suggestion of the oppression of a smaller people by a larger one. But underneath all this, there lies an excellent, pragmatic political mind, not deeply philosophical, but exceptionally sensible and realistic. He has gained both stature and mellowness with the years.

In these circumstances, there is justification for the admiration and affection in which he is held by his younger associates; and those in the Western world who tend to regard him just another Gottwald or Gomulka, but one who happened to break loose from Moscow, are making a big mistake.

94. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 762.00/7 - 3161. Secret; Priority. Repeated to Nicosia.

Belgrade, July 31, 1961, 6 p.m.

115. Following message partially cleared with Bowles.

Under Secretary Bowles/1/ and I visited Brioni yesterday, talked for one and half hours with Tito, in company with Foreign Minister Koca Popovic and President's Secretary General Crnobrnja, and then lunched with Popovic, Crnobrnja and FEC member Vladimir Popovic, former ambassador to Washington, Moscow and Peking. Discussions were friendly and frank. They confirmed full depth of differences between Yugoslavs and ourselves, as revealed in previous exchanges; but we feel visit was useful and some progress made in dispelling misunderstandings.

/1/Bowles stopped in Belgrade on his way to the July 31 - August 2 regional conference of Chiefs of Mission in Nicosia.

Under Secretary Bowles explained in detail our position on Berlin, in particular reasons why we had long been obliged to take measures of military precautions. Points set forth Department telegram 58, July 26/2/ were all developed. It was pointed out that Berlin situation operated in many ways to impede or delay more constructive undertakings to which we would like now to turn in other parts of the world, and that any help Yugoslavs could give at forthcoming Belgrade conference to moderate Soviet stand on Berlin and to increase prospects for peaceful composition Berlin problem would facilitate our response to other world problems.

/2/Telegram 58 outlined the U.S. position on the German question. (Department of State, Central Files, 396.1 - BE/7 - 2161)

In general, Tito's observations followed course of previous discussions I have had with him. Following points deserve particular note:

1. While not denying Khrushchev's responsibility for producing Berlin situation, Yugoslavs earnestly plead that we, in interest of peace, make effort to sit down and talk over problem in constructive manner with Russians. They felt we had now adequately proved we were neither weak nor timid, and were convinced we had everything to gain and nothing to lose by such procedure. World would assuredly take it as a sign of strength and confidence rather than weakness. Though not denying depth of Ulbricht's political failure, they pleaded for recognition of GDR, feeling that this lay at heart of difficulty with Russians.

2. Under Secretary asked their view on Khrushchev's motives: Was he merely trying to tidy up situation around Berlin which had become dangerous and embarrassing to him, or was it his purpose to embarrass and weaken US. They replied unhesitatingly that everything in Koca Popovic's Moscow conversations had indicated the former and they were convinced this was the case. They recognized Khrushchev's impulsive nature and tendency to flamboyant, provocative statements, but considered that beneath it lay a cold and realistic political intelligence, and that he could be sober enough when it came to responsible negotiation.

3. They reiterated and stressed at length their strong feelings on colonial problem, emphasizing once again that this constituted their major difference with US. They thought we should have put greater pressure on the Portuguese and on French over their African problems. Tito stated frankly that he had never been able to understand our attachment to NATO pact overriding priority we gave its interests. He felt this, more than anything else, stood in way of our adoption of full hopeful and constructive policies in Africa.

4. It was clear that they strongly suspected US of having opposed participation of uncommitted nations in Belgrade conference, and were deeply affected and hurt by this impression. Failure to date of any moderate invitees to agree to attend has been serious blow to them. We assured them US Government, to our knowledge, had been careful to take no position on this matter, pro or con, and had made no representations or suggestions to any government one way or another; but I am not sure we convinced them. Koca Popovic said pointedly that whereas European neutrals had been sounded out informally, none had indicated a desire to attend. Yugos felt, it was inferred, that this could not have been the case had our attitude been other than unfavorable. The same applied, I gathered, in case of South American invitees. Nigeria, they told us, had now definitely declined to attend. They did not suspect US of having made direct representations to Nigerians, but they could only view Nigeria's answer in light of Sir Abubakar's presence in US at time it was given, and felt that position had clearly been taken in deference to American position.

In his reply to these various points, Under Secretary described recent developments of our African policy, noted particularly lack of political conditions on our aid as witnessed by their own experience and that of African governments highly critical of our policies which had, nevertheless, continued to receive our aid, and pointed out that to put pressure publicly on French with regard to North Africa would be to forfeit all real possibility of exercising moderating influence of them. He also traced effect of Korean War on development of NATO policies.

So much for discussion. Our impression is that Yugoslav positions at forthcoming Belgrade meeting will be importantly influenced, rightly or wrongly, by impressions they gain on following points:

A. Whether we, in meantime, have made forward effort at peaceful composition of Berlin problem on basis which takes some account of Soviet prestige and interests, and goes some distance to meet their feelings about GDR;

B. Whether we have been able to overcome their belief that we have influenced moderate countries against attending Belgrade conference;

C. Whether we have given further evidence of effort to restrain French and Portuguese in Africa.

They will be watching intently development of US policy in intervening period.

If nothing develops to give them encouragement on any of these lines, they will go into the conference with strongly negative and almost bitter feelings toward US, and disinclined to expend their influence to restrain the strongly anti-American tendencies which will certainly be represented among other delegations. In our opinion, there is not much more that can be done to alter this state of affairs by personal argument and pursuasion.

Both Under Secretary and I are convinced this state of mind reflects no personal anti-Americanism on part of present Yugoslav leaders, and no complaint arising out of our bilateral decisions, but flows rather from deep and honest disagreement about wisdom of certain our policies on world arena. On other hand, we feel Yugoslavs have it in their power to be distinctly helpful at Belgrade conference, and would in principle like to do so. They are visibly impressed with Under Secretary's reminder that if Berlin crisis could be surmounted this might be starting point for new and much hopeful era of world affairs. There can be no question of their present unhappiness or of their desire to contribute to such development if they can see their way clear to doing so./3/

/3/In telegram 116 from Belgrade, August 1, Kennan reiterated the concern he and Bowles felt about incorrect Yugoslav impressions of U.S. policy regarding the conference and outlined the principal points of a statement designed to promote comprehension. (Ibid., 396.1 - BE/8 - 161)

Kennan

95. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 396.1 - BE/8 - 3161. Secret; Niact.

Belgrade, August 31, 1961, 7 p.m.

328. Yesterday I sent personal note to Foreign Minister Koca Popovic informing him of my return to Belgrade and stating that while I was not requesting an appointment, I was at his disposal in case there was any information he required concerning views or policies of our government in light of forthcoming conference. I added an expression of my confidence that we could rely on maturity of Yugoslavian leaders to assure that so far as Yugoslavia was concerned, questions to be discussed at conference would be treated with the moderation and sense of responsibility which their gravity demanded.

He sent word later in the day that he wanted to see me and I called on him this morning. He said he appreciated delicacy of my communication, and thought it might be desirable that we have a talk at this point. I subsequently learned that he had arranged to receive, just after myself, the Foreign Ministers of all the participating conference delegations, for discussion of the Soviet announcement on resumption of tests./1/

/1/For text of the August 30 Soviet announcement, see Documents on Disarmament, 1961, pp. 348 - 350.

I told him that I took a very grave view of present situation, in light of Soviet measures in Berlin, their action in bringing up question of air corridors, and finally their announcement of nuclear test resumption. I pointed out we had made four major concessions this week in test talks; that Russians had obviously been disingenuous in stringing the discussions along in recent days; and that, if they suspected us of secretly conducting tests, they had had every opportunity to raise this question at Geneva. Said I was certain we would have welcomed impartial investigation. I pointed out great restraint with which we had reacted to resist Soviet measures in Berlin and heavy burden this had placed on our relations with West Berliners, also that Russians had shown no evidence of any desire to reciprocate this restraint and had seemingly done all in their power to render difficult, rather than facilitate, the peaceful composition of differences. I said that to my mind their conduct left room only for the gloomiest hypothesis as to their true motives.

Popovic made careful note of these observations and replied, though without much show of conviction, that GOY still did not believe the Soviet Government was deliberately steering toward war. He recognized it as out of the question that we had been secretly testing nuclear weapons and said this thesis would be given no credence in Belgrade. The Yugoslav Government, he said, had been aware for some days that Soviets had been preparing an announcement about tests. Tito had expressed to Soviet Ambassador when he received him yesterday morning at airport, misgivings with which Yugoslavs took note of evidence of Soviet intentions in this regard. He, Popovic, had not yet had time to discuss with other members of his government the effect of Soviet announcement. In general, their position remained that, while there was a connection between test ban talks and general disarmament, it was desirable that an agreement on tests be reached independently and as early as possible. They thought the weakest part of our position had been behavior of French. I gathered Soviets had played this hand to very good effect in their discussions with Yugoslavs, and that latter had found no very convincing counterargument to Soviet representations on this point.

Popovic then went on to say that they considered the immediate recall of Dean a mistake, and pleaded that we not respond to the Soviet announcement by ourselves announcing immediate resumption of tests but await evidences of actual Soviet testing before proceeding to this step. I told him our long patience in Geneva negotiations had already aroused much uneasiness in public opinion at home and said I thought it would be very difficult for President now to resist pressures for immediate resumption of testing, but would of course transmit his views.

I asked whether test ban question would be treated at forthcoming Belgrade Conference. He said even before Soviet announcement it was planned this question should be mentioned both in President Tito's opening address and in the draft declaration the Yugoslavs would put forward. What effect the last Soviet announcement would have on this, he was unable to say; but I gathered it certainly did not decrease likelihood that conference would address itself to this question.

I asked him about Germany and Berlin. He said we knew their views. They considered rearmament of Germany had been great mistake. They thought it high time recognition was accorded to Oder - Neisse boundary, which could certainly not be changed without war, and that existence of two Germanies was accepted. I gathered he was warning me of those particular elements in respective passage of Tito's forthcoming speech which will be disagreeable to us.

He asked me how I felt about events in Brazil./2/ I said I was completely confident we had had nothing to do with change of government. He laughingly said this time even Yugoslavs were convinced of this. I said I had no indication of views of my government on change itself. As I understood it, we had not always approved all of Quadros' actions and utterances, but we had never opposed his regime, and we had gone ahead with extensive plans in way of aid to Brazil on assumption he would continue to be in power. He said they did not regard this change as a development likely to stabilize the situation; on contrary they thought it beginning of long period of instability in Brazilian affairs.

/2/On August 25, President Janio Quadros of Brazil resigned after 7 months in office. The military members of his Cabinet unsuccessfully attempted to block the return to Brazil of Vice President Joao Goulart, his constitutionally-designated successor.

We spoke again of invitation to Latin American countries to attend Belgrade Conference. I reiterated my conviction that we had brought no pressure on anyone not to attend. Specifically, I had convinced myself in Washington we had had nothing to do with Nigerian decision despite fact it had been announced from Washington. He pointed out that decision of Brazilians not to send observer had just now been communicated to Yugoslavs through Brazilian Embassy in Washington though more direct facilities were fully available. He said even if the Yugoslav Government were prepared to believe we had nothing to do with this, people here would be unlikely to show a similar credulity.

I inquired his views on Congo. He said situation there was still so uncertain that Yugoslavs had been unwilling assume responsibility for inviting new Congolese Government to Belgrade Conference and had placed this question before preparatory committee, but no decision yet taken. Asked whether Yugoslavs were not pleased by recent UN action in Katanga, he said they suspected that this was cover for similar action against independent tendencies of Stanleyville, and were therefore reserving judgment.

He told me, somewhat wryly, message had just been received from Mao for Belgrade Conference. I asked him about President's message./3/ He was noncommittal but admitted under pressure that message had contained no negative note with regard to conference and had on contrary expressed hope for its usefulness.

/3/For text of President Kennedy's message, see Public Papers of the Presidents of the United States: John F. Kennedy, 1961, pp. 602 - 604.

So much for interview. Following is my own comment. While I realize we will presumably be obliged to resume tests at very early date, I think much would be gained if we could defer final announcement of such decision until Belgrade Conference is over. This would not prevent us from proceeding vigorously meanwhile with preparations for such testing as we feel it necessary to conduct. It would, however, leave Soviets holding bag for next few days and standing in their present position of having not only flaunted Tito's expressed plea not to take this step at this time but having made something approaching gesture of contempt for conference itself.

Kennan

96. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 396.1 - BE/9 - 361. Official Use Only. Repeated to Moscow.

Belgrade, September 3, 1961, 4 p.m.

377. Belgrade Conference. Tito's statements on Berlin and on Soviet resumption of tests came as deep disappointment to Western observers here, including myself. Passage on Berlin contains no word that could not have been written by Khrushchev; and that on testing, leading off with reproach to French and accepting in full Soviet explanations for resumption, is weaker and more pro-Soviet than even those of Nasser and Nkrumah./1/ Private information indicates Tito has been endeavoring behind scenes to play down issue of tests ever since beginning of conference, probably fearing it would adversely affect success of meeting.

/1/Excerpts and summaries of the statements at the Belgrade Conference were published in The New York Times, September 4, 1961.

I have repeatedly called attention to strong Yugoslav feelings over rearmament of Western Germany and their negative reaction to impression we have given of unwillingness to negotiate or at least to make any positive proposals for settlement of Berlin problem, as confirmed by Kohler to Nikezic on August 29 (see Deptel 254, September 1)./2/ But neither I nor any of my Western colleagues were prepared for so one-sided an attitude on Tito's part as this; and I think we must reflect carefully on its implications for our treatment of conference and, in more long-term, our attitude towards role of Yugoslavs at this juncture.

/2/Not printed. (Department of State, Central Files, 762.00/9 - 161)

I am stuck with Tito's expressed understanding that we are proposing to go to war over specific issue of signing of peace treaty itself and his evident failure to understand that our military interests could be actively engaged only if subsequent effect of treaty were to create intolerable limitations on Allied rights in Berlin or on freedom of city's communications. I recently urged, in conversation with Secretary,/3/ that we take steps to make plain that crucial issue in our eyes would not be signature of treaty itself but situation which would arise if attempt were made to give to treaty an interpretation and implementation which would affect these factors just mentioned. Would like now to repeat this recommendation. So long as we let stand present ambiguity on this score we will lead with our chin for line of reproach which Tito took in this respect.

/3/Apparently in a telephone conversation. The Rusk Appointment Books have no annotations indicating any conversations with Kennan and no record of any discussion has been found. (Johnson Library)

At conclusion Tito's speech I had occasion talk alone with Nehru during intermission. I expressed to him my shock over image conveyed by Tito of juxtaposition in Germany of stable East German state peacefully developing under happy socialist system, as against Western Germany seething with ``Fascist and revanchist conceptions and tendencies." Pointed out this was fantastic distortion of facts, and that no attempt by neutrals to play positive role in reaction to Berlin crisis could conceivably be successful if it ignored fact that heart of difficulty was incredible political failure of Ulbricht regime, which could not even stand comparison with other Communist regimes of Eastern Europe. This, I said, was problem not only for us but for Russians themselves, and no action of this conference based on fiction this problem did not exist could come anywhere near root of difficulty or have any particularly helpful effect. Nehru listened attentively but was non-committal. Private knowledge that same thesis was forcefully put to him this morning by personal envoy of Willi Brandt leads me to hope all this may have some effect on his thinking.

Archbishop Makarios' speech, which followed Tito's, was very constructive on Germany and nuclear testing, calling for reunification Germany on basis plebiscite and characterizing Soviet test resumption as ``shocking", while expressing concern over French nuclear tests in Africa.

It is unfortunately plain that if moderation and balance are to be brought into final resolutions of conference on Berlin question, the impulse will have to come from Nehru, Nasser, U Nu and others, not from Tito./4/

/4/In telegram 323, September 13, the Department of State provided Kennan with detailed instructions to use in his discussions with Yugoslav officials, which stressed U.S. disappointment with Tito's ``immoderate and pro-Soviet statements." (Department of State, Central Files, 396.1 - BE/9 - 1361)

Kennan

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

//Source: Department of State, Central Files, 396.1 - BE/9 - 1561. Confidential.

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/

/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)

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:

/2/Despatch 41 reviewed MSP programs in Yugoslavia. (Ibid., 768.5 - MSP/7 - 2061)

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.

/3/Formally titled the Agricultural Trade Development and Assistance Act, enacted July 10, 1954. For text, see 68 Stat. 454.

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/

/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)

Kennan

98. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 396.1 - BE/9 - 1861. Confidential; Priority.

Belgrade, September 18, 1961, 7 p.m.

505. Mates asked me to call on him this morning and handed me aide-memoire, abbreviated text of which follows in my next message./1/ His oral remarks accorded closely with tenor of aide-memoire. They had been particularly stung, I gather, by (1) our reference to their degree of unalignment as representing a judgment they felt US not entitled to make, (2) our reference to the role of Yugo at conference, and (3) what they felt was a lack of balance in our interpretation of their foreign policy. Our language, he indicated, had been offensive to them in some respects. They had been mindful of our status as a world power as related to their own size, and had not been able to escape impression that we had endeavored to put pressure on them. They could, he said, have made an issue of the language and held us to account for it, but they had decided against undertaking any polemic over language itself, and had therefore decided to reply as they did.

/1/Telegram 506 from Belgrade, September 18. (Ibid.) The aide-memoire was delivered in response to a U.S. aide-memoire, provided to Mates on September 15, that outlined U.S. concerns with Yugoslav actions at the Belgrade Conference. The Department of State transmitted the outline of this aide-memoire to the Embassy in telegram 323, September 13; see footnote 4, Document 96.

I said our government had had no intention of using offensive language or of putting pressure on them, and if anything in the aide-memoire had given them that impression, it was not intentional on our part. He said they resented particularly our attempt to define what constituted their unalignment and independence. Since ``independence" was a word I had taken liberty of excising from Department's original draft, I pointed out this had not appeared in aide-memoire. He said in their view unalignment and independence were identical. I explained this was not our view at all, that we had no suspicion Yugo policy was being dictated by outsiders; but that we could easily picture an independent nation ranging itself alongside one of the great powers in its foreign policy positions to a point where it could lose plausible claim to unalignment.

At close of our talk, I emphasized to him that while we concerned full right of Yugo Government to determine its own positions, the positions it had recently taken on some of great world issues differed very seriously from our own, and this was a circumstance we could not fail to take into account in connection with problems of Yugo-American relations.

My impression is that formal exchange should be allowed to rest here. If opportunities arise for informal talks with senior Yugo officials either here, in Washington, or in New York, I think we should not hesitate to repeat to them frankly and in detail our reasons for concern over positions Tito has taken.

I have been interested to learn, incidentally, that on eve of Belgrade conference, Tito gave Nehru same impression he had given us of intention to take moderate stance and Indians themselves were surprised by subsequent change in Yugo line. We are continuing our study of possible reasons for this change, and I hope to send more on this in some days.

Kennan

99. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 396.1 - BE/9 - 2661. Confidential. Repeated to USUN.

Belgrade, September 26, 1961, 6 p.m.

543. Embassy has strong impression Yugos much concerned that their performance Belgrade Conference may seriously damage their bilateral relations with the US, and impair prospects for aid projects at levels they have counted upon. Department already aware that Yugos have offered several explanations, some of them mutually contradictory. (For example, they have dropped word privately that they are seeking to protect Khrushchev from internal foes, while at same time explain use communist terminology as designed to shake Moscow domination of international communist movement. Embtel 515.)/1/ In recent days pattern appears to have emerged from remarks dropped to Embassy officers by high and middle level Yugoslav officials, and some UN official but well informed sources, that Yugos seeking create impression that (A) Embassy misunderstands Yugo role at conference, and consequently misinformed Department; (B) Ambassador Kennan personally responsible for misunderstanding. In latter connection Yugos avoiding any acknowledgment that genuine issues at stake, jocosely suggest whole matter tempest in teapot. For example, Assistant Foreign Secretary Ejvoda last night inquired laughingly, ``is the Ambassador still angry at us?"

/1/Telegram 515, September 20, reported on Yugoslav efforts to soften the impact of Tito's speech. (Ibid., 396.1 - BE/9 - 2061)

Appears likely that Yugos will develop this line in Washington and New York in effort to salvage much as possible of aid programs without significant re-examination of policies which have created current difficulties.

Lisle

100. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 396.1 - BE/9 - 2961. Confidential; Limit Distribution.

Belgrade, September 29, 1961, 8 p.m.

568. Deeply appreciate Secretary's support vis-a-vis Popovic (UN Secto 50, Belgrade 3)./1/

/1/This telegram, September 28, informed the Embassy: ``During outspoken but friendly luncheon conversation Secretary told Popovic we had great confidence in Kennan and shared his concern over some remarks made by Tito during conference. Popovic replied he could understand that but expressing it in aide-memoire was wrong and designed to bring pressure on GOY. Secretary replied whole conference obviously designed bring pressure on us, that Yugoslavs did not hesitate to criticize us when we did something they did not like and should not mind when we did likewise and furthermore Guantanamo was none of Yugoslavia's business." (Ibid., 396.1 - BE/9 - 2861)

It is naturally source of regret to me, but not one of surprise or repentance, that some Yugoslavs should make out of adverse reaction they have recently aroused in US a source of grievance against myself. Actually, they are wrong in their suspicions. My briefing to US press representatives here was not given until long after latter had filed their stories on Tito's speech; and reactions I received on that occasion reflected much sharper resentment of Yugoslav line than anything said in reply. If Yugoslav leaders really believe adverse reaction due my personal influence, they are simply nurturing illusions about temper US opinion in light present crisis.

There are unquestionably embittered anti-Western elements within Yugoslav set-up. Exactly where these lie is hard to determine. Assistant Foreign Minister Djerdja, who was member Yugoslav delegation at recent conference, and who appears now to be at Tito's side in latter's Slovenian retreat, obviously belongs to this category. It is significant that there has evidently been, during recent months, a quiet retirement at Foreign Office, aimed at elimination of pro-Western officials.

We are safe in assuming that anti-Western advisers have often argued with Tito that he could safely take anti-American positions without fear of jeopardizing Western economic support. Past experience has seemed to confirm this view. Thesis has frequently been heard here, after all, that Western nations cannot afford not to give aid, and that ulterior political motives would house [force ?] them to continue it even if economic necessity did not. If now US reaction to recent Yugoslav conduct seems to threaten validity this view, it is not surprising some people are embarrassed and find it easier to blame things on an individual foreigner than to admit to having made false estimate of limits of Western patience.

Am persuaded that aside from Tito's speech, time has now arrived when thorough re-examination US-Yugoslav relations could no longer have been avoided. Extent to which Tito has now gained full effective independence vis-a-vis Moscow changes certain of basic assumptions on which US policy toward Yugoslavia has heretofore been based. In addition to that, what was tolerable in Yugoslav official utterances in quieter times is no longer acceptable in a time of crisis, when the chips are down. At some point, demand had to be raised for greater coherence between Yugoslav political attitudes and reality of country's economic and cultural necessities. To be forced to realize this is highly disagreeable to Yugoslavs, who are not used to taking political consequences of their own words and to whom pleasure of eating cake and having it too has become so familiar as to seem a god-given right. No US Ambassador who had task of bringing this realization home to Yugoslavs could or should expect to be universally popular here; and he would not be doing his duty if he was. This is a burden I will cheerfully bear so long as I am supported by Secretary's and President's confidence; for readjustment in question is not only inevitable but is in interests of both peoples. There are many people in Yugoslavia to whom this truth is no less visible than to people at home. We can be sure that for every bit of open opposition occasioned here by any effort to put relations on basis more in accord with realities of time, there will also be many friendly though muted Yugoslav cheers.

Kennan

101. Telegram From the Department of State to the Embassy in Yugoslavia

//Source: Department of State, Central Files, 396.1 - BE/10 - 1161. Secret. Text received from the White House.

Washington, October 11, 1961, 3 p.m.

434. Eyes only for the Ambassador from the President. I have read with great interest your cables after the Belgrade conference on both Yugoslavian and Soviet behavior. They have been of great value to me, and I want you to know that I particularly like your insistence upon representing the interests and purposes of the United States Government, even when this involves abrasions with those to whom you are accredited.

Your 589/1/ with its somber assessment of recent Soviet policy leads me to ask for further comment from you on two points:

/1/Telegram 589, October 6, reported Kennan's view of Soviet motives and intentions in dealing with the Berlin and German questions. (Ibid., 462.00/10 - 661)

1. To what do you attribute the change in policy, with menacing overtones, which you estimate to have occurred at the end of August?

2. In your assessment, what combination of military preparation and diplomatic activity is most likely to lead to an honorable and peaceful resolution of the Berlin crisis?

You may be confident that your views on aid and trade with Yugoslavia are being carefully weighed here. My own request for prompt discussion of this problem in NSC is result of my concern that we develop a balanced, carefully considered stand on this matter.

Ball

102. Letter From the Assistant Secretary of State for European Affairs (Kohler) to the Ambassador to Yugoslavia (Kennan)

//Source: Kennedy Library, National Security Files, Yugoslavia. Secret; Official - Informal.

Washington, October 12, 1961.

DEAR GEORGE: Your series of three messages on the Yugoslav role at the Belgrade Conference,/1/ its implications for US-Yugoslav relations, and the question of our future course have moved us to a good deal of soul-searching. Also, your Despatch No. 41/2/ and your subsequent messages reporting your conversation with Mates regarding our aide-memoire and your further thoughts on the situation have been very useful.

/1/See Document 97 and footnotes 1 and 4 thereto.

/2/See footnote 2, Document 97.

We felt it would be worthwhile, particularly in view of the suggestion made in your letter of September 20 to Harold Vedeler,/3/ to outline to you informally our present thinking on the Yugoslav situation generally and the basic considerations which we think should enter into any reappraisal of our relations and any judgments we form about the direction we should take, the objectives we should seek, and the tactics we should employ. We have considered it unwise to move precipitately to conclusions in this regard until we have had some opportunity of observing and taking due account of reactions in all quarters. Consequently, our thinking in EUR on the situation has been intentionally deliberate.

/3/Not found.

The impact of Tito's speech and Yugoslav positions at the Belgrade Conference upon American sensibilities--as reflected by the adverse reactions within both official and public quarters in the US--necessarily poses the question whether existing US policy in its basic premises and concepts now requires revision. We are strongly inclined to the view that it does not; and, in any case, we feel again (a feeling that you also expressed in your telegram No. 435 of September 6)/4/ that we should allow the dust to settle before coming to any irrevocable judgment in this fundamental regard.

/4/Not found.

Our policy toward Yugoslavia, in its basic aspects, is a policy necessarily conceived in long-range terms. Briefly stated, our policy is:

(1) To assist Yugoslavia--a Communist-ruled state but one which has successfully broken away from Soviet domination--to build a firm secure base of national independence and to support the determination that Yugoslavia has shown to preserve and strengthen its independent status.

(2) To exert an influence upon Yugoslavia's present and future leadership for the evolution of Yugoslav political, economic, and social institutions along more democratically representative and humanistic lines with increasing ties to the West.

(3) To follow a course which would bring the US maximum benefit from the significant role of Yugoslavia as an independent socialist state outside the Soviet bloc which exerts a disturbing influence upon the political and ideological unity of the Soviet-dominated international Communist movement and tends to stimulate the Soviet-dominated Eastern European governments to seek greater freedom of action from Moscow in shaping their own institutions and policies.

This policy, in respect of these essential elements, was formulated in the period following the Tito - Stalin break of 1948 and has been developed and applied with consistency and continuity over the past decade. Admittedly, it has involved a calculated risk for the US both in political and economic terms. It has been subject repeatedly to strong attack from certain Congressional and public critics, particularly at times like the present when the Yugoslav leadership has taken positions on vital international issues that appear identical with or very close to those of the Soviet Union. I think it has been to the credit of our political leadership that it has had the foresight and courage to defend our Yugoslav policy in the face of these attacks. As a result, the policy has enjoyed the support of informed public opinion and has been supported by the Congress in key legislative actions. Viewed objectively and in perspective, and notwithstanding the ups and downs of US-Yugoslav relations, the basic elements of our Yugoslav policy have, in our judgment, achieved some distinctly positive results. Yugoslavia's course after 1948 and its general, if very gradual, evolution since the break with Stalin has been conclusively to the advantage of the US and to the Free World community and to the discomfiture and disadvantage of the Sino-Soviet bloc.

We believe that in assessing the efficacy of our basic policy, it is extremely important to give careful consideration to the long-term receptivity to and the potentialities for constructive change that may increasingly be found among the rising generation of Yugoslav leaders. We cannot smugly predict a more definite shift to liberal and humanistic socialism, but it would be a serious mistake to ignore or dismiss the possibilities of such a development.

In the present Yugoslav situation we are, as we have said above, pursuing a calculated risk in the basic aspects of our policy. It cannot be ruled out that we may fail increasingly in that policy as time goes on. We see no reason to believe that we are at that critical point of no return at this stage. We are also trying, in taking a hard look at the basic components of our policy, to look with equal realism upon possible alternatives. We believe that any basic departure from our present policy (and I am not referring here to some changes in attitudes and tactics--of which I will speak later) would even at this stage of Yugoslavia's development as an independent state entail the risk of moving Yugoslavia back toward and ultimately under Soviet domination.

In this regard, we frankly do not go as far as you seem to go in your estimate of Yugoslavia's ability to maintain its national independence. You would agree, I am sure, that the Yugoslav struggle against the Soviet Union might have turned out far differently if it had not been for our support both material and otherwise. But we believe that the pressures and blandishments which the Soviets could bring to bear on Yugoslavia in circumstances where US and other Western relations with Yugoslavia began to assume a generally negative rather than a generally positive character would be considerable. Moreover, as the confrontation of Free World power and Soviet power extends throughout the world, encompasses new fields of activity, and grows sharper, it may well be that the non-aligned states, or those that aspire to such so-called status, will find it increasingly difficult to avoid alignment on one side or the other. Signs of the effect of these polarizing forces are already evident. To the extent that these forces may operate, they are relevant to the problem of Yugoslavia, even though we recognize, as you have pointed out, that that problem is wholly unique and of great complexity. In the long run, it is possible that the Yugoslavs may succeed in going their own unique and unattached way, but there may well be mounting pressure on them as time goes on to choose more definitely between the divergent and alternative paths of democratic socialist freedom and national independence within the community of free nations or of permanent Communist dictatorship and eventual return to essential orthodoxy within the Soviet-dominated international Communist movement.

I am fully aware, of course, that the thoughts I have expressed above are in very broad and rather general terms. Yet, we feel that the basic concepts which are, in fact, the foundation as well as the justification of our policy are of utmost importance. If they are no longer valid and if we are unable or unwilling to defend them against current and possibly prolonged attack in this country, then our present course and our investment of patient effort and considerable funds of the past decade may come to an abortive conclusion, and there will be little purpose in any serious consideration of more effective tactics for dealing with the Yugoslavs. I have therefore concentrated on what I think are the basic elements of our policy and on which I hope we can clearly agree. You may be interested, in this connection, in the enclosed New York Times editorial which appeared on September 29./5/ The Times' view is simply and categorically expressed and, though it talks primarily in terms of the continuing validity of ``US cooperation with and economic aid to Yugoslavia", it is clearly a forceful endorsement of basic US policy toward Yugoslavia. Undoubtedly, it was evoked by an awareness of the fact that that policy will now undergo searching challenge in this country as a consequence of Yugoslav actions at the Belgrade Conference. In this connection also, we were pleased to have your telegram No. 592/6/ which distinguished quite clearly between abrupt and vindictive measures which may prejudice irreparably our basic policy interests and objectives on the one hand and sober examination of certain aspects of our relations and of the tactics which we may wish to modify and hereafter employ on the other hand.

/5/Not printed.

/6/Dated October 9. (Department of State, Central Files, 411.6841/10 - 961)

If we are in agreement that we should continue our efforts to give effect to a policy toward Yugoslavia which we regard as still valid in respect of its basic elements, then we believe that our immediate problem--as identified and viewed against the background of recent events at Belgrade--is to complete our general stock-taking. We should determine, taking full cognizance of the recommendations that you have submitted, what our attitudes and tactics are to be in the various phases of our dealings with the Yugoslavs, particularly with regard to the continuation, modification, or curtailment of our several Yugoslav aid programs.

These matters are presently under active consideration, as you doubtless gathered from the Department's telegram No. 429 of October 7./7/ This telegram was sent out in order to have the benefit of your views in connection with the Department's consideration of a long statement of EUR's position on trade policy as well as general policy toward Yugoslavia and Poland. The statement was submitted to Mr. Ball for consideration with the President and the Secretaries of Commerce and Defense. We are enclosing a copy as it is scheduled to be taken up in a NSC meeting with the President on October 13./8/ You will find that your views in the Embassy's telegram No. 592 are in basic accord with ours in this document.

/7/Not printed. (Ibid., 411.6481/10 - 761)

/8/See Document 45.

All of this indicates that we are undertaking a searching review of our policy toward Yugoslavia. The immediate question leading to this review has been whether to continue or change our arrangements for licensing exports to Yugoslavia. The more limited consideration of trade has broadened naturally into an examination of general policy and it has been necessary to complete this review before we come to conclusions on your three basic recommendations on economic aid to Yugoslavia./9/ We have been studying these recommendations and plan to send an official instruction on this subject when it is possible to do so.

/9/Reference is to Kennan's recommendations in telegram 493, Document 97.

With best regards,

Sincerely,

Foy D. Kohler/10/

/10/Printed from a copy that bears this typed signature. 7 8 9 10

103. Editorial Note

On October 12, Executive Secretary Lucius D. Battle transmitted to the President's Special Assistant for National Security Affairs Bundy a paper entitled ``Review of Policy Factors Concerning Licensing of Exports to Yugoslavia and Poland," which had been prepared in the Department of State on October 11. The paper was discussed at the 491st meeting of the National Security Council on October 13 when it was agreed to remove the suspension of export licenses for shipments to Yugoslavia and Poland. The October 11 paper and NSC Action No. 2439 are printed as Documents 45 and 46.

104. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.68/10 - 1261. Confidential; Priority.

Belgrade, October 12, 1961, 8 p.m.

614. Embtels 486, 498./1/ I received this morning invitation to call at noon on Mujalko Todorovic, aide-President of the Executive Council and one of Tito's four senior deputies. He does not frequently see diplomats, and I had not previously met him. He received me in presence of newly appointed head of American desk at the Foreign Office, Yaksa Petric, and proceeded to say in substance the following.

/1/Telegram 486 from Belgrade, September 13, reported Kennan's discussion with Popovic regarding U.S.-Yugoslav relations. (Ibid., 396.1 - BE/9 - 1361) Telegram 498 from Belgrade, September 15, reported that Kennan had delivered the text of a U.S. aide-memoire to the Foreign Ministry that day. (Ibid., 396.1 - BE/9 - 1561)

The Yugoslav Government greatly regretted the recent deterioration in Yugoslav-United States relations. It had not wished anything of this sort, but could not avoid conclusion that it had taken place. In substantiation of this view he pointed to: (1) The attitude and tone of the American press, unfriendly to Yugoslavia in a degree not seen before. They considered that Yugoslavia was being incorrectly portrayed. People were being given a wrong opinion about it. (2) Hindrance to economic cooperation. In recent years such collaboration had taken a constructive course and had been mutually advantageous. It had recently been enriched by new forms of cooperation in new spheres of activities. In addition to arrangements between Governments there had been growing contacts between enterprises, private companies, etc. However, recently the whole program of cooperation was being blocked. Because of the atmosphere created by the press, individuals and banks had been hesitant to proceed with these arrangements. (3) Cancellation of Humphrey visit. The visit had been agreed to, the program fixed and visits arranged with the President and other leaders. Now all of this had been abruptly canceled. (4) An article had appeared in the Herald-Tribune (by query I elicited this was from the pen of Rowland Evans) which accused Yugoslavia of being anti-Western and dragged up episodes from the past. The manner in which this article had appeared was offensive. (The hint, I think, was that I had put Mr. Evans up to this.)

Todorovic went on to say that he could continue this list of evidences of deteriorating relations but thought it unnecessary. They had carefully considered my oral representations to Foreign Minister Popovic (see Embtel 486) and also our aide-memoire/2/ and had analyzed recent developments in our relations. They had come to conclusion there had been change in US policy toward Yugoslavia and wanted to know what it meant. Yugoslav policy toward US had not changed. It remained that of an unaligned country. Why was the US interested in a change of policy? The Yugoslavs felt entitled to an early answer. After all, the program of mutual economic cooperation was blocked on a wide scale. It was an important factor in their own plans. They were now working on their economic plan for the coming period. This was soon to be presented to Parliament. They needed to know where they stood. If the US Government did not want to continue collaboration they would have to look elsewhere, also they would have to inform their public which they had thus far refrained from doing. They considered on basis of experience of recent years that this collaboration was on an equal basis, was mutually advantageous, fruitful and useful, not only economically but politically, and that it had strengthened the forces of peace. It was, they thought, a good thing and ought to be continued. If it was not continued Yugoslavia would have economic difficulties but she had known such difficulties in the past and would not shrink at facing them. She had, however, herself done nothing to damage relations. To restore their harmony would be contributing to peace. What the Yugoslavs could not do was to change their foreign policy. They had a debt of consistency to themselves. He asked me to inform my Government and the President of what he had said.

/2/The aide-memoire was given to Nikezic by Kohler on August 29. Telegram 254 to Belgrade, September 1, informed the Embassy. (Ibid., 762.00/9 - 161)

I replied that since my presentation of the aide-memoire to Mates on September 15 (Embtel 498), I had received no further indication of the policies of my Government either on the political side or with respect to economic collaboration. I understood the importance of these matters to them and undertook to transmit his statement to my Government and President at once and to urge an early reply. I emphasized that we had no information here of any restrictive measures taken with regard to economic collaboration except that earlier this week we had heard something of a tightening of controls on export licensing, but did not have full information. With regard to Senator Humphrey I pointed out that it had been our understanding that if he came to Yugoslavia he would not be received by President Tito or any other senior official. In these circumstances I had been unable to encourage the Senator to believe that a visit here at this time would be pleasant or profitable for him. I particularly regretted the cancellation of his visit. I knew the Senator as a man of outstanding intelligence and knowledge of international affairs, and as one who had been favorably disposed in the past toward our collaboration with Yugoslavia. I thought it a shame he had not been able to come here and said if the Yugoslav Government had second thoughts I would be glad to try to see whether the misunderstanding could not be cleared up and the visit arranged after all. To this he made no comment.

On Herald-Tribune article I said I had not seen the article and was unable to comment on its content. I pointed out that Mr. Evans and his two companions had also not succeeded in making appointments with any of the senior Yugoslav officials while here. To this he said they had descended on Yugoslavia too suddenly and appointments could not be arranged in so short a time.

I then said that while I could not respond to his statements at this time on behalf of my Government I would like to make some private observations. Anticipating his observations, I had already prepared handwritten notes, from which I talked. These I left with him at the end of our talk as a reminder. They are transmitted in the following message (Embtel 615)./3/ I embroidered on them somewhat. In conclusion I emphasized that if we reacted as sensitively as we did to Yugoslav attitudes on world affairs it was because our understanding for the unusual position of this country and our regard for experience and personal qualities of President Tito made it impossible for us to take these differences casually.

/3/Dated October 12. (Ibid., 611.68/10 - 1261)

Todorovic ended the interview by saying that my remarks had confirmed him in the belief that US policy had changed. He wanted to stress that it was with us, not with them, that the change had occurred. Their policy was still one of positive unalignment based on their own free judgment and independence, and was aimed at good relations with the United States in the interests of world peace.

In addition to this message containing text of notes (Embtel 615) I shall send another shortly commenting on this demarche and possibilities for our response./4/

/4/In telegram 617 from Belgrade, October 13, Kennan forwarded his suggestions for a reply to Todorovic, urging that the United States avoid linking its criticisms to economic aid. (Ibid., 611.68/10 - 1361)

Kennan

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

//Source: Department of State, Central Files, 611.68/10 - 1361. Confidential; Priority. Drafted by Mudd, cleared by S/S, and approved by Kohler.

Washington, October 20, 1961, 10:11 p.m.

468. Embtels 614, 617; Deptel 449./1/ We believe Secretary's press statement on Yugoslavia October 18/2/ and Kohler's conversation with Ambassador Nikezic October 19 provide initial response to Todorovic's approach re our views on US-Yugoslav relations.

/1/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)

/2/For text, see Department of State Bulletin, November 6, 1961, p. 750.

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 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.

/3/For text, see Public Papers of the Presidents of the United States: John F. Kennedy, 1961, p. 661.

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, Ball/4/ 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 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.

/4/A memorandum of the September 22 Bowles - Nikezic 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.

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.

Rusk

106. Letter From the Ambassador to Yugoslavia (Kennan) to the President's Special Assistant for National Security Affairs (Bundy)

//Source: Kennedy Library, National Security Files, Yugoslavia. Secret. The source text is handwritten.

Belgrade, October 27, 1961.

DEAR MAC: I thought you might like to see the attached copy of a letter I am addressing today to Foy Kohler, on the subject of Yugoslav-American relations. I also enclose a copy of his letter to me, of October 12,/1/ to which this is a reply.

/1/Document 102.

I send this to you because I am somewhat afraid that there may be a lack of coordination here, as between the European Office of the State Department and others in Washington who have an interest in this subject. I feel particularly that in view of the delicacy of Yugoslav-US relations as a matter of congressional and public opinion, the President ought to have knowledge of any actions taken by the Department in this respect which conflict with the recommendations made by this Mission and indeed with the analysis of the elements of the problem at which I have personally arrived. I feel this especially in view of the tenor of the President's telegram to me of October 11 (Dept's 434 to Belgrade),/2/ which gave me the impression that the view I have taken of this situation had commended itself to him.

/2/Document 101.

Life here has its ups and downs, but continues generally to be absorbing and agreeable.

Very sincerely,

George Kennan

Attachment/3/

/3/Secret; Official - Informal.

Letter From the Ambassador to Yugoslavia (Kennan) to the Assistant Secretary of State for European Affairs (Kohler)

Belgrade, October 27, 1961.

DEAR FOY: On my return to my desk here Wednesday, I found your letter of October 12, commenting on various of my communications on US-Yugoslav relations. I am most grateful to you for taking the trouble to give me this comprehensive statement of the Department's thinking on these matters. With much of it I can go along; but there are some points with which I cannot fully concur, and others which give me some concern. Let me tell you frankly what I have in mind.

Your discussion opens by stating that ``the impact of Tito's speech and Yugoslav positions at the Belgrade Conference upon American sensibilities" poses the question whether our policy towards Yugoslavia requires revision. This suggests to me a certain misunderstanding of my position. I have at no time taken the position that it was only, or even primarily, the Yugoslav performance at the Belgrade Conference which posed the question of a reconsideration of our policy towards this country. You will recall that the paper submitted with my letter to you of July 31,/4/ actually drafted in June, gave a summary of Yugoslav positions on international questions which accorded very closely with the views Tito later put forward at the Conference. In my despatch 41, of July 20,/5/ I submitted recommendations on aid which implied changes in the concept of our basic policy. If, in the wake of the Belgrade Conference, I tightened up the recommendations on aid, it was because I felt that Yugoslavia's performance at the Conference represented a final demonstration of the failure of my own efforts and those of others in the new Administration to make an impression on Yugoslav thinking, and a serious renewed commitment by the Yugoslavs to the use of their international influence for purposes not conducive to world peace and stability. This made it impossible for us to hope for any early change in the Yugoslav position, forced us to regard the Yugoslavs as being for the moment beyond our power to influence with the means available to us, and left us no choice but to take most serious account of their present stance in world affairs.

/4/Not found.

/5/See footnote 2, Document 97.

The question, therefore, as I see it, is not whether Tito's performance at the Conference justifies a change in our policy. The question is whether policies which may well have been generally effective in the more distant past retain their justification today, in light of the present international situation and of Yugoslavia's present stage of economic development, and in the face of a renewed and highly formalized commitment by Tito to an anti-American policy scarcely distinguishable from that of the Russians.

You list three purposes to which you conceive our present policy to be addressed. Let me just comment on each of them:

(1) The first is:

``To assist Yugoslavia--a Communist-ruled state but one which has successfully broken away from Soviet domination--to build a firm secure base of national independence and to support the determination that Yugoslavia has shown to preserve and strengthen its independent status."

The Yugoslavs, in my opinion, have already built a firm and secure base of independence, and need neither foreign inspiration nor foreign support in their determination to maintain it. Forgive me if I expand on this point, for it is a very important one.

Two things are often confused here: (a) identity of policy with Soviet bloc, and (b) acceptance of a position of virtual or formal subordination to Moscow. In the first of these we have nothing to lose; in the second, we have nothing to fear.

Yugoslav attitudes on international affairs are already either identical, or very nearly identical, with those of Moscow on all major world questions. The Yugoslav leaders have themselves repeatedly asserted this. There can be no question but that Yugoslav policy, like that of Moscow, is aimed generally at the frustration of United States efforts in the cold war and the elimination of our country as a major factor in world affairs. This policy is not the result of any lack of independence; it represents a deliberate choice on Tito's part. He could, if he wished, take quite a different line.

What Tito disagrees with Moscow about is only whether he should again accept, as before 1948, a relationship of direct subordination--formally to the collective body of Moscow-approved communist parties, actually to the leaders of the Communist Party of the Soviet Union. In relation to international affairs, this question has secondary significance; it is only a matter of whether certain views are to be entertained, and certain policies followed, voluntarily or by way of formal obedience to external authority. The views and policies would be substantially the same in either case. With respect to domestic policies, however, the significance of this question is immense and painful. To accept Moscow's authority once more would mean not only the sacrifice of all those features in which the Yugoslav social and economic system now differs from that of the Soviet Union (a sacrifice which the Yugoslav people could not be brought to accept today other than by the application of the most extreme Stalinist terror) but also granting Moscow in effect the right to determine, and to change at will, the political leadership of the Yugoslav party. I can assure you that rather than make these concessions, Tito would go back into the hills and resume the life he led in the midst of the German occupation. I can conceive of no circumstances in which it would be worth his while to make such a journey to Canossa. To do so would negate all that he has striven for, and all that he has achieved, in thirteen years of independent existence. It would involve a personal humiliation so drastic as to wipe out completely the formidable image he has attained in the eyes of his own people and the underdeveloped world and to make it plainly impossible for him to carry on in the leadership of the Yugoslav party. Nor would it even be a hopeful solution to Yugoslavia's economic problems. Even if our aid were to be wholly terminated (which, as you know, I have never advocated) the result, in my opinion and in that of the senior economic officials in our establishment here, would be merely a slowing down of Yugoslavia's rate of growth, not a collapse of her economic system. A renewed submission to Moscow might bring some relief, but it would scarcely enable the Yugoslavs to avoid a falling off in the rate of growth. I cannot conceive of the Russians, if they again had control of Yugoslavia, permitting it to have a rate of growth higher than that of other Eastern European satellites.

For these reasons, I have to give it as my considered opinion, after a half-year at this post, that Yugoslavia's independence does not today depend on our aid. Our aid does, no doubt, facilitate to some extent the maintenance of this independence. This being so, there is a measure of justification for continuance of certain forms of aid; and this has been taken into account in the recommendations from this Mission. But we are overrating ourselves, and underrating both Tito's amour propre and his will to survival, if we think that his unwillingness to submit once more to Moscow's authority is kept alive only by our largesse.

(2) The second of the purposes you mention is

``To exert an influence upon Yugoslavia's present and future leadership for the evolution of Yugoslav political, economic, and social institutions along more democratically representative and humanistic lines with increasing ties to the West."

This is certainly a worthy aim, but I have strong doubts as to how far our aid programs promote it today. The Yugoslavs are now engaged in drawing up a new constitution which will presumably determine the organization of their society--politically, economically, and socially--for a long time to come. They are also drawing up specific economic plans for the coming years. I know of no evidence that they, in undertaking this effort of forward planning, are appreciably influenced by our aid programs as such. They have come--and this cannot be too often emphasized--to take these programs largely for granted. They believe that we are giving this aid out of internal compulsions of our own, and that we will continue to give it regardless of their behavior either domestically or in foreign affairs. They therefore feel under no obligation to take our aid programs into account when it comes to shaping the character of their society. Tito has said publicly, only this last Thursday (October 26), that there are no differences of opinion between himself and Moscow ``on the ultimate aims of the building of socialism." That has always been, and remains, his view. Nothing is further from his thoughts than to alter this attitude by way of reaction to our aid programs.

It must be understood that the Yugoslavs receive aid from us unhappily. To them, it is a humiliation to take help from a capitalist country. They accept this humiliation as the price of economic necessity. But they feel toward us all the resentment and humiliation one normally feels toward someone whom one does not really regard as a friend but on whose financial charity one is momentarily dependent. They do not have confidence in the soundness of the structure of our society. They consider us doomed to ultimate failure in our undertakings on the world scene. Our readiness to aid them, in the given circumstances, is something which they regard, for the most part, with a cynical and ironic humor.

In certain ways, of course, the Yugoslavs are influenced by our example in the shaping of their own society. There are certain respects in which they feel that methods and approaches adopted in the United States are separable from the social and political system prevailing there and can therefore be appropriated to Yugoslavia without danger. But in this area it is their own observations by which they are influenced, not our aid per se. I consider that our DLF operations are helpful in enabling them to make such observations; and I have, as you know, recommended that these operations should continue. I cannot say the same thing of the PL 480 aid, nor of the various programs implemented through private agencies. As for the technical assistance: this is a debatable point. I cannot bring myself to believe that the trend of Yugoslav society would be much different today had we never conducted programs of this sort.

All in all, then, I would have to say that our aid is not an important factor in influencing the shaping of the development of Yugoslav society. Whatever value it might have along these lines would certainly not be materially reduced if the modifications in our programs proposed by this Mission were accepted.

(3) The final purpose of our aid policy which you mention is

``To follow a course which would bring the US maximum benefit from the significant role of Yugoslavia as an independent socialist state outside the Soviet bloc which exerts a disturbing influence upon the political and ideological unity of the Soviet-dominated international Communist movement and tends to stimulate the Soviet-dominated Eastern European governments to seek greater freedom of action from Moscow in shaping their own institutions and policies."

To this passage one would have to repeat, in the first instance, the comment made concerning (1) above: namely, that Yugoslavia's independent role is today not primarily a product of our aid. We do indeed benefit from this independent role in the sense that it stands as a living proof of the possibility of a socialist country's pursuing aims identical with those of Moscow, yet from a platform outside the scope of Moscow's disciplinary authority. It is good to have this possibility documented currently. This constitutes a constant source of doubt and uneasiness within the communist camp.

This benefit, however, is one which flows automatically from the fact of Yugoslavia's independence. It represents an effect which the Yugoslavs cannot help producing, so long as they persist in defying Moscow's authority. In so far as their independence gives them discretion in determining the effects of their actions on the bloc, it is plain that they make every conceivable effort to avoid causing trouble to Moscow. They seem concerned, in fact, to demonstrate at every point that there is therefore no reason for Moscow to take umbrage or to try to reassert its previous authority over Yugoslavia. It is to this end, I think, that Tito takes such great care never to criticize the Russians publicly but to identify himself, wherever possible, with their positions on world affairs. In this sense, it may be said that we are deriving not maximum benefit from Yugoslavia's role as an independent state but minimum benefit. It is the considered desire of Yugoslav leaders that this should be so.

So far, then, as concerns the purposes of our policy, I feel that these purposes are being served only in limited degree by the approaches and devices we have heretofore employed. The reason for this is simply that times have changed and conditions have changed; responses which were effective and justified in an earlier period have lost much of their effectiveness and justification today; Yugoslav capabilities and necessities have changed; and, as is so often the case in life, stimuli which produced a certain effect when novel and unaccustomed, no longer produce this effect when they have become routine and expected.

In addition to this failure to serve positive aspirations, there are certain ways in which our present practices have directly deleterious effects. The regularity and inelasticity of our aid programs--the extent to which they have become matters of habit and routine rather than responses to conditions of the moment--and the unwillingness on our part to recognize any connection between them and the current political attitudes and behavior of the Yugoslav Government--all these things have contributed, in my opinion, to reactions on the part of the Yugoslavs which I find detrimental to the wider purposes of our relations. It is these conditions which cause the Yugoslavs to take our aid so extensively for granted, and to believe that we are incapable, for domestic political reasons, of not giving it. In addition to this, aid given in this manner--with so little relation to the behavior of the recipient government--amounts simply to a blanket underwriting of all the economic and financial policies of this government and indeed even of such of its political policies or actions which (like the recent Belgrade Conference) cost a good deal of money and represent luxuries for a country of these resources.

To some extent, in both the external and the internal fields, the policies which we underwrite are ones directly contrary to our own purposes. An example of this is in the agricultural field, where surplus American food, if given too generously, simply relieves the Yugoslav Government of the need of worrying about the productivity of Yugoslav agriculture and enables it to afford the luxury of ideological experiments, aimed against the individual peasant, which are economically counter-productive. Similarly, in the field of external relations, I feel that one of the effects of the extensive aid we have recently given to the Yugoslavs has been to relieve them of the necessity for coming to grips with the problem of their economic relations with Western Europe, and to permit them to indulge in all sorts of activities in Africa which no doubt contribute to Tito's personal prestige but which are certainly not going to be the answers to Yugoslavia's long-term problems of international trade and finance. One should also bear in mind, in this connection, the extent to which the Yugoslavs have involved themselves in extending to African countries very much the same sort of credits and technical assistance which they have been getting from us. These favors, let us recall, are being exploited politically not for purposes which contribute in any way to those of our own foreign policy but rather to ones which are almost identical with the Soviet Union. It seems to me that we are taking a heavy responsibility, in the face of American opinion, by investing American resources in such a manner as to underwrite uncritically any and all policies, internal and external, which the Yugoslav Government wishes to pursue.

In recent years, as you know, Yugoslavia has been the leading per capita recipient of United States surplus food. In addition to this, she stood, as I understand it, third last year on the list of recipients of United States aid generally, being exceeded only by South Korea and India. Now there is room, in my opinion, for a moderate and highly discriminate measure of American economic assistance to this country; and you will note that my recommendations have allowed for this fact. But I think it unrealistic to suppose that U.S. public opinion will long be willing to adjust itself to a situation in which a country whose policies on the international scene operate almost 95 per cent to the favor of the Soviet Union figures among the leading recipients of U.S. aid. These things are of course a matter of degree; but when was degree not important? It is true that we should not demand of the recipients of our aid that they agree with us on all international questions. But we may demand of them a reasonable degree of objectivity at least in the treatment of our differences with the Soviet Union; and we may demand from them the evidence that they feel some concern for the preservation of our power and influence as a factor in world affairs. These things we do not receive from the Yugoslavs. In my opinion, it is dangerous to suppose that our economic collaboration with Yugoslavia can continue for very long, in its previous dimensions, without arousing violent and possibly unmanageable adverse reactions in the United States. To try to continue them in this way is therefore to assume the risk that when the scales are finally tipped, they will be tipped too violently, and even that modest measure of economic collaboration between the two countries which is warranted by circumstances will be jeopardized. The best way to assure an even and fruitful development in our relations with this country is to take account betimes of the basic unfriendliness and lack of objectivity in its treatment of ourselves and our world interests, and to scale our favors down to a level which can be more easily defended in the face of domestic opinion. The fact that the Department has thus far been successful in resisting attacks on our aid programs for Yugoslavia is not a guarantee that this will always be so; nor is it in itself an argument why these programs should be maintained without change.

One last point. On September 15 I was sent down to the Yugoslav Foreign Office to deliver a very stiff aide-memoire. I stated on that occasion that the U.S. Government was compelled to take a serious view of recent Yugoslav actions and it would necessarily have to give continuing study to their implications for U.S.-Yugoslav relations. Such a statement would obviously never have been made to the Yugoslavs if we had not intended to follow it up with some action, and it ever occurred to me that this would not be the case. Had I supposed that this was merely a matter of words and that we proposed to do nothing further to make our displeasure felt to the Yugoslavs, I should have remonstrated most vigorously against making any such representations; for their only effect could then be to demonstrate to the Yugoslavs the emptiness of our statements and to confirm them in the view that they have nothing to lose by opposing us on the world arena.

This is why I was startled to see it stated in your letter that the Department is ``strongly inclined to the view" that no revision of existing U.S. policy ``in its basic premises and concepts" is now required. I can only take this to mean that the Department disapproves of any modification of any sort in the aid program which we have been carrying out in recent years, and which are now rapidly coming to assume a routine and institutional character. I am sure you will understand that if this is to be the response to the recommendations that have gone forward from this Mission (recommendations of whose general tenor the Yugoslavs are, I am sure, aware) the weight of any words I may personally have occasion to address to them in future on questions of world affairs will be precisely nil.

My own views as to the line we should take toward the Yugoslavs today are set forth in my various telegrams on aid and in my proposals for the reply to Todorovic. I think we must recognize that our aid programs have come to be taken so extensively for granted by the Yugoslavs that their psychological and political effect is minimal. We must recognize that it is not realistic to hope that a country whose government is deeply committed to the support of Soviet foreign policy can long continue to be a leading recipient of American aid without this provoking strong negative reactions in American opinion. I think that by failing to modify these programs at present we will be increasing the risk that some day our economic collaboration with this country will be entirely and abruptly destroyed by violent reactions in American public opinion. I feel, finally, that we will be making an egregious tactical error, and will lose such slender possibilities as we still have for influence over this Government if, having now talked widely and strongly, we fail to give any substance to our words in the form of action. For these reasons, I hope the Department will give renewed and serious consideration to the recommendations that have been made from this Mission, and will let us have an early indication of our Government's attitude on the matters in question.

Sincerely yours,

George F. Kennan/6/

/6/Printed from a copy that bears this typed signature.

107. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.68/11 - 661. Secret; Priority.

Belgrade, November 6, 1961, 1 p.m.

708. Eyes only for Under Secretary Bowles. In view forthcoming NSC review policy towards Yugoslavia, must request your personal attention to following.

I have, as you know, made various recommendations over recent weeks concerning general policy and aid to Yugoslavia: particularly despatch 41, July 20; series three messages following Belgrade conference (485, 493, 507); and telegram 614 reporting Todorovic's approach and suggesting nature our reply./1/ President's personal message (434)/2/ of October 11 gave me impression approach embodied in these messages had met with his approval. Am now troubled by two circumstances, to wit:

/1/Telegram 493 is printed as Document 97. Regarding telegrams 485 and 507, see footnotes 1 and 4 thereto. Regarding despatch 41, see footnote 2 thereto. Telegram 614 is printed as Document 104.

/2/Document 101.

1. Letter from Kohler, dated October 12,/3/ indicated basic disagreement with me on analysis Yugoslav situation and general policy, but did not specifically mention my recommendations concerning aid.

/3/Document 102.

2. I now understand on basis indirect and informal information from AID that Department, without notifying me or communications in any way, has approached AID with proposals concerning future aid programs for Yugoslavia which take no visible account of my recommendations and are in most respects in conflict with them. Assume it is intended results this consultation between Department and AID will be laid before NSC as agreed paper. Am thus constrained to fear that unless something is done my own views will not come to attention NSC at all in context forthcoming review.

Do not mind being disagreed with but do dislike being silently by-passed. No one in Department has at any time commented on my recommendations re AID or suggested to me they were unacceptable. Feel I should be given opportunity for consultation and rebuttal, before Department commits itself to contrary views. Importance of AID concept within framework general policy is such that out of hand rejection, without consultation, would, if based on President's authority, seem to raise serious question of confidence. Besides, in view present temper public opinion should think it obviously disadvantageous that Congress be faced with AID decisions for which Ambassador on spot could not share responsibility. Hope therefore you can see to it if contrary views are to be presented to NSC, my opinions are also made known to that body and that President, in particular, is made aware existence and nature of differences.

For your convenience, differences as I understand them on basis this indirect information are these:

A. I have recommended DLF assistance be continued unchanged; EUR proposes to cut it.

B. I have recommended no new technical assistance contracts along previous lines be concluded: EUR proposes to continue this program for at least several more years.

C. I have concluded programs of private agencies (CARE, Church World Service, etc.) no longer called for by circumstances and have, with concurrence local representatives here, recommended they be gradually tapered off over two or three years and terminated; EUR challenges this judgment and proposes continue them unchanged.

D. Have no idea what Department proposes to do about PL 480 aid, in coming period, but if this differs sharply from my recommendations, would very much like to know this and to know reasons therefor before Department finally commits itself in NSC./4/

/4/In telegram 535, November 7, Bowles replied that ``whatever emotional reactions may have existed here a few weeks ago in regard to Yugoslavia have largely been brought back into fair balance." (Department of State, Central Files, 611.68/11 - 761)

Kennan

108. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.68/11 - 1461. Confidential; Priority.

Belgrade, November 14, 1961, 7 p.m.

757. Wish to draw attention to implication of statements on US-Yugoslav relations in Tito's Skoplje speech./1/ To facilitate consideration, full text these passages submitted in next following message./2/

/1/The Embassy transmitted a summary of Tito's speech in telegram 752 from Belgrade, November 14, and made a preliminary analysis of the speech in telegram 755 from Belgrade, November 14. (Both ibid., 768.11/11 - 1461) In his speech, Tito charged that the United States was using food as a weapon to try to force Yugoslavia to follow its policy line. He rejected aid on such terms and insisted that Yugoslavia would go it alone.

/2/Telegram 758 from Belgrade, November 14. (Ibid.)

Department will wish to make its own study this language, but it seems to me from careful study Serbian text that for Yugoslav reader or listener following inferences were inescapable:

(A) US has recently been refusing to sell wheat to Yugoslavia on normal commercial terms or any other.

(B) US has recently declined to sell planes to Yugoslavia, though we had previously done so.

(C) US is refusing to accept Yugoslav visitors in US.

(D) All these positions have been taken by us with view to bringing pressure to bear on Yugoslavia.

(E) Yugoslavia has in recent years not received from us any grant aid, nor is it asking for any. (This last is flatly stated and goes beyond limits of inference.)

I have no information as to what action our Government is considering taking on 1962 Aid Programs, but understand decisions of some sort may be expected in near future. Wish to point out that if above inferences are allowed to stand uncorrected, any decisions we may make known along these lines can only lead to further misunderstandings among Yugoslav public. If, for example, in face of these statements, we now go ahead and simply express readiness to conclude contract for further surplus wheat, we create erroneous impression that, shamed by Tito's logic and sobered by threatening reference to bitterness of Yugoslav people, we have yielded to pressure and agreed to do what were unwilling to do before he spoke. Same applies to DLF. If, similarly, we offer to renew contracts for grant aid, it will look as though we are proffering a type of aid Yugoslavs have not recently been receiving, do not want, and did not ask for. In these circumstances, to ignore Tito's statements and to act on aid requests as though nothing had been said would be to compound a confusion not our own making. It would also bring discouragement to those people within the regime who have been trying to warn against Tito's anti-Western course.

For these reasons, I feel we must react in some way. Several courses are open to us. It is difficult for me to recommend any course in absence information our intentions with respect to 1962 Aid Programs. Before we do anything at all, we should make up our minds about PL 480 Aid. Assuming that we are inclined, other things being equal, to make further contract for delivery PL 480 wheat, would suggest course of action along following lines:

1. Make private communication to GOY, complaining of Tito's innuendoes, asking for their clarification by Yugoslavs, and stating that we ourselves will be obliged in any case to put facts before public. At same time we state to Yugoslavs our readiness, notwithstanding Tito's misleading statements, to conclude further contract PL 480 wheat in near future.

2. We make public statement announcing our readiness, in view recent drought and resulting difficulties, to conclude new PL 480 wheat agreement, reminding public we have always been ready, in addition, to sell Yugoslavia any amount of wheat she required on normal commercial terms and that GOY has never been left under any doubt about this. At same time, and with specific reference to Tito's statements, we publish full factual data on recent sale of planes to Yugoslavia, on reception Yugoslav officials in US, and on form and amounts of grant aid extended in recent years. In same statement we make it plain that at no time have any threats been made to Yugoslavs or has pressure been brought to bear on them in connection with any of these matters.

3. We use every means at our disposal to bring these statements to attention Yugoslav public, using VOA and USIS media to limit. (Something of this sort should in fact be done even though decisions on aid should be further delayed.)

4. Until this last has been thoroughly done, we refrain from making any statement to Yugoslavs or public concerning any other positive decisions we may have taken about 1962 Aid Programs.

In explanation of above, would say I think we would be inviting further misunderstanding in public mind if we were at this time to refuse to supply further surplus wheat or to delay much longer in making known our readiness to supply it. In the particular case of grant aid, fail to see how we can consider further extension such aid until Tito in some way corrects his flat statement that no one-sided aid has been received from us by Yugoslavs in recent years.

Kennan


109. Memorandum From the Executive Secretary of the Department of State (Battle) to Secretary of State Rusk

//Source: Department of State, S - S/NSC Files: Lot 70 D 265, NSC Misc. Secret.

Washington, November 15, 1961.

YUGOSLAV PAPER FOR NSC

Attached as Annex A/1/ is Mr. Hamilton's memorandum of November 7 to you recommending that the U.S. should stop all aid to Yugoslavia except P.L. 480. At Annex D is EUR - Mr. Tyler's memorandum of November 14 setting forth the political implications of such termination of aid to Yugoslavia. At Annex B is EUR - Mr. Tyler's review of U.S. policy and assistance programs to Yugoslavia. Annex B includes EUR's recommendation that, in addition to P.L. 480 assistance, the U.S. should provide development grant assistance in the amount of $2.8 million for FY 62 and development loans in the magnitude of $15 million or $20 million. At Annex C is a memorandum to Mr. Hamilton from his staff along similar lines except that it recommends development loan funds be limited to $2 million. Annex E is Ambassador Kennan's most recent expression of views.

/1/Annexes A - D are not printed. Annex E is telegram 757, Document 108.

A summary of the conflicting recommendations follows.

Mr. Hamilton believes there is no justification from an economic point of view for development grants or development loans in any magnitude. He argues that the development grant funds (spent primarily to support U.S. technicians in Yugoslavia and the training of Yugoslavs in the U.S.) are of little economic significance and desperately needed in newer and much less developed countries where an amount of $2.8 million would make a highly significant contribution to development. While he believes that there is a political value attached to bringing these Yugoslav personnel to the U.S., he does not consider this of sufficient importance relative to the usefulness of this money in other areas. He notes that less than one hundred U.S. technicians were sent to Yugoslavia last year under this program and that only three hundred Yugoslavs came here. He observes that Ambassador Kennan recommends that no new technical assistance contracts of this kind be entered into this year.

With regard to development loan funds, Mr. Hamilton reasons that other sources of credit are available, that the small amount which the U.S. might make available would not be decisive, and that the need for these funds is incomparably greater in other countries. EUR believes that over the next few years our assistance activities should be phased out and our development lending be replaced by private commercial credits. It recommends, however, that we avoid actions which it feels might be interpreted as abrupt or vindictive.

Mr. Hamilton and EUR agree in the wisdom of continuing P.L. 480 assistance.

The NSC Record of Actions also requested that the Department's recommendations ``should rest on a review and restatement of U.S. policy toward" Yugoslavia./2/ EUR's proposed review and restatement is Annex B. EUR's political analysis of Mr. Hamilton's recommendations (Annex D) reasons that termination of all U.S. aid to Yugoslavia at this time (other than P.L. 480) would lead the Yugoslav regime to react strongly to the implied pressures of the U.S. action and would seriously prejudice our relations with that country. It also states that such action would be regarded as a basic change in U.S. policy towards Yugoslavia and might influence other Western countries and private trading interests to take similar action./3/

/2/NSC Record of Action No. 2439, Document 46.

/3/According to a November 16 memorandum by Battle, attached to the source text, Secretary Rusk requested further study of actions on Yugoslavia.

L. D. Battle/4/

/4/Printed from a copy that bears this typed signature. G.R. Olsen signed for Battle.

110. Memorandum From President Kennedy to Secretary of State Rusk

//Source: Department of State, S/S - NSC Files: Lot 70 D 265, NSC Misc. Secret. Attached notes indicate that the memorandum was drafted on November 15 and delivered to the Department of State on November 17.

Washington, November 16, 1961.

I saw Tito's statement about food in this morning's paper./1/ This statement makes it more difficult now. About three weeks ago the Committee was asked to report on this. The Committee should have completed its report some time ago. Could you let me know immediately about this?

/1/See footnote 1, Document 108.

John Kennedy

111. Telegram From the Department of State to the Embassy in Yugoslavia

//Source: Department of State, Central Files, 611.68/11 - 1461. Confidential. Drafted by Vedeler; cleared by Tyler in draft, B, S/S, USIA and AID; and approved by Davis.

Washington, November 18, 1961, 5:58 p.m.

565. We appreciate your suggestions for action Embtel 757/1/ and agree we should take no steps vis-a-vis Yugoslavs, at least publicly and officially, until decision reached on PL 480. We now have under consideration possibility of coming to decision on this separate item before review of general policy and other assistance programs completed.

/1/Document 108.

Re your point 1 we think it desirable at time when any PL 480 discussions begin with Yugoslavs to bring up subject Tito's November 13 speech seeking clarification obscure references about economic relations with US and making point such statements subject to uncertain construction not helpful to interests either party in solution mutual problems and in continued development relations between the two countries.

Meanwhile we will suggest informally to Yugoslavs here along line of Kohler in conversation with Nikezic October 19 (Deptel 468),/2/ and hope you proceed in similar way, desirability avoiding public statements that are misleading or prejudicial US-Yugoslav relations particularly while we are trying to work out solutions to problems in our economic relations.

/2/Document 105.

Re point 2 we believe public statement of type you suggest should be deferred until PL 480 agreement concluded if decision taken for such agreement. We have already released to press full information on sale of aircraft and given material on grant aid to number of correspondents who have made inquiries. Secretary's press statement October 18 already makes point US not using aid to purchase agreement from Yugoslavs with our views.

Re point 3 we have carried facts of US assistance programs and US official statements re Yugoslavia over media to Yugoslavia and plan to continue do so as our future actions warrant./3/

/3/In telegram 782 from Belgrade, November 20, Kennan replied: ``Continuing delay over PL 480 is helping to spread general impression, not only here but apparently in other `non-aligned' countries, that we have definitely refused consider further surplus food contracts unless Yugos publicly recant some of views expressed at Belgrade conference. This is of course exactly impression Tito wishes to establish, and it tends to become stronger with every day uncertainty continues. To extent it prevails, eventual affirmative action on our part will appear as evidence belated recognition Tito cannot be budged in his views and triumph for him in his determination not to have his policies dictated by us under economic pressure." (Department of State, Central Files, 611.68/11 - 2061)

Rusk

112. Memorandum From Secretary of State Rusk to President Kennedy

//Source: Kennedy Library, National Security Files, Yugoslavia. Secret. A notation on the source text indicates it was taken from the President's weekend reading book.

Washington, November 21, 1961.

SUBJECT

Proposed PL 480 Sales to Yugoslavia

Background

At the NSC meeting on October 13 you requested that I review all assistance programs to Yugoslavia and make recommendations to the Council on these programs on the basis of a review and restatement of United States policy toward that country. In your memorandum of November 16, you asked to be informed about the status of this study./1/

/1/See Documents 103 and 110.

Discussion

Status of Review of Yugoslav Policy

We have virtually completed within the Department the reexamination of United States policy towards Yugoslavia. In essence, our review reflects that the United States policy, maintained since 1949, of assisting Yugoslavia to build a firm base of national independence and of exerting our influence upon the evolution of the Yugoslav system has shown striking successes. Yugoslavia today maintains its national sovereignty and is wholly independent of Soviet control. Economically and culturally it is tied to the West. Internally, the Yugoslav system remains essentially Communist; but in the years since its break with the Soviet bloc, the system has evolved in the direction of decentralization and liberalization, so that today Yugoslavia bears little resemblance to the model Soviet satellite it was 13 years ago. Internationally, Yugoslavia is more likely to support Soviet positions on international issues, but it does not invariably do so. Its over-all position is more akin to leftist non-aligned countries, such as Indonesia, rather than to Soviet bloc states.

Yugoslavia's principal significance remains that of an independent Communist regime which successfully resisted Soviet imperialism. The dramatic economic growth achieved by this regime, along with the evolution of its system, has fortified its role as a disruptive element in the international Communist movement and as a source of encouragement to nationalist anti-Soviet tendencies in the bloc.

Our reexamination concludes that it is important for the United States to continue to pursue basic United States objectives towards Yugoslavia, including the continued development of our economic relations so as to continue to derive benefits from Yugoslavia's unique position. Our efforts to develop recommendations on specific programs have, however, been complicated by factors which transcend Yugoslavia. Given the world-wide demands on our limited aid resources, we have not yet agreed whether Yugoslavia should be eligible for development-type assistance and if so the amount which should be programmed for Yugoslavia. We are concerned about the impact on our relations with Yugoslavia, as well as on Yugoslavia's relations with the West, of any abrupt termination of assistance programs. We are planning on consultations with some of our principal allies in this connection. The one program which presents no problems from the viewpoint of available resources concerns sale of agricultural commodities under PL 480. The Department and Ambassador Kennan strongly believe that we should proceed at this time with agricultural sales under PL 480, irrespective of the decisions taken regarding development-type assist-ance. Moreover, from the viewpoint of timing, it is the question of a PL 480 program that requires immediate consideration. I urge, therefore, that a decision be reached on this matter at once, in advance of the over-all review of policy towards Yugoslavia by the NSC.

The Role of PL 480 United States Policy Towards Yugoslavia

On August 4, the Yugoslav Government requested a further Title I program made up of the following commodities:

Metric Tons Millions of Dollars

Wheat 1,000,000 $ 63.6

Cotton 35,000 18.9

Tallow 6,000 1.1

Edible Oil 30,000 9.2

Ocean Transportation 9.5

Total $ 102.4

The large amount of wheat requested in the program results from the poor harvest, complicated by a late summer drought which, for psychological reasons, is affecting the deliveries by peasants.

Ambassador Kennan has recommended a program which, he estimated, would carry the Yugoslavs through to June 30, 1962 without any increase in reserves. Specifically he has recommended a maximum of 500,000 tons of wheat, 5,000 tons of cotton and no tallow or edible oil. The Ambassador has also recommended that the Yugoslavs be informed that we can give no assurance that a PL 480 program will be available for them next year and they may therefore wish to take account of this possibility.

The provision of agricultural commodities has represented a major ingredient of our assistance programs to Yugoslavia, over the past eleven years, comprising $1 billion out of the total of $1.3 billion in economic assistance provided to Yugoslavia between 1949 and 1961. By helping to assure the regime of its essential requirements for foodstuffs, we have contributed rather directly to the change in Yugoslav agricultural policy from one of forced collectivization and coercion to a more reasonable policy of voluntary cooperation and incentives.

Failure to proceed with a PL 480 agreement at this time will not of itself induce the Yugoslav leadership to return to the old agricultural policies; they might, however, be led to introduce harsher regulations in order to obtain necessary supplies from the peasantry. A more predictable and, from our viewpoint, disturbing effect, is the likelihood that the strain on the Yugoslav balance of payments would lead to a postponement of certain of the trade liberalization measures planned earlier this year in connection with a foreign trade and foreign exchange reform. Since we have provided $100 million in support of this reform, as part of a $285 million multilateral program, such a development would not be in the best interests of the United States.

It is our conclusion, therefore, that the United States should provide further PL 480 assistance, although in a somewhat different form from previously. We would recommend the provision under Title I (sales for Yugoslav currency) of up to 500,000 tons of wheat and 30,000 tons of edible oils. Such a program is estimated at about $45 million. This should enable the Yugoslavs to meet their requirements through June 30, 1962 with stocks on hand at that date equivalent to one month's consumption for wheat and two months' consumption for oils. In view of the tighter cotton supply situation in the United States and its consequent ineligibility under Title I we would propose to finance up to 50,000 bales of Yugoslavia's cotton requirements under Title IV (sales on long-term dollar credit basis). We would similarly offer to supply the 6,000 tons of tallow requested under Title IV. If cotton should become unavailable under Title IV we would propose sale of cotton under normal Commodity Credit Corporation credit terms.


Ambassador Kennan has also recommended that we inform the Yugoslavs we can give no assurance in regard to PL 480 assistance after this year. In our view it would be advisable to avoid this step since the situation in Yugoslavia may develop so as to make such assistance desirable. Instead we believe it would be more in keeping with our policy interests in Yugoslavia to inform the Yugoslavs of our intention in future years of shifting increasingly away from Title I transactions (sales for local currency) in favor of those under Title IV (sales on a dollar loan basis).

Tito's November 13 Speech

In speech at Skoplje on November 13, Tito stated that ``certain capitalist circles" in the United States and ``other reactionary minded people are persistently spreading propaganda against Yugoslavia, saying that every form of aid to Yugoslavia should stop, that the Yugoslavs should not be fed, that wheat should not be sold in our country, that no aircraft should be given to us, that our people should not be admitted there, and so forth." He charged that economic pressure has thus been brought upon Yugoslavia when it has been severely hit by drought and when it is in an unpleasant situation. Tito went on to say that if no aid were given to Yugoslavia he would be prepared to buy wheat.

I agree as you have noted in your memorandum of November 16 that Tito's speech complicates matters. I do not believe, however, that our actions should be based solely on what Tito says. His speech was directed primarily to his own people and was probably intended to dispel anxieties arising from the bad drought and reports of a change in United States policy. Tito was also reflecting sensitivity to the attacks on his regime which have appeared in the United States press. These attacks have engaged his prestige. Further delay in concluding agricultural sales arrangements will undoubtedly aggravate this situation by supporting the view that these attacks represent United States policy. Tito may thus be led to take some action which could engage our prestige in a way to make it increasingly difficult if impossible for us to pursue policies which have proven to be in our national interest.

Despite Tito's recent statements on economic relations with the United States which tend to be obscure on some points, I believe we should proceed as soon as possible to inform the Yugoslavs of our readiness to provide wheat and other available agricultural commodities. Otherwise unnecessary damage may be done to United States-Yugoslav relations and to the position we have built up in Yugoslavia.

Recommendation/2/

/2/A handwritten notation in the margin of the source text reads: ``approved by JFK."

I recommend that Ambassador Kennan be authorized to inform the Yugoslavs as soon as possible of our readiness to conclude an agricultural sales agreement and to initiate negotiations in the nearest future. Negotiating instructions should be prepared in consultation with the Department of Agriculture with a view to arranging sales of agricultural commodities as indicated above.

Dean Rusk

113. Letter From the Assistant Secretary of State for European Affairs (Kohler) to the Ambassador to Yugoslavia (Kennan)

//Source: Kennedy Library, National Security Files, Yugoslavia. Secret; Official - Informal. A copy was sent to Bundy.

Washington, December 4, 1961.

DEAR GEORGE: We have been giving much thought to our exchange of correspondence--my letter of October 12 and yours of October 27/1/--which go into the basis and rationale of our policy toward Yugoslavia and the assistance programs associated with that policy. There is a great deal in common in our views particularly where both of us come out as regards recommendations for various types of economic assist-ance. In this regard there is more agreement between you and EUR than between either of us and the Director of AID. Yet certain differences exist in each of our approaches. Some of these differences are due perhaps to semantic difficulties in finding the same meaning in a given description or in our failure to develop sufficiently certain concepts in my last letter. In this letter I shall try to reach more common ground by developed explanation and, hopefully, reduce those differences that appear at first sight to exist.

/1/Document 102 and the attachment to 106.

We took the position that our basic policy toward Yugoslavia is a good one, a successful policy over the years, and that it should not be abandoned or changed in a fundamental way. This did not mean that it must always remain identical in scope or details, in implementation, and in courses of action from year to year. Our EUR concept would permit adjustments as circumstances require--adjustments to take account of developments in Yugoslavia or to express our reaction, when necessary in our own interest, to moves of the Yugoslav Government. But this, as we see it, is not a change in our basic policy as presented in my October 12 letter and in our EUR policy review (copy of which I enclosed in my last letter). In fact since 1949 we have had our ups and downs in relations with the Yugoslavs and we have made those tactical adjustments as required. It is also true that our assistance activities have varied considerably from time to time to take account of new developments and we do not believe that the Yugoslavs have a basis for taking for granted the continuation of certain types and amounts of assistance. The continuation of our basic policy does not by any means require the continuation of economic programs without change. We believe, therefore, and I think there is agreement in the Department at least outside AID that the basic aspects of our policy (in premises and purposes) should continue.

As to Yugoslavia's independent position we have never questioned that it is determined today to remain separate from the bloc and we see no prospect unless a great change occurs in the international situation of its going back to Moscow on the old terms of subordination. It is difficult to believe however that Yugoslavia will not need some assistance to take care of contingencies such as the present food stringency created by the severe crop conditions or to adjust its institutions to the requirements of a market economy as in the extensive credits by the West in support of Yugoslavia's reform of its foreign trade and exchange rate systems. The consolidation of its independence and economic development in our view necessitates at this juncture still some support from the West.

The Department has never thought that Yugoslavia should become economically dependent on the US with the expectation of receiving the same forms and amounts of assistance indefinitely. We find it hard to believe that the Yugoslavs have this expectation or desire this although we gather from our experience here that they are not unhappy to receive aid from the US in the form of credits and PL 480 sales. In fact they seem anxious to get it when they need it and give evidence of appreciating such forms of assistance. They have undoubtedly not wanted certain kinds of assistance at various times--for example military grant aid in 1957 and technical assistance in the beginning. We feel sure too that they would like to be in the fortunate position, just as would any nonaligned state, where they would need no assistance at all from other countries. In our judgment their attitude toward receiving assistance from the Soviet bloc in 1956 was about the same. They show, whatever they may say in public speeches, that they know very well we extend assistance to their country for political purposes of our own national interest rather than for some reasons of internal necessity.

In any event our purpose is not to continue various assistance programs for an indefinite period but to move gradually as soon as circumstances permit toward a basically commercial relationship. We would do so in a manner to perpetuate worthwhile activities on a self-sustaining basis and to keep doors open to essential modes of access to the Yugoslavs.

You have yourself recommended against abrupt termination of assistance and with this we agree. The sudden withdrawal or drastic reduction of aid by the US would not be limited to the effects of our government action. Other Western countries would probably be guided to a great extent by our example and the actions of governments would influence private bankers and traders. The total result might well do considerable damage to the Yugoslav economic position. If the West generally was to take a negative attitude toward Yugoslavia, the repercussions might drive Yugoslavia back toward some kind of close connection with the bloc particularly if the policies of the bloc should become less conservative with Soviet acceptance of increasing national autonomy in the bloc and if the bloc held out the promise of economic aid. The bloc did the latter in 1956 and so this does not appear to be a farfetched possibility. In these circumstances Yugoslavia might conceivably become a member of a kind of a Communist Commonwealth. It is any chance of such an eventuality involving Yugoslavia's virtual return to the bloc which we seek to avoid.

In regard to the present direction of Yugoslavia's institutional developments, we believe the evolution of the internal system and Yugoslavia's network of relations with the West, which are becoming institutionalized, are moving Yugoslavia constantly toward a closer and broader association with the West. These developments serve to consolidate Yugoslavia's independent status and make it irreversible. We think we should assist these tendencies and certainly not take actions that might check, impede or decelerate them for an indefinite period.

As we have considered this problem over and over, we end by finding no alternative basic policy that will bring such advantages to the US from the standpoint of our long range interests. We still think this to be the case taking into account the present international situation, the stage of Yugoslavia's development and the policies of the Tito government. Concerning the last, we find no fundamental change in the recent attitude of the Yugoslav Government on international issues. Tito's speech at the Belgrade Conference struck us as setting forth essentially his traditional line except for two important points: (1) his condoning of Soviet resumption of nuclear testing and (2) the assertion that some powers were making a fetish of controls as a pretext for avoiding disarmament. On these points the speech was particularly objectionable to the US and chiefly for this reason the Department suggested that you make vigorous representations at Belgrade. In our view the US in addition should have shown displeasure by some delay and some reduction in extending assistance. This was one of the principal reasons for our pressing for a reduction in developmental lending from $25 - 30 million as contained in the Congressional presentation to $15 - 20 million as submitted in the EUR recommendation to the Secretary. We would also have deferred the PL 480 discussions long enough, although probably not so long as has actually been the case, to support and reenforce the representations you made.

We fully appreciate your view as set forth in your despatch of July 20/2/ that there should have been adjustments in economic assistance to Yugoslavia in any event. We go along with the view that assistance should be adjusted from year to year as the circumstances indicate. Our difference with you on this is on the amount and types of assistance when reductions are made.

/2/Reference is to despatch 41; see footnote 2, Document 97.

We come now to a point where EUR sees things differently from your view. You say ``There can be no question but that Yugoslav policy, like that of Moscow, is aimed generally at the frustration of US efforts in the cold war and the elimination of our country as a major factor in world affairs." and again: `` . . . and we may demand from them the evidence that they feel some concern for the preservation of our power and influence as a factor in world affairs."/3/ If Yugoslav policy were like that of Moscow in seeking the elimination of the power and influence of the US as a factor in world affairs we would find no reason to extend any assistance whatsoever to Yugoslavia any more than to the Soviet Union itself or to a complete satellite like Bulgaria. It seems to us that an appraisal of Yugoslav policy in this way leads to the inescapable conclusion that the US should treat Yugoslavia only as a full satellite member of the bloc and follow the same general policy toward Yugoslavia as toward the Soviet Union.

/3/Ellipsis in the source text.

In our dealings with Yugoslavs here we have not found this to be their attitude nor can we read Tito's speeches to imply the desire to eliminate the US as a power factor. This would not be in the interest of the Yugoslavs since it would leave the Soviet Union the supreme power in the world and in a position then to proceed with its apparent long standing objective in dealing with the heretic regime at Belgrade. It is our impression that the Yugoslavs realize clearly that their position of independence in the world depends in the last analysis on the essential balance of power between the US and the Soviet Union. Tito and other high Yugoslav leaders doubtless desire to see socialism triumph as a system but we gain the impression that many of the lower echelons and younger Yugoslavs do not have the same interest in this development.

To be sure, on international issues the Yugoslav Government takes, and will doubtless continue to take, a position different from ours in most instances. In fact this attitude including Tito's recent expressions of anti-Westernism is not in any sense new. This is partly because they are communist and partly because they are neutralist. The score can be counted in the UN and there they usually line up with India, Indonesia and the UAR. Sometimes in fact India causes us more trouble. We fully appreciate of course the unalterable Marxism of Tito and his desire to see socialism spread everywhere together with his conviction that it will.

Regarding the question of our influence on Yugoslavia's development a powerful force is certainly at work in Yugoslavia's evolving situation making for pragmatic departures from the Soviet model. At the same time we are convinced that our exchanges and contacts with the Yugoslavs, many of which have depended on our economic assistance, have had an important formative effect on the evolution of the Yugoslav system since 1949. The Yugoslavs, we agree, do not shape their institutions or plans in order to get our economic assistance. In receiving our assistance however they have made numerous visits to institutions, organizations and plants in the US and bought many of our products. They have developed continuing contacts with individuals, firms and institutions. They have had a chance to be exposed to this vast country and its great economic system. They have been influenced, whatever their interests or wishes. We have seen this time and again in talking with them here. This is especially true as regards the middle and lower echelons who will step into influential positions in the future--ones who desire to make changes and move ahead. Technical assistance, which is mostly an exchange program, has perhaps most of all provided a channel for this kind of influence to make itself felt.

Then too with the assistance from us and other Western countries the Yugoslavs can take steps to change their system in a Western sense which they could not otherwise do so soon or at all. In agriculture it seems clear to us that our assistance has actually relieved the lot of the peasantry (as well as of the population as a whole); otherwise in the effort to achieve large unit efficiency of operation the regime might well have applied pressure for collectivization by administrative means. We are frankly at a loss to understand to what you refer in saying that our PL 480 transactions allow Yugoslavia to indulge in ideological experiments in agriculture or to cease efforts to increase agricultural productivity. We had thought that the Yugoslavs had made considerable progress for a communist country in increasing agricultural production through the introduction of new seeds, the use of machines and fertilizers, and the utilization of peasant incentive. The Yugoslavs still have a way to go in achieving a rational price system and, of course, they still have not licked the problem of weather.

We are puzzled by the comment that one of the results of our extensive aid has been to relieve the Yugoslavs of the necessity for coming to grips with the problem of their economic relations with Western Europe. We had rather understood that they had built up extensive and healthy economic relations with Western Europe, a development which the US has welcomed and encouraged over the years as a means of associating them more closely with the West. We had believed that our assistance had contributed to this favorable growth. The trade between Yugoslavia on the one side and Western Germany and Italy on the other, for example, has expanded greatly and we hope it will continue to flourish. We realize that the Yugoslavs have constant balance of payment problems, yet these seem due to their extensive investment, procurement of capital equipment abroad and rapid economic growth rather than to essential weakness of the national economy. They naturally push for the sake of these interests their balance of payments margins to the limit and they could reduce the scope of their problem if they were to limit the rate of their capital expansion.

The Yugoslav activities in the underdeveloped countries are also a matter of interest and concern to us. While granting there is a political purpose in these activities, we do not overlook the economic motive as well. The rapidly growing Yugoslav industrial output demands markets and they are not in a position to compete so well in Western markets as Western industries since they have broken away only in part from the noncompetitive features of the typical communist system. Their capital and technical products however are desired in the markets of the underdeveloped countries but can be purchased in any quantity only on the basis of long term credit. Hence we would see in the extension of such credits for the sale of capital goods to underdeveloped countries partly a desire of the Yugoslavs to find markets for their products. Although we would certainly not wish to promote Yugoslavia's role in this area, if any communist country has to trade with these underdeveloped countries it seems better for Yugoslavia to do it than for one of the bloc countries. We have seen in a number of instances Yugoslav competition with bloc countries in Africa and the Middle East. Moreover, there is good evidence that one of the things the Yugoslavs do in the underdeveloped countries is to point out the danger of becoming economically dependent upon the Soviets and the Chinese Communists.

As I come to the end of an already long letter I feel that if one or two of the principal points made in your letter are valid, no justification exists for extending any further assistance to Yugoslavia and for the continuance of our basic policy toward Yugoslavia. We cannot feel that this should be our conclusion. We think we have gained important benefits from that basic policy and continue to do so. We do not get all we would like out of Yugoslavia's situation. It is a communist state but not like the bloc states; it has evolved a long way from being the model satellite it was in 1948. The doctrinal cleavage between even Tito and Moscow over separate roads to socialism and a system involving more humanistic, individualistic and pragmatic concepts is deep. And Tito is not Yugoslavia. There are different Yugoslavias; they are changing and I am sure will continue to change. We should do what seems basic to our long range interests to assist this evolution in a Western direction and to win the younger generation in support of this evolution. That perhaps is the essence of our views on our policy toward Yugoslavia.

Sincerely,

Foy D. Kohler/4/

/4/Printed from a copy that bears this typed signature.

114. Airgram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.68/12 - 2261. Confidential. Drafted by Kennan.

Belgrade, December 22, 1961.

A - 200. Subject: Conversation with Edvard Kardelj and Leo Mates. Ref: Embtel 898, December 14, 1961./1/

/1/Telegram 898, December 14, summarized Kennan's meeting with Kardelj. (Ibid., 668.00/12 - 1461)

On December 13, 1961, Mrs. Kennan and I went to tea with Vice President Edvard Kardelj and his wife, at their invitation. Tea was offered at their own home. The only other people present were Mr. Leo Mates, Assistant Secretary of State for Foreign Affairs, and Mrs. Mates. After tea with the ladies, the men withdrew and we had a long discussion of Yugoslav foreign policy and Yugoslav-American relations. We remained in conversation, in all, for three hours. While the ladies spoke English, my own conversation with Kardelj was mostly in Russian, occasionally in English.

One of the subjects discussed was American aid. Kardelj expressed the hope that within two or three years Yugoslavia would be substantially self-supporting in wheat and would require no further extensive PL 480 aid. Serious mistakes had been made this year in handling the problem of subventions in connection with agricultural production. They had ceased too early to prime the pump. These mistakes were now being corrected. He was fairly confident the results would be effective. However, the effects of this summer's drought would be even more severe in 1962 than it was in 1961, so too much could not be expected from the 1962 harvest.

As for the other forms of aid, Mr. Kardelj attached high value to the DLF loans. With respect to the work of private relief organizations, he showed no particular interest. I doubt that he knew what I was talking about. As to Technical Assistance, he thought that this should not be considered a permanent feature of United States-Yugoslav relations. He felt, however, that there was a particular need at this time for Technical Assistance in the field of agricultural economics.

Kardelj did not conceal Yugoslav disappointment with Khru-shchev's failure to reciprocate the support they had tried to give him in major questions of world affairs. The Yugoslavs had come recently to suspect that he was actually embarrassed by their efforts. He was inclined to regret that Vukmanovic-Tempo had been sent to the WFTU meeting in Moscow. He thought this had been premature.

Kardelj had the impression that Khrushchev was still lacking in adequate support in the Soviet Apparat. His real strength lay in his sense of touch with the common people. The Soviet-Chinese conflict, he thought, was too profound ever to be entirely healed. It would inevitably become deeper in the future.

I told Kardelj of our unhappiness over the anti-Western and anti-American extremisms of the Yugoslav press. Kardelj did not deny that there had been distortions here. I gathered he proposed to use his influence to improve matters. [The editor of Borba, Dr. Joze Smole, telephoned me a day or so later to say he wished to arrange a dinner for me next week.]/2/

/2/Brackets in the source text.

The Yugoslavs had plainly been stung by the Secretary's statement on September 18 that Yugoslavia had had a divisive influence on world communism, and was a source of dissension within the communist bloc. Kardelj pleaded that we should regard Yugoslavia as a country with which our relations were worth cultivating for its own sake, and not as an instrument to be used for tactical purposes. I said that this represented my own growing conviction, as I lived and learned in this country. I hoped the Yugoslavs, too, would learn to see in the United States something more than a bargaining backstop for their relations with Russia.

Tito's speeches were not mentioned. I sensed that the Yugoslavs wished only that these should now be forgotten.

In general, the interview was exceptionally cordial. In my opinion, it unquestionably marks a sincere effort to repair fences in our direction.

Kennan

115. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.68/1 - 562. Secret.

Belgrade, January 5, 1962, 6 p.m.

972. Lunched this noon alone with Foreign Minister Koca Popovic and had long and frank discussion problems of Yugoslav-US relations. Highlights as follows:

1. Yugoslav-Soviet relations. Popovic said it was his conviction Yugoslav-US relations were actually much better than they appeared on surface to be; Yugoslav-Soviet relations, on other hand, much worse. Split of 1948 had run deeper than most of us in West realized. Never had chances for complete understanding between Yugoslavia and USSR been poorer than today. As example of Western misreading this situation he cited Sulzberger story of rumored Soviet-Yugoslav deal over Albania and said this reflected fantastic misunderstanding real nature Yugoslav-Albanian relations. He inferred any such thing was far beyond realm of political possibility. On my reminding him of abundant evidence of Yugoslav concern for Soviet opinion and on emotional involvement of leading Yugoslavs with affairs of Socialist world, he said this represented form of pro-Russian romanticism which had both traditional and more recently political roots, which was a passing phenomenon and not in accord basic trends Yugoslav society, by which we should not be misled. As Socialists they had to regard Russian revolution and subsequent emergence of bloc of Socialist countries as something which, whether or not fortuitous in origin, was now permanent fact of international life. They were more concerned than we were with what occurred within this bloc, regarded Soviet Communism as preferable to Chinese and Khrushchev as preferable to other Russian Communists. Within their possibilities, they acted accordingly.

With obvious but not specific reference Tito's recent statements, he pleaded that we not attach long-term significance to things said within context of a specific moment and for achievement of momentary effect. He had recently had bitter arguments with Yugoslav editors over their tendency to make this same mistake.

2. Germany. He agreed readily that Yugoslav press had recently been guilty of much extremism in treatment German problems. German press reaction to Vracaric case/1/ had actually contained many positive items [but?] Yugoslav press had failed to mention them. For this, too, he had taken editors to task, pointing out by this tendentious treatment they were encouraging precisely those tendencies they feared in Western Germany. He thought the truth lay somewhere between Yugoslav exaggeration dangers German militarism and our underestimation of it. He spoke so eloquently of folly of Yugoslavia's attempting to take upon herself task of combatting nationalistic trends in Germany that I suspect he was personally responsible for recent change Yugoslav press line this subject. In this connection he mentioned particularly damage to German tourist traffic in Yugoslavia and other economic exchanges resulting from Yugoslav polemics.

/1/On November 11, 1961, Yugoslav authorities arrested a West German businessman, L. Vracaric, and charged him with war crimes. Following protests from the West German Government, he was released.

3. Ustashi activities. I confessed my own chagrin over activities Ustashi and other violent elements in US interested in embarrassing Yugoslav-US relations and explained to him difficulties we had in controlling this problem. He said while he would personally place this perhaps 17th on list of US-Yugoslav difficulties there were many others who would place it much higher and I was right to give it importance. Since he mentioned Artukovic, I said I could not conceive that Yugoslavia wanted an Eichmann case of its own at this moment, or that US-Yugoslav relations would be benefited by Artukovic's forced return to Yugoslavia. To this he readily assented, said we would notice Yugoslavs had refrained from exploiting Eichmann trial in this connection. However, Artukovic would continue for long to rankle in many Yugoslav minds. Some people would never understand how we could harbor such a person if we ourselves wished well to Yugoslavia. He added incidentally there were now evidences of Ustashi infiltration in French OAS as well as other European neo-Fascist activities.

4. Colonialism. On this subject we were farthest from agreement. In response my statement we would prefer to see more use self-determination of principle governing liquidation Colonialism, he said this would lead to impossible fragmentation of Africa and other areas. World had no choice but to create boundaries artificially and encourage formation larger national units.

5. Cold war. He viewing emotional preoccupations of Soviet-American conflict as principal source of difficulty for US-Yugoslav relations, since they lead to grievous oversimplification of extremely complex Yugoslav position. Cold war interfered this way not only in our relations, but also in Yugoslavia's relations with USSR.

Earnestly request this information be tightly held and Popovic's name protected, since he talked with much frankness and these statements could easily be used to affect adversely his personal and political position.

Kennan

116. Memorandum of Conversation

//Source: Department of State, Central Files, 611.68/1 - 1262. Confidential. Drafted by Mudd on January 12 and approved in S on January 18.

Washington, January 8, 1962.

SUBJECT

US-Yugoslav Relations

PARTICIPANTS

The Secretary

Mr. Marko Nikezic, Yugoslav Ambassador

Mr. Robert C. Mudd, EE

Ambassador Nikezic called on the Secretary by appointment at 3:30 p.m. on January 8. After a brief exchange of amenities the Ambassador began the conversation by thanking the Secretary for the decision to proceed with the negotiations on PL 480 assistance. He said the food made available to Yugoslavia under the agreement just concluded was of great assistance to his country. The Secretary replied that the US was happy to be able to proceed on this matter despite opposition in some quarters to US assistance in any form. After outlining in some detail the basis of Yugoslavia's foreign policy, Ambassador Nikezic informed the Secretary that he was leaving Washington on January 15 to return to Belgrade for a period of three to four weeks consultation. He said he was certain that on his return he would be asked by Yugoslav authorities about the extent to which the US is prepared to accept Yugoslavia as a non-aligned country which is pursuing an independent foreign policy. He said Belgrade would also be interested in the US attitude towards Yugoslavia's requests for further economic assistance.

The Secretary replied that Yugoslavia's independence is just as important in the US view now as it has always been in the past. The US does not expect Yugoslavia to side with the West. Yugoslavia's non-alignment, and for that matter the non-alignment of other countries, is satisfactory to the United States. From time to time as US-Yugoslav relations develop one is likely to touch on an exposed nerve of the other. That there are differences between the US and Yugoslavia is a political fact of life. We have, for example, different views on Berlin, and Cuba, which the Yugoslavs regard in a different light, is of special concern to the US. These differences, however, do not place any insurmountable obstacles in the way of the development of positive and friendly relations. The underlying fact of importance is that Yugoslavia is working out its own national future as it sees fit.

As far as economic assistance is concerned, the Secretary said that the organization of the new agency AID and the necessity to take into account new legislation had slowed down consideration of Yugo-slavia's requests. We are currently engaged in a review of all of our continuing economic programs, including those of several allied countries, such as Norway, Denmark, Greece, and Turkey. We want to make our future programs more efficient by profiting from the experience of the last fifteen years. As the Ambassador is undoubtedly aware, many new demands are being made on US assistance resources, particularly from the under-developed areas. We hope to have a decision soon on the Yugoslav requests which must be weighed against those of other countries and in the light of the total resources available.

Subsequently, during the course of the conversation Ambassador Nikezic made the following points: (1) the USSR had opposed the calling of the Belgrade Conference and had worked actively through Guinea and Cuba to sabotage it; (2) Yugoslavia should be accepted for itself and not as an instrument to be used in the cold war; and (3) he agreed with the Secretary's point that the US and Yugoslavia should find ways to cooperate on things which they have in common and to insulate themselves where they do not.

The Secretary observed at one point that he felt the Yugoslavs had a tendency to regard the USSR as sensitive and the US as not. For this reason, Yugoslavia tends to take the US too much for granted too often. The point is, he said, that the US should not be pushed too far. Ambassador Nikezic remarked wryly that after the Belgrade Conference he did not believe that the Yugoslavs would be inclined soon again to abuse US tolerance.

In closing the discussion of US-Yugoslav relations Ambassador Nikezic said that the Yugoslavs had analyzed US actions during and after the Belgrade Conference. He had discussed US reaction to the Belgrade Conference with Foreign Minister Popovic during his last visit to this country. They had concluded that Yugoslavia's action at the time of the Conference had been interpreted in this country as evidence of a shift in Yugoslav foreign policy. He wished to emphasize that no shift had taken place in Yugoslav foreign policy. The truth of this assertion, he declared, would be borne out by an objective analysis of Soviet-Yugoslav relations.

117. Memorandum From Secretary of State Rusk to President Kennedy

//Source: Kennedy Library, National Security Files, Countries Series, Yugoslavia. Secret.

Washington, undated.

SUBJECT

U. S. Policy and Assistance Programs Toward Yugoslavia

Attached for your use at the meeting on Yugoslavia to be held Monday, January 15, is a paper with three annexes embodying the Department's recommendations on U.S. policy and assistance programs toward Yugoslavia. Annex A is a review of U.S. policy. Annex B is a paper on U.S. military sales to Yugoslavia. Annex C deals with export control policy toward Yugoslavia./1/

/1/The report and annexes are not printed.

Our principal recommendations are given on pages three and four of the attachment and can be summarized as follows:

1. Technical Assistance: A technical assistance program in the magnitude of $500,000 to $750,000 should be continued in the current fiscal year under the Development Grant category of AID funds. The desirability of continuing technical assistance, if any, beyond FY 1962 will be the subject of review after an evaluation by Ambassador Kennan of the effectiveness of the program.

2. Development Loans: We will encourage Yugoslavia to rely henceforth on lending sources other than AID, while indicating the willingness of the U.S. Government, as a transitional measure, to accept further loan applications for consideration. Within the U.S. Government it would be understood that loan assistance would be in the range of $10 million to $20 million of which the DLF portion would not exceed $10 million. The Export-Import Bank will be requested to give priority attention to Yugoslav applications. The terms of DLF loans should approach those of the Export-Import Bank.

3. P.L. 480: P.L. 480 agreements with Yugoslavia should be considered from time to time to meet minimum Yugoslav consumption requirements. With an increasing shift in the future from Title I to Title IV, Title III activities should be phased out over the next several years.

4. Military Sales: We should continue to sell Yugoslavia military equipment and spare parts and to train Yugoslav military personnel in the U.S.

5. Export Licensing: Yugoslavia should be considered on the same basis as non-Soviet Bloc nations for export licenses.

We understand that the unresolved inter-agency issues relate primarily to export financing. Defense and Commerce appear to believe that more severe export license review standards should be applied to Yugoslavia. In addition, due to limitations of time, the recommendation with regard to the Export-Import Bank has not been discussed with the Bank.

Dean Rusk/2/

/2/Printed from a copy that bears this typed signature.

118. National Security Action Memorandum No. 123

//Source: Kennedy Library, National Security Files, Countries Series, Yugoslavia. Secret. Copies were sent to the Secretary of Defense, Secretary of the Treasury, Director of the Agency for International Development, Director of Central Intelligence, Director of the Bureau of the Budget, and President of the Export-Import Bank.

Washington, January 15, 1962.

MEMORANDUM TO

The Secretary of State

SUBJECT

Policy Toward Yugoslavia

As a result of discussions with representatives of the interested departments on Monday, January 15, 1962, at 5:15 PM, the President reached the following decisions:/1/

/1/No record of this meeting has been found.

1. Technical Assistance--A technical assistance program of the magnitude of $500,000 - $750,000 should be continued in the current fiscal year under the Development Grant category of AID funds. The desirability of continuing technical assistance beyond FY - 62 will be the subject of review after an evaluation by Ambassador Kennan, who will submit a rounded recommendation.

2. Loan Assistance--The U.S. will grant development loan assist-ance of about $10 million in FY - 62, and it is hoped that the Export-Import Bank will give priority attention to Yugoslav applications for additional loan funds up to $10 million. Terms of DLF loans should approach those of the Export-Import Bank. The problem of appropriate levels of assistance for FY - 63 will be reviewed by the Department of State, but meanwhile the Government will plan to go ahead with a modest level of development loan assistance in FY - 63. The President does not wish an abrupt cut-off in this kind of aid at the end of FY - 62.

The United States Government will also seek to increase the interest of other Western governments--especially Italy--in credits to Yugoslavia.

3. PL 480--PL 480 agreements with Yugoslavia should be considered from time to time to meet minimum Yugoslav consumption requirements. It is expected that there will be an increasing shift from Title I to Title IV assistance, while Title III assistance will, as recommended, be gradually phased out over a period of years.

4. Military Sales--Continued military sales to Yugoslavia are approved to the extent that they amount to no more than reasonable spare parts and supplies for existing equipment. It is not expected or desired that Yugoslav military personnel will receive training in the United States, and future Yugoslav applications for other new military purchases should be reviewed case by case.

5. Export Licenses--Yugoslavia should be considered on the same basis as non-Soviet Bloc nations for export licenses, on the understanding that license applications will be reviewed with appropriate care, and that appropriate efforts will be made through the Embassy to ensure against transshipments, to the Bloc, of goods falling within COCOM and U.S. strategic criteria.

In reaching these conclusions, the President made the following additional requests:

1. That Ambassador Kennan should write a brief explaining the reasons for U.S. aid to Yugoslavia. This brief should then be used as appropriate in defending the program before Congress and in public statements.

2. That the Italian, Austrian and Greek Governments should be asked for their opinions with respect to policy toward Yugoslavia. If, as we expect, these comments support the current general line of U.S. policy, they may also be helpful in explaining our policy within the United States.

McGeorge Bundy/2/

/2/Printed from a copy that bears this typed signature.

119. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.00/1 - 2562. Confidential.

Belgrade, January 25, 1962, noon.

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.

/1/Telegram 1043, January 25, summarized Kennan's discussions with Popovic that day. (Ibid.)

Kennan


120. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.68/2 - 1462. Confidential.

Belgrade, February 14, 1962, 11 a.m.

1122. Assistant Secretary for Foreign Affairs Ivo Vejvoda told DCM last night that Yugos, now they have examined full text of Rusk February 5 statement,/1/ are much disturbed. Had thought after Ambassador's talks with Kardelj and others that Yugo's independence and good Yugo-US bilateral relations were accepted as good in themselves. Now they find statement treats Yugo independence as tool in cold war. Communist Chinese had printed full text Rusk statement, as yet without comment, but with clear implication this will provide further fuel for attacks on Yugo as tool of imperialists. Yugos are sensitive people and disturbed by implication they being used to achieve cold war objectives of West. Statement, while emphasizing Yugo independence, in fact tends to cause Asian and African countries to question Yugo independence, will weaken Yugo influence in those areas, and complicate relations with Eastern Bloc.

/1/For text, see Department of State Bulletin, February 26, 1962, pp. 346 - 348.

Vejvoda said he had not expected to see American officer that evening and had not prepared approach but February 5 statement was subject of extensive discussion in Foreign Secretariat and we might hear more of it from others.

Department will note similarity Vejvoda's point to that presented first paragraph Ambassador Kennan's paper brought by him to Washington as basis for talks on Yugo with British./2/

/2/Not found.

Kennan

121. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.00/3 - 2362. Confidential. Repeated to Bonn and Moscow.

Belgrade, March 23, 1962, 6 p.m.

1283. From several indications we gain impression Yugoslav leaders are just now in throes of some sort of crisis of decision with possible far-reaching implications for both domestic and foreign policy.

We are reliably informed that last week's session of expanded plenum party executive committee under Tito's chairmanship was devoted entirely to considering Yugoslavia's economic plight and its many bitter implications. No decisions have yet been announced, and it is possible no final ones have yet been taken.

Am confident that policy of economic liberalization which prevailed throughout 60 and most of 61 is now under heavy critical pressure; and that [garble] persons, in many instances Slovenes and followers of Kardelj, who sponsored or favored its introduction, are in difficult position. Even Todorovic may be affected.

It is plain that barring some new major source of external assistance severe restrictive measures will have to be taken to bring economy better under control and improve finance external payments. These measures will presumably affect adversely both living standards and rate of growth. But even this will probably be insufficient to meet external payments problem which, as recently reported, is now assuming serious forms, particularly in inability of government to meet promptly current external obligations and to assure adequate imports raw materials and component parts for Yugoslav export industries.

Leading Yugoslavs have recently shown themselves preoccupied and more reticent than usual about major problems Yugoslav policy. Efforts to get answers from them on pending questions economic collaboration have encountered unusual difficulties and delays. Technical assistance program for 62 has been pending for nearly two months with no reply. Attempts to elicit even informal comment unsuccessful. Although some textile factories are understood reduced to 30 percent capacity operation for lack raw material, we have now been waiting nearly three weeks for reply our offer to make available 50,000 bales under Title IV, PL 480. External debt statement, which has repeatedly been promised us since December 1960 and which they know would be helpful to us in meeting applications developmental loans, still not forthcoming. We have no evidence Yugoslavs have yet made their wishes fully clear to AID or Export-Import Bank. They have as yet given us nothing specific here. Yesterday they finally rejected long-standing Canadian offer to help with construction oil refinery at Pancevo, although they are just in throes of sending high-powered commercial delegation to Canada to stimulate trade. All in all their behavior is hesitant and partly contradictory, and contrasts sharply with eagerness for Western aid they might normally be expected to show in present difficult situation.

Have noted no particular signs of irritation against our government, this mission, or myself personally. They seldom take initiative in communicating with us; but this is standard practice. Have not even had any direct complaints re curtailment of AID programs, though there have been various warning hints that in circumstances they would have to look elsewhere, including eastwards, for help. Have impression they realize our present plans represent limit of what is possible in light public and Congressional opinion in US.

Possible hypotheses recent Yugoslav behavior are these: (1) that Tito, having been preoccupied with Africa and relations with unaligned nations throughout 61 and until end February 62, has only recently become aware full seriousness balance of payments situation, and has put some sort moratorium on current decisions, particularly those involving new obligations, until future policy course fully determined. (2) That Yugoslavs are preparing some major appeal to Western countries and international organizations to increase their maneuverability in dealing with their present payments situation, and detailed decisions being held up pending completion this approach. (3) That discussions or soundings are being taken with Russians, in deference to which other decisions, particularly ones concerning us, are being held in abeyance. I think we must be prepared for possibility that in light narrowing dimensions our assistance, and increasing severity financial terms, Yugoslavs may be approaching point where they would appreciably facilitate achievement of alternative solutions. I personally do not see much probability of this last at present time. Yugoslavs are clearly disturbed and miffed over continued failure Gromyko to return Popovic visit. Their pride is such that I cannot conceive their going to Moscow as supplicants for economic aid so long as this courtesy is being withheld. But their distress is so acute that no one can entirely vouch for their conduct. And it may of course be that a date for Gromyko visit has been fixed confidentially but not yet announced.

Kennan

122. Memorandum From David Klein of the National Security Council Staff to the President's Special Assistant for National Security Affairs (Bundy)

//Source: Kennedy Library, National Security Files, Countries Series, Yugoslavia. Secret; Personal. Initialed by Klein.

Washington, April 17, 1962.

SUBJECT

Belgrade's 1397/1/

/1/In telegram 1397, April 16, Kennan commented on the visit of Soviet Foreign Minister Gromyko to Belgrade. (Department of State, Central Files, 033.6168/4 - 1662)

Since this is my day for candor, I might just as well exploit it.

I read Ambassador Kennan's telegram No. 1397 with some dismay. While most of his facts are probably indisputable, his conclusions are questionable.

Kennan clearly has a personal problem with Tito, probably not unrelated to the Belgrade Conference experience and it seems to color many of his conclusions.

The Ambassador argues that as long as Tito is on the scene, our relations with Yugoslavia will remain difficult. I do not disagree but I would go further. As I see it, as long as a Communist regime is in power in Belgrade, our relations with Yugoslavia will be difficult. Tito obviously governs Yugoslavia but there is no evidence to support the view that our problems with Communist Yugoslavia will end with Tito's departure. We can live with this situation.

There are also certain curious details in the Ambassador's commentary. He sees this as a peculiarly propitious time for a Soviet-Yugoslav rapprochement, yet he goes on to say that although there is evident Yugoslav eagerness, this is not reciprocated by the Soviets.

The Ambassador also noticeably avoids any discussion of the recent Sino-Soviet developments and talks in terms of this problem as it appeared several months ago. The fact is that so long as Moscow and Peiking can arrive at some modus vivendi, Tito's maneuverability in playing the Soviets against the Chinese is clearly limited.

In my view the most troublesome element in Kennan's message is that he seems to be carefully building up a case for a basic revision in our Yugoslav policy. The direction in which his thinking seems to be going is that so long as Tito is looking increasingly toward Moscow and the Bloc, the United States should take a second look at its commitments to Belgrade.

There is nothing wrong in reexamining our policy and the considerations that went into making that policy. But we should also recognize that our policy has not been directed at converting Yugoslav political thinking, but rather in keeping it tied, to the extent possible, to the West and thereby limiting its dependence on the Soviet Bloc. That policy has been successful. Therefore, before we begin to move off this line, I think we should be certain that we are not doing the very thing that concerns us most--pushing Yugoslavia closer to the Bloc.

123. Telegram From the Department of State to the Embassy in Yugoslavia

//Source: Department of State, Central Files, 768.00/5 - 262. Confidential; Niact. Drafted by Mudd; cleared by Tyler, EUR, and S/S; and approved by McGhee.

Washington, May 2, 1962, 3:04 p.m.

1106. Embtels 1455, 1456, 1458./1/ We have given careful consideration your reftels and, on balance, have concluded US interests best served by approach aimed at forcing Yugoslavs either: (a) to drop their thinly-veiled insinuations and allegations re official US involvement in events leading up to Djilas rearrest;/2/ or (b) to produce specific and concrete evidence to back up these charges. We agree with you, particularly since trial of Djilas obviously in offing, that it is impermissible that such unsubstantiated charges made in official Foreign Office discussions should be allowed to stand unanswered by US Government. We believe however that, in view imminence Djilas trial and large number imponderables inherent this situation, it is preferable for US approach to be oral rather than written and to Mates who first raised question rather than to Popovic. Accordingly, at your discretion, you are authorized to approach Mates along following lines:

/1/In telegram 1455, April 30, Kennan reported that he had denied Mates' charge of frequent visits to Djilas by ``a member of the official American community." The telegram forwarded the draft text of a proposed letter to the Yugoslav Foreign Ministry stating that no unsanctioned visits had taken place. (Ibid., 768.00/4 - 3062) Telegram 1456, April 30, reported that Yugoslav officials believed the Embassy had provoked the actions leading to the Djilas arrest. Kennan reported that the Embassy had not been involved. (Ibid.) In telegram 1458, May 2, Kennan reported that the acting director of American Reading Rooms in Yugoslavia, a non-government official, had met with Djilas. (Ibid., 768.00/5 - 262)

/2/Djilas, who had been released from prison in 1961, was rearrested following the publication of his book Conversations with Stalin. He was charged with revealing State secrets.

Since your April 16 conversation with Mates and your subsequent letter to him denying any incorrect behavior on part members US Embassy staff in Djilas affair, you had hoped matter would be dropped by Yugoslav authorities. Instead, Yugoslav authorities have chosen to raise matter again in official FonOff conversation with member Embassy staff, even going so far as to suggest that only public denial US involvement Djilas affair by authoritative US source would be convincing. US Government has no choice but to take serious view of unsubstantiated Yugoslav charges re US involvement in events leading up to rearrest of Djilas as well as Yugoslav insinuations re alleged US motives. US Government has no knowledge of circumstances leading up to rearrest Djilas beyond public statements issued by Yugoslav authorities. US Government cannot permit allegations to stand that conduct US officials in any sense has been such as to give cause for reproach or complaint on part Yugoslav authorities. We must therefore request that Yugoslav Government, if it has any information of a specific and concrete nature that would indicate to contrary, present such information to US Government. If Yugoslav Government has no such specific information we suggest that matter be dropped.

Ball

124. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.561/5 - 362. Secret. Repeated to Moscow, Sarajevo, and Zagreb.

Belgrade, May 3, 1962, 11 a.m.

1459. Appearance of twenty newly acquired Soviet tanks of fairly recent vintage and one Soviet-type assault gun at May Day parade here has naturally aroused much comment among four [foreign?] observers, since with exception of a few helicopters these are the first major item of military equipment known to have been acquired here from Soviet sources since 1948. While authentic information is not available, we think it likely that acquisition these items dates back to tension in US-Yugo relations following Belgrade conference and to difficulty encountered by Yugos at that time in discussing further deals for purchase US military equipment. Lack of dollars and other Western currencies, and existence unused clearing balance with Soviet Union, may have been further Yugo motive for purchase Soviet tanks. Perhaps equally or more significant than Yugo willingness to purchase Soviet tanks is Soviet readiness to supply them to Yugos. Other neutral states besides Yugo have received Soviet weapons, but since 1948 Soviet Union has not been willing send military equipment here. Having purchased these items, it is probable, in order to avoid offending Russians. There are also signs, however, of a deliberate desire in some Yugo quarters to make a demonstration of some sort in exhibiting these items. While Yugo military circles deny that this signifies any change in Yugo political or military policy, we think Yugo Government may not have been averse in trying to arouse in Western circles some alarm over results of relative cold-shoulder which Western countries have recently turned to Yugo and her needs with respect to credit and facilities for military purchases.

On top of this Tito yesterday morning, May 2, just prior to his departure for Split (purpose not announced) received Soviet Ambassador Yepishev and conducted with him, according to official announcement, a long conversation. This deserves careful attention. Yepishev had accompanied Gromyko back to Moscow on April 21. He appears to have returned Belgrade April 30, evidently demanded urgent interview with Tito and was fitted into latter's schedule at only possible point between strenuous May Day ceremonies and departure Dalmatia later Wednesday morning. Conclusion inescapable that Soviet Government, after receiving Gromyko's report on visit, decided to make further communication of urgent nature to Tito. This could have been, and in my view most probably was, effort to enlist Yugo support and influence with neutrals for some new Soviet move re testing (Department Circular telegram 1857)./1/ But we must remember Yugos had evidently pressed hard and vainly during Gromyko visit for discussions on economic problems. Information now available indicates with fair degree reliability Yugos urged, in particular, that special negotiations be instituted at relatively high political level to discuss closer association Yugo with COMECON.

/1/Circular telegram 1857, April 30, reported Soviet efforts to call a special session of the General Assembly on disarmament. (Ibid., 700.00(S)/4 - 3062)

While Russians would scarcely be so crude as to couple these two things explicitly for bargaining purposes, there are many ways to skin such a cat. Yugo financial distress is acute. So is concern here over effects on Yugo of Common Market. XXII Congress and Gromyko visit have unquestionably whetted Tito's hopes for accommodation with Bloc on terms that would not require Yugo concessions on party-ideological plane. While he would probably like retain outwardly good relations with West to extent possible, he would, in my opinion, sacrifice much even in terms of relations with US to obtain accommodation on such terms. In such circumstances must reiterate we can take nothing for granted concerning Yugo policies in coming period.

Kennan

125. Editorial Note

On May 3, Executive Secretary of the Department of State Lucius D. Battle sent a memorandum to McGeorge Bundy, the President's Special Assistant for National Security Affairs, spelling out the consequences of denial of most-favored-nation treatment to Poland and Yugoslavia. For text of the memorandum, see Document 59.

126. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.00/5 - 762. Confidential.

Belgrade, May 7, 1962, 8 p.m.

1484. Embtel 1462./1/ In private conversation with Foreign Minister Popovic on May 5, I took occasion to express my concern over the suspicions that had been voiced by Yugoslav officials of complicity of our government in events leading to rearrest of Djilas./2/ Popovic reiterated that these statements had not been official and that there had been no intention to make any formal representation to us over this matter. He believed, he said, that official American circles had not been involved; nevertheless, there had been certain Americans who had had an interest in stirring up this sort of trouble.

/1/In telegram 1462, May 3, Kennan reported on discussions with Mates regarding the Djilas affair and the apparent confusion within the Yugoslav Foreign Ministry over the level of its official reaction. (Ibid., 768.00/5 - 362)

/2/He was rearrested on April 7.

We did not go into this further. I now think it unlikely that anything directly embarrassing to our government will be said at the Djilas trial, even if latter is held in public. Exchanges we have had thus far would make it difficult for Yugoslavs to raise such charges. This would not however, preclude vague hints that Djilas was influenced by American elements hostile to Yugoslav regime and permitted himself to become their tool.

Kennan

127. Memorandum of Conversation

//Source: Department of State, Central Files, 611.68/5 - 2962. Confidential. Drafted by Vedeler and approved in the White House on June 8.

Washington, May 29, 1962.

SUBJECT

Meeting with Yugoslav State Secretary for Foreign Affairs

PARTICIPANTS

US

The President

Foy D. Kohler, Assistant Secretary

for European Affairs

George F. Kennan, Ambassador to

Yugoslavia

Harold C. Vedeler, Director, Office

of Eastern European Affairs

LS--Mr. Glenn

Yugoslavia

Koca Popovic, State Secretary for

Foreign Affairs

Marko Nikezic, Ambassador to US

During his visit to Washington the Yugoslav State Secretary for Foreign Affairs, Mr. Koca Popovic, met with the President today for 70 minutes in a frank discussion principally concerning US-Yugoslav relations, Soviet-Yugoslav relations, and Yugoslav positions on international issues.

In response to the President's question about his trip to Latin America, the Foreign Minister said that he was very interested in the process of development in the countries visited; Brazil, Bolivia, Chile, and Mexico. He agreed with the President on the vitality and dynamism in the development of Brazil, where there was a growth rate of 4 to 5% a year in spite of great inflation, in contrast to the stability but depression in Bolivia.

The President asked where the US and Yugoslavia were going together and what was the prognosis and prospects for our relations. He subsequently raised a number of subsidiary questions related to this theme.

The Minister thought that our relations were not bad and were developing. Because of the complex policies both of Yugoslavia and of the US it was not too surprising if some misunderstandings arose. It must be borne in mind that the Yugoslav purpose above all is to maintain independence. At the present time our two countries are engaged in putting their relations on a realistic basis. This is a necessary development.

In reply to the President's question about a realistic basis for relations between Communist Yugoslavia and non-Communist United States, the Minister said it was important not to exaggerate ideological differences and not to use ideology to justify positions on international issues. The President wondered in this connection what the real differences, beneath the cloaking in ideology, were between the four regimes--Soviet, Chinese Communist, Yugoslav and Albanian--and whether the Minister considered nonideological factors more significant than ideology in relations among these states. In explaining these differences the Minister pointed to the differences in political conception, in policy, in interests, in development and in economic matters, especially as concerns the utilization of resources available to the Bloc and more specifically the extension of aid from Bloc states to China. He suggested therefore that ideology was an after effect of those factors and that ideological difference was not as important as it seemed.

The President asked why the Chinese Communists attacked Yugoslavia. The Minister indicated it was no secret that there were bigger things behind the Chinese attitude toward Yugoslavia, that is, the Soviet-Chinese antagonism. As to the President's question concerning what might be done about Communist China, the Minister thought that the policy of the US had served to push China into isolation and make for its militant attitude. Referring to Communist China's aggressive posture toward India, the President wondered whether the approach of the Communist Chinese would be much different if we had followed another policy.

The President turned to relations between Yugoslavia and the Soviet Union with a question that if it is not ideological difference, what prevents a close rapprochement between the two states. Minister Popovic said this had been impossible because the Soviet Union had desired Yugoslavia to enter the Bloc in a dependent relationship. He explained the closer relationship between Yugoslavia and the Soviet Union existing today, a matter which the President raised, as a result of Yugoslavia's desire to have good relations with all countries, the development over the years of a more realistic attitude toward Yugoslavia on the part of Soviet leaders, a Soviet willingness to take into account the independent status of Yugoslavia and a change in the quality of relations generally between the Soviet Union and other countries. He found the present improvement in relationship due not to a change by Yugoslavia in the conception of its position, but to a change in the Soviet view of its relation to Yugoslavia. He asserted strongly that this did not mean Yugoslavia was becoming an ally of the Soviets and he saw no reason for putting a question this way. He did feel that there would be a steady improvement in Yugoslav-Soviet relations if there was no basic change in international relations generally.

The President commented that he was not attempting to pry into Yugoslav affairs but he was interested in the association of our two countries. From this standpoint he thought it desirable that as Yugo-slavia's relations developed with the Soviet Union its relations should also develop with the US. Our problem of maintaining cordial relations with Yugoslavia involves the element of public opinion. It must be clear to our public that US policy toward Yugoslavia is in accord with our broad policy objective of establishing a world of free and independent states. It is to our interest if Yugoslavia becomes one of these states but does not become a member of the Soviet Bloc. The President hoped consequently that Yugoslavia was interested in improving its relations with the US.

The Foreign Minister replied that the Yugoslav people are the guarantee of Yugoslavia's independence. They are not prepared to lose independence and they will pay again, as they have in the past, the cost of keeping it. Yugoslavia would not want to have good relations with the Soviets at the expense of bad relations with the US. The President noted that in insuring its own independence Yugoslavia contributed to the maintenance of Greek independence and the more independent position of Albania at the present time.

The President then asked what the Minister saw Cuba becoming, a Yugoslavia or a Communist China. The Minister referred to his conversation at lunch with the Secretary of State/1/ who he said had taken exception to the invitation to Cuba to attend the Belgrade Conference because Cuba was not uncommitted. The Minister had replied to the Secretary that they had tried through such steps as this to encourage Cuba to move to a status of nonalignment. When the President questioned why this had not happened, the Minister answered that one of the reasons was that the US had closed the door on Cuba too early. Its future now depends on the policies and moves of the great powers.

/1/No record of this conversation has been found.

Referring to differences from time to time between Yugoslavia and the US in Africa, the President asked what kind of Africa does Yugoslavia support. The Minister replied that Yugoslavia can go along far with the US in its policy toward Africa. It desires to see an end of colonialism there and supports moves in favor of independence, both political and economic independence.

The President said that the US has no real history of a presence in Africa and not an interest as in Latin America. The US therefore has taken a clearly disinterested attitude toward African developments. In the Congo we have supported the independence and unity of the country and in this interest the government of Adoula, whereas Yugoslavia supported Gizenga. The Minister commented that Yugoslavia's support was first for Lumumba and then for Gizenga as the heir of Lumumba against Tshombe. Yugoslavia is for the unity of the Congo. They took account of the realities of the situation by inviting both Adoula and Gizenga to the Belgrade Conference and now by having diplomatic representation at Leopoldville.

The President then put a question to Minister Popovic about ways of improving relations between the US and Yugoslavia. The Minister said that he agreed with Ambassador Kennan on this subject. Ambassador Kennan remarked that he agreed with the Minister to a considerable extent but was concerned about a possible tendency of Yugoslavia to take positions on international issues on the basis of ideological principles and to become in effect a political ally of the Soviet Union without being a military ally. If we can feel that Yugoslavia judges us only on the merits of issues we and other Americans will be relieved. The Minister thought that any conclusion about the existence of such a tendency was not correct and saw no danger in this regard. The US and Yugoslavia differed in substance on a number of international issues and often because of the US position in relation to allies on questions involving colonialism. The US position on disarmament in the past was harder for Yugoslavia to understand than the Soviet Union's. Until recently the US, for example, had not declared in a general statement its positive attitude toward disarmament.

The President suggested the Minister look at our position on Angola in the UN, which led to differences with Portugal; on the Congo, which raised problems with the UK; on West New Guinea, which complicated our relations with the Netherlands; on Berlin, which was against some elements in Europe; on the diffusion of nuclear weapons, which was in conflict with the view of De Gaulle. How could Yugoslavia help but object to East German developments if it followed principle as well as reality in determining policy. We think our policy stands up very well and should receive the sympathy of Yugoslavia if it takes positions on principle. It would contribute to our aim of maintaining good relations with Yugoslavia if it would show more sympathy or support for our positions. This would count with public opinion here which is influential in policy matters.

The Foreign Minister indicated that Yugoslavia has no reason to present American policy in bad colors. They agree with the US position when it is also Yugoslavia's but not to please the US. Ambassador Nikezic commented that if Yugoslav positions were examined by the other side the latter would find a number of them unsatisfactory as was brought out in the statement of March 5 by the Secretary of State (statement before the Kitchin Committee)./2/ The Minister referred to a speech of his in the UN in 1958 which satisfied neither side and which must therefore have been all right.

/2/Secretary Rusk made a taped statement on trade expansion on March 5. The Rusk Appointment Books do not indicate any personal appearance before the House Committee on Armed Services of which Representative Paul Kitchin (D. - NC) was chairman and which, at that time, was preparing legislation modifying the Export Control Act.

Ambassador Nikezic said that if the Yugoslavs had not been not only willing to seek independence but also struggling to maintain it they would have been sucked up under foreign control long since by reason of factors of geography, power, etc. This attitude to preserve the independence of Yugoslavia is the will of the Yugoslav people and not just of the Tito Government. The will to preserve independence is the essence of Yugoslav history and he thought they could be trusted to go that way in the future.

The President said that our position in the world was thrust upon us and considerable isolationist opinion, which was not sophisticated, still existed here. In maintaining friendly relations with the US it was important to take this into account. In connection with this background we had our troubles in relations with Yugoslavia over the Belgrade Conference and the planes deal/3/ as the supporters of those who said we were soft on communism took up the issue. We have had to carry our policy toward Yugoslavia against these difficulties. If Yugoslavia takes account of this and shows good will it will help to make it possible to maintain and develop our relations with each other. The basis for maintaining a friendly policy is the preservation by Yugoslavia of its independent status. Anything Yugoslavia can do to manifest this status makes it easier for us. The President asked whether the Minister would carry this message home and he replied that he would of course.

/3/Reference is to the sale of military aircraft to Yugoslavia by the Eisenhower administration and the training of Yugoslav pilots in the United States. For documentation, see Foreign Relations, 1951, vol. IV, Part 2, pp. 1677 ff. This arrangement, which was terminated in 1957, became public in October 1961.

The President wondered whether the Minister as a Communist has an explanation of any new development in world affairs. The latter replied that they did not believe that ``we with Mr. Khrushchev" would bury you. They do think that a gradual socialization is in process everywhere including the US which has some degree of socialization already. They consider that socialism will evolve in different ways in different countries and it is impossible to have uniformity of development even if all countries were socialist. This had been and is a basic issue with the Soviets.

128. Memorandum From the Executive Secretary of the Department of State (Brubeck) to the President's Administrative Assistant (Reardon)

//Source: Department of State, Central Files, 468.119/6 - 262. Secret. Drafted by Katz and cleared by Kitchen, Kohler, and the Department of Defense. Sent through Bundy.

Washington, June 2, 1962.

SUBJECT

Military Sales to Yugoslavia

In response to your request by telephone today we are submitting additional information to you on the above subject.

Following the Belgrade Conference last September, and the uncertainties which beset United States policy toward Yugoslavia in its aftermath, there was a virtual suspension in the processing of military sales cases for Yugoslavia. The processing of certain cases was long delayed; other Yugoslav requests were rejected. On January 15 United States policy toward Yugoslavia was reviewed by the National Security Council. Policy decisions were made at that time regarding several facets of our policy including that pertaining to military sales. The pertinent paragraph of NSAM 123/1/ provided that:

/1/Document 118.

``Continued military sales to Yugoslavia are approved to the extent they amount to no more than reasonable spare parts and supplies for existing equipment. It is not expected or desired that Yugoslav military personnel will receive training in the United States, and future Yugoslav applications for other new military purchases should be reviewed case by case."

In the light of this policy decision there was a review of the backlog of Yugoslav military sales cases in the Department of Defense. Yugoslav requests which had not been previously refused were acted upon favorably. The principal Yugoslav requests which were rejected were sonar equipment, Bofors guns, and G-47 aircraft. The sonar equipment was denied for ``security considerations". The other two items were no longer available from excess United States stocks.

Following an approach by the Yugoslav Ambassador to the Secretary of State inquiring about United States military sales policy toward Yugoslavia, a meeting was arranged in early April with Yugoslav officials in Washington. The Yugoslavs were informed that we anticipated no difficulty in meeting Yugoslav requests for spare parts and supplies for United States origin military equipment in Yugoslav hands. With regard to new items of equipment, the Yugoslavs were urged to investigate the possibility of procurement in Western Europe either from United States stocks there or from NATO countries. We promised in any case to cooperate with them in working out the most feasible arrangements. It was similarly suggested that training of Yugoslav military personnel be considered first in Yugoslavia, secondly in Western Europe, with the United States to be considered as the least desirable possibility. The Yugoslav representatives were pleased by what they considered to be a cooperative attitude on the part of United States officials although they were not completely reassured that their military equipment requirements could be met from the United States. The Yugoslavs indicated particular concern about the denial of the sonar equipment. They pointed out that on the basis of an offer they had received from the United States Navy they deposited a check in payment for the equipment and purchased helicopters in the United Kingdom on which the sonar was to be used. After the Belgrade Conference, the Navy offer was withdrawn for ``security reasons" and the Yugoslavs were informed that the equipment was no longer releasable to them.

There is another pending case involving a request of the United Kingdom to release to Yugoslavia the Thunderbird rocket. The United States has refused concurrence to such release on grounds that the rocket contains classified United States technology. We have no indication that the Yugoslavs are aware of our blocking of this proposed sale by the United Kingdom but they will undoubtedly learn about it.

A meeting will be held on Tuesday, June 5, between the Departments of State and Defense to reconsider the sonar and Thunderbird cases. An effort will be made to evaluate the ``security considerations" to determine the extent to which classified information is embodied in these equipments and if so whether release to Yugoslavia is nevertheless appropriate.

The Department of Defense has concurred in this memorandum.

William H. Brubeck /2/

/2/Printed from a copy that bears this typed signature. C.K. Johnson signed for Brubeck.

129. Memorandum of Conversation

//Source: Department of State, Central Files, 611.68/6 - 1262. Confidential. Drafted by Katz and approved in S on June 18.

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.

/1/See Document 130.

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 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.

130. Editorial Note

The House Ways and Means Committee, chaired by Wilbur Mills (D. - AK), began consideration of the Kennedy administration's request for widened authority to negotiate trade agreements in March 1962. On June 12, the Committee reported legislation (H.R. 1818) that included a provision withdrawing most-favored-nation (MFN) status from Poland and Yugoslavia. The bill passed the House on June 28 by a vote of 298 to 125.

The Senate Foreign Relations Committee took up the bill in July and held 4 weeks of hearings. The Department of State recalled Ambassador Kennan from Yugoslavia and made him available for discussions with members of Congress as part of its effort to secure removal of the provision denying MFN to Yugoslavia and Poland. Kennan recounted his lobbying efforts in Memoirs, 1950 - 1963, pages 299 - 305. The effort resulted in a bill that restored MFN status, which the Senate passed on September 19 by a vote of 78 to 8.

The two versions of the bill were sent to a joint House - Senate committee for reconciliation. During these negotiations, Representative Mills insisted on retaining the MFN denial provision, and the final conference report (H. Rpt. 2518) restored the House language on MFN. This bill was passed in the House by a vote of 256 to 91 on October 4 and in the Senate on the same day by a voice vote. The legislation, the Trade Expansion Act of 1962, instructed the President to suspend ``as practicable" MFN status granted since 1930 to ``any country or area dominated or controlled by communists." President Kennedy signed the measure into law on October 11 as Public Law 87 - 974. (76 Stat. 872)

131. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.68/6 - 2362. Limited Official Use. Repeated to Warsaw.

Belgrade, June 23, 1962, 4 p.m.

1692. Long discussion yesterday with Yugoslav official of senior rank bears out and reinforces without exception every point made in my previous messages. People here concerned with Yugoslav-US relations felt, it was said, unable to explain to remainder Yugoslav officialdom and to public why Yugoslavia should suddenly at this point be confronted with measures of restrictive discrimination considerably more drastic and unfriendly than those which prevailed under last administration at time when US policy was ostensibly much less sympathetic to attempt of neutrals to maintain independence between the two blocs. Yugoslavs, while striving in coming period to improve commercial relations with Russia and satellites (which represented only favorable openings still available), proposed to do all in their power to maintain their political independence vis-a-vis Moscow, whether our Congress had any sympathy with that policy or not. But they were unable to understand why people in Washington wanted to go out of their way to complicate this task for them at present time or to see how this could be reconciled with US interests. They feared, and had some evidence to support this, that effect of various Congressional actions would be felt in Yugoslav relations with other possible sources of Western economic and financial support. They were obliged to view these actions, accordingly, as designed not just to deprive them of aid from US and to damage their trade with US but to create maximum difficulty in their economic relations with Western countries generally. Fact that this was moment of great economic distress here, when any unfriendly measure in this direction was bound to be doubly painful, was no secret to anyone. It would be difficult to persuade Yugoslav people that timing of these actions had not been selected with deliberate view to exploiting their present plight and creating maximum hardship for everyone concerned.

Kennan

132. Memorandum From the Assistant Secretary of State for Congressional Relations (Dutton) to Secretary of State Rusk

//Source: Kennedy Library, National Security Files, Countries Series, Yugoslavia. No classification marking. A copy was sent to Kaysen.

Washington, September 27, 1962.

SUBJECT

Reconsideration by Wilbur Mills of Prohibition in Trade Bill Against Availability of Most-Favored-Nation Clause for Poland and Yugoslavia

Although we appear to be faced with a fait accompli, I want to urge that a vigorous effort still be made no later than Friday to get Wilbur Mills to reconsider the prohibition he has insisted on in the trade bill against the availability of the most-favored-nation clause for Poland and Yugoslavia.

I recognize that Mills has already talked with the President and you on this issue, and that the Conference Committee has made a decision. I have also talked with him and realize his adamacy. However, the conference report will not be submitted until very early next week, and it is therefore at least theoretically still possible to get the conference to reconsider the issue.

The information that I have obtained is that Mills was the principal, if not only, major advocate in the Conference Committee for this prohibition and the Senate Conferees held out against him for quite awhile. In both the Senate and House strong sentiment exists, of course, against trade, aid, or intercourse of any kind with the two communist countries. But Mills has been the moving force for including this prohibition in the trade bill in the Ways and Means Committee, then in the House, and now in the Conference Committee. If he could be turned around, it would seem that the whole situation might be reversed.

He has stated that the Conference Committee report on the trade bill would be rejected on the House Floor without this prohibition. However, I have talked with several key members, including the Speaker, and they indicate a contrary opinion, although I doubt that they are anxious to press this matter. Their opinion of the situation on the House Floor is relevant, however, in that if Mills could be persuaded by the President, the prospect of smooth sailing thereafter is in sight.

If the prohibition remains in the trade bill, it would seem only realistic that a similar ban will have to be included in the aid bill. The Congress can hardly be expected to approve giving away money and food to the two communist countries if it has already declared we are going to penalize trading and making a profit from them.

My principal reasons for seeking further consideration of this matter are that (1) the issue was resolved quickly and quietly without orga-nizing a vigorous stand on it, and (2) great substantive damage apparently will be done to our economic offensive against the Communist Bloc in Eastern Europe. If we do not fight for this issue, great damage will be done to an international relationship and intrusion on Communist solidarity accomplished over the period of the last decade. After the damage done by the trade issue, we must face further injury in the aid ban that would likely follow, and then in a possible effort later to intercept their trading with Cuba. In this series of events we are giving in to Mills on the point on which it would be easiest to take a defensible stand.

All of this damage is occurring, of course, just at the moment that the Soviets are trying to win them back--and just at a time when the Yugoslavs have shown through their new constitution that they want to expand Western concepts of individual initiative. Our default at this juncture would appear to be difficult to rationalize in later periods tactically as well as strategically.

If the present problem cannot be resolved on its merits, as I would hope, I would think that the Administration would at least want to make a strong public record of having sought to continue trade with the two countries and place elsewhere the responsibility for any events in the coming year which clearly demonstrate that Yugoslavia is turning back towards the Soviet Union. Surely this Administration would not want to be left open to a later charge that such progress as the previous one had made exploiting the loosening of the Poles and Yugoslavs from the Communist Bloc had been defaulted without major effort. I believe that at the very least a good strong record needs to be made before anyone charges we have let these two countries slip back behind the Iron Curtain without publicly raising even a finger./1/

/1/On September 28, the Secretary of State sent a memorandum to President Kennedy protesting the denial of MFN status to Yugoslavia and Poland; see Document 66.

Frederick G. Dutton/2/

/2/Printed from a copy that bears this typed signature.

133. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.0041/10 - 462. Confidential. Repeated to Moscow, Warsaw, Paris, Sarajevo, and Zagreb.

Belgrade, October 4, 1962, 2 p.m.

484. Paris also for USRO and NATO. Deptel 358,/1/ apprising us of failure of final efforts to achieve modification of MFN denial, has been received. It remains now to take note of its implications and to be prepared to face them. When congressional action is complete with final passage aid and trade bills, we will submit message setting forth predictable or possible consequences of this action for various phases of work this mission and our relations with Yugo. Wish now to stress only following:

/1/Dated October 3. (Ibid., 411.0041/10 - 362)

1. In Embtel 370/2/ I stated that if we continued to be confronted by congressional gestures designed apparently only to express hostility to Yugo, behavior of this government would move increasingly beyond range of our influence or power of prediction and that in this case I would have to disclaim all responsibility for turns Yugo policy might take. Action which has now been taken with respect to MFN is even more serious and destructive than what I then had in mind. It would be quixotic for us to expect, in light of this action, that either this mission or indeed our government as a whole will be able to exert significant political influence on Yugo in coming period and so long as this discriminatory treatment of Yugo trade prevails. Responsibility for whatever this means in terms of Yugo's world position and her relations with Soviet Union must lie squarely with congressional figures who have insisted on this action face of contrary advice from every qualified quarter. Up to moment of approval of this provision by House - Senate conferees last week, nothing had occurred to change basically independent position Yugo had taken in recent years, a position which has probably had greater effect than any other single factor in promoting polycentrism within Soviet bloc and reducing its power to act as an effective unit in world affairs. US policy under three administrations, now effectively repudiated, had importantly contributed to this situation. I can make no estimates or predictions as to what will occur in future. If previous position and role of Yugo, so favorable to our interests, are preserved, this will be despite, not because of, what we have recently done.

/2/Dated September 19. (Ibid., 811.0000/9 - 1962)

2. We must now expect to experience whatever forms of retaliation Yugo Government finds it possible and expedient to take. Yugos have repeatedly warned us this action would affect our relations adversely. These were not empty words. I trust that such adverse developments will not be occasion for surprise or indignation at home, and that no one will forget that we have no very good basis on which to protest or oppose them.

3. Yugo reaction to congressional action must not be expected to be confined to Yugo relations with Russians and ourselves. Yugo influence with other nonaligned nations will plainly now be exerted in ways detrimental to our relations with those nations and detrimental to support we can expect from them in US and other international forums. Official party magazine Komunist will carry article in tomorrow's edition pointing to relation of MFN action to questions up for discussion at forthcoming world economic conference, and raising question whether discrimination against Yugo does not amount to condemnation of policy of unalignment generally and threatens all countries that follow Yugo's example.

Kennan

134. Memorandum of Conversation

//Source: Department of State, Conference Files: Lot 65 D 533, CF 2153. Confidential. Drafted by Davis and Valdes and approved in S on October 5. The meeting was held in Secretary Rusk's suite at the Waldorf Astoria.

SecDel/MC/67 New York, October 4, 1962, 3 p.m.

SECRETARY'S DELEGATION TO THE SEVENTEENTH SESSION OF THE UNITED NATIONS GENERAL ASSEMBLY New York, September, 1962

SUBJECT

Relations with Yugoslavia

PARTICIPANTS

US

The Secretary

Mr. Richard H. Davis (EUR) Mr.

Philip Valdes (SOV)

Mr. Peter Thacher (USUN)

Yugoslavia

Mr. Vladimir Popovic, Member of

Federal Executive Council,

Chairman of Yugoslav Delegation

The Secretary said he would like to talk about our bilateral relations, since these are in a state of what he hoped would be temporary complication. First, he wanted to discuss the trade question. President Kennedy is trying hard to prevent Congress from taking action with respect to the most-favored-nation clause. We still did not know what the final result would be but at no time has there been any question of the view of the Executive Branch. The Secretary said he had met at least eight times with Congressional committees to explain to them the importance of keeping our relations with Yugoslavia on a normal basis. He urged upon Mr. Popovic the importance of neither the Yugoslavs' nor our reacting too quickly. We on our side should take time to look at what possibilities there are, then we both should sit down and talk over actual trade problems and possibilities. He realized it would not be easy for the Yugoslavs in view of the political atmosphere resulting from Congressional action. He said that on the practical side he was not discouraged about the possibilities.

Secondly, he said he wanted to talk about the EEC aspects. The powers granted to the President under the Trade Bill will let us negotiate vigorously for a common reduction of external tariffs. It is in our interest to do what we can to prevent the EEC from becoming a small, closed trading community rather than a broad, open one. We hope that what Yugoslavia can do by its trade with Western Europe and what we can do because of our Trade Bill will help ensure this. The Secretary said he would like to hear Mr. Popovic's views.

Mr. Popovic said he wondered what possibilities the Secretary saw in our bilateral trade relations.

The Secretary said we would have to wait to see what flexibility Congress will permit. For example (and this was speculation rather than a promise) the treaty of 1881/1/ provides for a one-year advance notice before denunciation, and perhaps we can get a legislative amendment during that period or in the absence of the most-favored-nation treatment we could see what we could agree to bilaterally on specific items under our new trade legislation.

/1/For text of the Treaty of Commerce between the United States and the Kingdom of Serbia, signed in Belgrade on October 2, 1881, and entered into force on November 15 of that year, see 22 Stat. 963.

Mr. Popovic said the Yugoslav people and Government very much want good relations between our two countries and this will not change. Nevertheless, the trade question does concern Yugoslavia greatly. He realized the U.S. Government has made efforts with Congress. He would like, however, to suggest additional arguments that might be of use. MFN is a mutual obligation embodied in a bilateral treaty, signed long ago, providing a one-year period for denunciation. Secondly, Congressional action came at a particularly unfavorable moment during the Brezhnev visit. The Secretary interjected that we had already used these arguments. Moreover, Popovic continued, Congressional action would affect Yugoslav relations not only with the U.S. but also with the EEC countries. Next year obligations fall due on loans Yugoslavia has received in order to liberalize its economy. The question will be how to meet these obligations. Generally, one can say there is no doubt that Congressional action will affect our political relations. This is neither in Yugoslav nor U.S. interest. The U.S. press calls Yugoslavia Communist but, at the same time, the U.S. recognizes Yugoslavia as non-aligned. Yugoslavia is very active in this way in a positive manner. For example, Ambassador Klutznick mentioned the Cairo Conference very favorably yesterday. Yugoslavia sees more such possibilities. Mr. Popovic hoped Congress realized this. He suggested there were some things the U.S. Government can do. He has talked to some of his commercial people and they reported that the Americans with whom they deal are now stopping negotiations on the grounds they don't know what will happen. The U.S. Government might, therefore, make a statement which would help in this respect.

The Secretary said that on the basis of the final Congressional action we will examine the possibilities as quickly as possible. He did not think this would take very long. He said that to some extent our bilateral relations are caught in a crossfire of matters for which Yugoslavia is not responsible and over which Yugoslavia has little control. The Soviet pressures in Berlin are a prime example. We have not been able to assure our people that Khrushchev is willing to settle the Berlin question peacefully. The Berlin question should not make any difference in our relations with a non-aligned country but the fact is it does. Another factor is the unnecessary and inflammatory buildup of military equipment in Cuba. In this atmosphere a non-aligned but Marxist nation comes under criticism. This general atmosphere is not related to the Yugoslav problem but Yugoslavia is caught up in it. The Secretary pointed out there was also a domestic factor. He said that, whereas most of the Polish nationality groups in the U.S. have supported the concept of increased trade with Poland even though they did not favor the existing Polish Government, the Yugoslav nationality groups here generally have not, and have been unhelpful with Congress.

Mr. Popovic said that the Yugoslavs support the U.S. attitude for a peaceful settlement of the Berlin and German question and recognize the efforts the U.S. Government has made to this end. These efforts make it easier for Yugoslavia to use what influence it has with the other side not to take a rigid position; that is, the more the U.S. shows willingness for a peaceful settlement, the more Yugoslavia can do to help. He commented, however, that the Federal Republic shows no willingness to normalize its relations with Yugoslavia and this affects Yugoslav public opinion. As for Cuba, Yugoslavia would, of course, like to see it non-aligned. Yugoslavia is not on very good terms with Cuba. On the other hand, self-determination and non-interference are basic principles in Yugoslav policy and Yugoslavia still thinks there is a possibility for the U.S. to settle the question peacefully. As for the Yugoslav immigrants in the U.S., there are two groups, one of which does support good relations. There is a large Croat organization which does and he thought the Slovenes did too. In fact, the great majority of Yugoslavs here want good relations but perhaps they are not active enough. He was certain that the political immigrants are more active, and sometimes misinform U.S. politicians. Turning to our action with respect to shipping, he said that he thought that technically we could avoid problems as far as the Yugoslavs were concerned. On principle, however, he felt the action was not correct, involving as it did third countries. Yugoslavia ships no military cargo to Cuba. This affects only Russia.

The Secretary said we are not imposing a blockade. As for a settlement, the Cuban problem does not involve ourselves alone but other countries in the Hemisphere as well. There are only two points that are not negotiable. The first is the military and political connection with Moscow. The second is Cuban interference in other countries of the Hemisphere with agents and funds. This is active interference. As to Germany, the Secretary said that he could understand why Yugoslavia might not want to see Germany reunified now. Mr. Popovic interjected that what worried them was re-militarization, not reunification. The Secretary continued that we may not agree with the Yugoslav position but we could understand it. We think, however, that it would be a mistake to close the door to reunification. Nationalism being what it is, the prospect of permanent separation may bring the wrong Germans to the top in both parts of Germany. As for militarization, he said, our memories are short. The Soviets armed the East Germans for one year under repeated Western protests before the Federal Republic started to arm. The all-German problem, however, is separable from the Berlin problem. Our commitments are such, and our agreements with the Soviet Union are such, that we cannot and will not agree to turn over two and a quarter million Berliners to the East Germans. If this fact is understood as a basic point, all other questions can be handled. Khrushchev, however, talks only about West Berlin, saying that East Berlin and East Germany have already been settled and are no longer under discussion.

Mr. Popovic said he thought there were possibilities for solving the Berlin question peacefully. President Tito and he had stressed the need for the Big Two to negotiate. Not only the Russians, but others in the bloc as well, want to settle the question. He did not, however, see any willingness here to make efforts toward a settlement before our elections.

The Secretary said that our elections have nothing to do with it. No U.S. President could give up West Berlin, elections or no elections.

Mr. Popovic said he did not think anyone was asking for that. He was sure the Soviets are not very much interested in the Cuban question now; they are concentrating on settling Berlin.

The Secretary said we are talking in circles with the Soviets on this. First they say they want to bring World War Two to an end. We say all right, let's discuss how to do this--self-determination, etc. Then they say look at the fact, there are two Germanies. We say there is a third fact--Berlin. They say they want to change that fact, so we are back to the question of putting an end to World War Two. Given this circle, we have tried to convince them that the problem is now to accept the fact of disagreement. How then do we manage this fact of disagreement without war and how do we work out a modus vivendi. Up to now, the Soviets have shown no interest in this.

Mr. Popovic said that if we could agree on (1) demilitarization of Germany and (2) guaranteeing the frontiers, then the Berlin problem would disappear.

The Secretary said we have had some experience with demobilization. Our military budget in 1947 was 10 billion dollars; it is now about 50 billion dollars. The graph of the increase coincides with pressures on Greece, Turkey, Korea, Berlin, etc. If we take ten billion dollars as our normal peacetime military budget, then we have spent, since 1947, 420 billion dollars above normal because of Soviet pressures in addition to the lives lost in Korea. We have seen nothing in our experience since 1945 which gives us any confidence in demilitarization as a solution. He said he did not expect Mr. Popovic to comment on this but he wanted to say that, given the situation in Central Europe, the presence of U.S. forces in Berlin and West Germany is a stabilizing element.

Mr. Popovic said he could agree to this if we made efforts to settle the Berlin question.

The Secretary said he wondered why the Soviets did not destalinize East Germany. If the regime were more accepted by the people there would be fewer tensions.

Mr. Popovic commented that he was not sure. The East Germans do recognize their frontiers, they have negotiated a trade agreement with Yugoslavia and in general the Yugoslavs have found them easy to deal with. He repeated that he thought it was possible to reach a peaceful settlement. The Secretary replied that we do not say it is impossible; he just did not see any possibilities now. He asked Mr. Popovic how long he intended to stay in the U.S. Mr. Popovic replied he would be here about two weeks. The Secretary said that before Mr. Popovic left, we should have something more precise to say about the trade problem. There is some prospect that statements will be made on the floor of Congress which will ease the problem as far as the legislative history and Congressional intent are established.

Mr. Popovic asked if the Government could make a statement.

The Secretary replied he felt sure the President's efforts with Congressional leaders were more important at this juncture than any statement that could be made. He urged Mr. Popovic not to be prematurely discouraged.

135. Editorial Note

On October 5, following passage of the Trade Expansion Act of 1962 with the provision denying most-favored-nation status to Yugoslavia and Poland, Ambassador Kennan offered his resignation. (Telegram 496 from Belgrade, October 5; Department of State, Central Files, 611.0041/10 - 562) Both McGeorge Bundy and President Kennedy, in separate messages, requested that Kennan withdraw his resignation. (Telegrams 367 and 373 to Belgrade, October 5 and 9, respectively; ibid.) The Ambassador agreed to do so on October 10, thanking President Kennedy, but underlining that congressional action had ``severely narrowed" the ``possibilities for successful action here." According to Kennan, the defeat of efforts to protect Yugoslavia's MFN status was the culmination of a series of events that led to his decision to return to academic life. (Memoirs, 1950 - 1963, pages 305 - 306)

136. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.0041/10 - 962. Confidential; Priority.

Belgrade, October 9, 1962, 7 p.m.

519. Policy. Petric has emphasized to us great importance his government attaches to strong statement by President at time signing of Trade Expansion Act indication administration's dislike of Congressional action denying MFN treatment to Yugoslavia. This was central point that emerged from general discussion between him and Jones/1/ 9 October concerning implications of recently concluded Trade Expansion Act and appropriations bill.

/1/Owen T. Jones, Counselor for Economic Affairs at the Embassy in Belgrade.

While noting with interest press reports on final provisions appropriations bill, Petric focused his attention on MFN. He recalled hope expressed by Foreign Secretary Popovic in Washington that aid would not be needed much longer. But without MFN future US/Yugoslav economic relations plainly insecure. PL 480 would not alone provide secure basis. Trade was foundation of sound economic relations and it was denial of MFN treatment under the Trade Expansion Act that was of immediate and deep concern to his government. He then went on to make following principal points:

1. This government could not understand our handling Yugoslavia legislatively as if it were member of Warsaw Pact. While he did not make point explicitly he implied that coupling of Poland and Yugoslavia showed lack of understanding of fundamentally different position these two governments bear to Soviet Bloc. He posed rhetorical question several times, ``do you want to push us into the Bloc?" There was, he asserted, a basic misconception in US of Yugoslavia's independent posture and of its relations with Soviet Bloc.

2. His Foreign Minister had been led to believe in Washington, as had Yugoslav Embassy there, that MFN provision was under control and that it would be deleted in final stages of legislation. It came as great surprise to find things turning out otherwise. We pointed inter alia to situation that had developed with respect to Cuba, the strong feelings within our country on this issue, and how it added to the administration's legislative difficulties. In noting this Petric said his government had been quite correct on Cuban problem. Noting in passing but without elaboration that his government was unhappy over Barin Drzic case, he said Yugoslav carriers had standing orders not to transport anything of dubious character to Cuba and that he had specific knowledge of cases where Yugoslav carriers had declined to carry such material although sought to do so by Western shippers. His government, he concluded, would be sensitive on problems of free trade and free navigation with Cuba.

3. While no action had been taken on matter yet, entire MFN subject was under active review by his government. At the moment it was waiting to see if the President would make strong statement at time of signing Trade Expansion Act making it clear administration saw differently from Congress on Yugoslav problem and denial of MFN privileges. His government needed such public statement so that its own people could understand there is basic difference of view in US on this matter so crucial to Yugoslavia. Petric noted with satisfaction recent articles by Walter Lippmann and Chalmers Roberts as well as editorials that have appeared in the US press. But what was needed was short of Presidential statement that he described. To this he clearly attached the utmost importance. He reverted back to it repeatedly. When we expressed surprise that there should be any doubt in anyone's mind on where administration stood on this issue, Petric said record was clear until about two weeks ago when first real trouble was encountered with MFN clause during final stages of negotiation. Since then the administration had made no clear-cut public statement that was helpful to Yugoslav Government. In looking to future, we recalled to Petric some of points made by Secretary Rusk to Valdimir Popovic recently as measure of desire to deal with MFN problem promptly and constructively. We noted that in any event it presumably would be twelve months after notification before tariff rates would actually change and the interval afforded both of us opportunity to deal with problem constructively. Petric quickly pointed out that effective date of rate changes was less important than present psychological impact. In anticipation of abrogation of MFN treaty, commercial and trading circles would now be more diffident about doing business with Yugoslavia and her credit position was likely to be adversely affected. Moreover, voice of US Government would now carry less weight with Western European circles in those forums such as OECD and EEC where US had been helpful on Yugo-slavia's behalf in past. Western Europeans could point to our own actions and call into question whatever influence we might now try to exert. Meeting concluded with Petric's observing that appropriate public statement by administration was essential first step to any constructive action on problem and that in absence such statement his government could only assume Congressional action represented administration as well as Congressional attitude toward Yugoslavia.

Kennan

137. Telegram From the Department of State to the Embassy in Yugoslavia

//Source: Department of State, Central Files, 611.0041/10 - 1262. Secret; Niact. Drafted by Bundy, cleared by Tyler and S/S, and approved by Rusk.

Washington, October 12, 1962, 7:22 p.m.

386. Eyes only for Ambassador from Secretary and Bundy. Reurtel 534./1/ What happened at signing ceremony was that President had strong paragraph prepared and then found that arrangements called for him to read the whole statement in the presence of large Congressional group including Wilbur Mills who was at once indispensable in passage of bill and determined and sincere opponent of President on MFN issue. President thus faced choice between softening language to point of ineffectiveness out of personal friendship to Mills, or else risking press assertions of personal affront to Congressman who is powerful on all issues and helpful on many. This led him to omit the paragraph, and to issue it separately has not proved practicable, as President initially intended, because he is out campaigning.

/1/Telegram 534, October 11, reads in part:

``This will be very bad. Only strong statement by President at this time could have convinced Yugos that Executive Branch has not during past fortnight changed its attitude and abandoned determined effort to oppose MFN provision. It would be an illusion to suppose that statements made to Yugos at any lower levels, including myself, will be of avail in countering this impression, and much less press reaction. A Presidential statement at later date might on principle be useful; but it will probably be too late." (Ibid., 611.0041/10 - 1162)

All of us recognize difficulty this creates for you, but we suggest that if Popovic or others raise question with you, you should make it clear that you know directly from the President of his continued determination to press for removal of MFN prohibition in next session and your understanding from White House that his position will be made clear at earliest moment appropriate in terms of political effectiveness in US. Our expectation is that this will be at next press conference, but you might emphasize to Yugoslavs that President's determination is the essential point and that even from their own point of view political effectiveness within the US is more important element in timing of statements than understandable need for reassurance in Belgrade.

Rusk

138. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 411.6841/10 - 1362. Limited Official Use; Priority. Repeated to Zagreb and Sarajevo.

Belgrade, October 13, 1962, 3 p.m.

550. Have just visited Foreign Minister Popovic at his request (Embtel 545)./1/ His purpose was to express GOY reaction to denial MFN to Yugoslavia by new trade act. His statement was more restrained and measured in tone than editorials of morning press but not less disturbing in content. Following is summary his remarks.

/1/Telegram 545, October 12, reported that Popovic had asked Kennan to call on him, adding that Petric had called the defeat of MFN for Yugoslavia the ``lowest point" in relations between the two countries. (Ibid., 768.13/10 - 1262)

He could well believe administration had not wished to see this action taken. But action had been taken; it was there. Yugoslavs could not be asked to base their reactions on subtle distinctions between various branches of our government. So far as they were concerned this was action of USG and had to be treated as such.

During recent period, as he thought I would agree, they had shown great restraint and had avoided any action that could possibly exacerbate developing situation in Washington (I agreed). There was now no further point in remaining silent.

They could see only two calculations on basis of which this action could have been justified in minds of its authors: (A) That Yugoslavs were in so miserable position that this could be done to them with impunity, or (B) that they were not ever really independent at all. Both had profoundly offensive connotations. In their view this was a political action taken for purely political reasons. It was no comfort to them to know that at their expense certain other things might have happened which had positive significance.

For all of this and its consequences they were not only disappointed but profoundly concerned. It was idle to suppose that effects of this action were limited to the prospective rises in duties, that they would not be felt until the duties were changed, or that they would be limited to this immediate injury. Already, things were happening on every hand, injurious to Yugoslavia which were reflections of congressional action. In matters of their relationship to GATT and EEC, in international financial matters, et cetera, they were already encountering difficulties traceable directly to this cause. A chain reaction had set in. He gave me examples: A 5,000 ton order for soybeans from the US which could not be fulfilled; reluctance of EXIM Bank to pursue discussions with their representatives; cancellation in New York, for avowed political reasons, of large order for Slovenian furniture, et cetera. Even in best of circumstances there was setting in a negative inertia from which Yugoslav interests were bound to suffer widely.

Yugoslavs were simply flabbergasted to receive such an injury from us at this time. They were obliged to think back to years immediately after the war. There had been extremely unpleasant moments in our relationship then and even instances where they had seen themselves obliged to fire on our planes. Yet even at that time nothing of this nature had ever been undertaken against them. He realized statements had been made from time to time which annoyed us, but no such overt action, designed to injure us, had been taken on their side. We could understand their bewilderment and consternation at being faced with such action today.

They felt there was nothing more they could hold onto in US-Yugoslav relations. He had been obliged to report to President Tito that he was unable to assure him of stability of our arrangements for surplus food. He could never tell now when something would come up that would vitiate this entire program. He had been obliged to advise the President to look around for alternatives, as matter of common prudence.

This situation had already damaged our relations. He saw no possibility of returning to normal basis so long as the action remained in force. Even if it were repaired at early date it would be some time before all the damage, material and psychological, could be repaired. In some respects, repair might never be wholly possible for time would be marching on and even when reversal came, conditions might no longer be what they once were. On other hand, if no correction of this situation could be made, and if it were to continue indefinitely, he wanted me to understand that all the positions of our government in this country would then be seriously jeopardized.

I said I would report his statement to my government promptly and in detail. Observed I had as yet seen nothing that led me to believe that PL 480 shipments were jeopardized. Said I was persuaded administration intended to try to bring about a reversal of action on MFN when new Congress met and I thought it possible this would be made clear publicly in coming period. Pointed out that while no one expected this action would go wholly without reaction from Yugoslav side, they would doubtless have many occasions to choose whether to conduct themselves in manner that would facilitate reversal Congress decision or in manner that would further exacerbate congressional opinion, and voiced conviction former would be in their own interests.

My own analysis is that Popovic's remarks were accurate statement of Foreign Office position but did not fully reflect extent of hurt pride and anger now prevailing on part of senior leaders, effects of which we may be made to feel at any time. Statement suggests no decision yet taken to retaliate sharply against our ``positions" in Yugoslavia, which I take to mean libraries, cultural exchange arrangements, AID mission, Consulates, but such decision would have to be expected if PL 480 were to be terminated or drastically curtailed in present circumstances.

(To me personally, Popovic was cordial and pleasant throughout. He insisted on producing refreshments, which is Yugoslav way of stressing that unpleasant statements are not to be taken personally.)

Kennan

139. Memorandum of Conversation

//Source: Department of State, Secretary's Memoranda of Conversation: Lot 65 D 330. Confidential. Drafted by Mudd and approved in S on November 7.

Washington, October 23, 1962, noon.

SUBJECT

US-Yugoslav Relations

PARTICIPANTS

The Secretary

Mr. Veljko Micunovic, the Yugoslav Ambassador

Dr. Josip Presburger, Counselor of the Yugoslav Embassy

Mr. Robert C. Mudd, EE

During his call on the Secretary on October 23 Yugoslav Ambassador Veljko Micunovic brought the conversation around to US-Yugoslav relations which he said he was under instructions from the Foreign Office to discuss. He spoke along the following lines: He wished to underline Yugoslavia's sense of bewilderment and consternation at Congressional action denying Most Favored Nation treatment to Yugoslavia. It is useless to go into all of the reasons why Yugoslavia feels this way because these are well understood in the State Department. Yugo-slavia's principal concern was that a new element had been inserted into otherwise very profitable US-Yugoslav relations. There was a clear understanding in Belgrade of the attitude of the Kennedy Administration towards the Congressional action and it was recognized that the Administration had striven manfully to prevent what turned out to be the final result. Great political damage had been done to Yugoslavia's international reputation and prestige. The Yugoslav Government was most upset over this fact and regarded itself as totally blameless in the result-ant deterioration in US-Yugoslav relations. The Yugoslav Government hopes for normalization of relations and trusts that the Administration will take some steps to rectify a situation which, from the Yugoslav standpoint, is unwarranted. Yugoslavia sets great store by its relations with the United States and would like to see these relations expand to the profit of both parties. Yugoslavia continues to value highly friendly relations with the United States and is just as determined as ever to maintain an independent policy in international affairs. Feeling was extremely high in Yugoslavia because of the recent Congressional action, particularly since the timing was so bad. Yugoslavia's foreign economic relations are being expanded in the direction of Western Europe and the United States and away from the Soviet Bloc. The Congressional action was clearly against this trend and Yugoslav efforts to associate itself more closely with GATT, OECD, and the Common Market countries. Three years of bad harvest and ``certain other difficulties" had made the impact of the action by Congress much greater.

The Secretary remarked that as he had said to Valdimir Popovic in New York a short time ago both the President and he regretted exceedingly the action of the Congress denying MFN treatment to Yugoslavia. The Ambassador was quite correct in his statement that the Administration had made strenuous efforts to prevent the Congressional action. He went on to say that we would be in no hurry to implement the provisions of the new law and that certain steps were under consideration to correct the situation. He said that we are working on the problem and that we would do our utmost to prevent serious trade complications for Yugoslavia. We also would make an effort to see to it that a positive attitude was adopted toward Yugoslavia's request for provisional accession to GATT.

Ambassador Micunovic thanked the Secretary for his statement of the US attitude and said he would inform Belgrade immediately. He repeated that Yugoslavia seeks a return to normal relations with the US as soon as possible since it values these relations highly. He intimated that it would be possible to restore these relations to normalcy only if MFN status were restored to Yugoslavia. The Secretary said he understood and observed that Yugoslavia had been caught in the whirlwind of reaction to recent developments involving Soviet actions in Cuba. Yugoslavia could not prevent what happened; neither he nor the President could prevent it either. Yugoslavia had no connection with developments in Cuba but as long as tension stemming from Soviet actions in Cuba remains in this country, there were going to be problems for Yugoslavia in the United States. Ambassador Micunovic replied that Yugo-slavia's only interest at the moment was to see a relaxation in the presently very taut international situation.

In the process of bidding the Secretary farewell Ambassador Micunovic mentioned the long delay in presenting his credentials to the President. He said he hoped to do this as soon as possible and expressed the hope that the present crisis over Cuba would not unduly delay the presentation of his credentials. The Secretary replied that the President was extremely occupied at the moment but that we would do what we could to arrange his call on the President as soon as possible./1/

/1/Micunovic presented his credentials to President Kennedy on November 2. A memorandum of their conversation is ibid., Presidential Memoranda of Conversation: Lot 66 D 149. Former Ambassador Marko Nikezic had left the United States on August 15.

140. Airgram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.68/11 - 2862. Limited Official Use. Drafted by Kennan.

Belgrade, November 28, 1962.

A - 543. Subject: Current Situation with Respect to U.S. Policy Toward Yugoslavia. Pass White House, AID, USIA, Department of Defense.

The following is an attempt to summarize the situation that now prevails with respect to U.S. policy towards Yugoslavia and to note certain of its more important implications. It is written in the hope that it may serve as a basis for a thoroughgoing review of this policy.

1. What U.S. policy has been since 1948.

Since Tito's break with Moscow in 1948, the Executive Branch of the United States Government has pursued a policy designed

(a) to encourage the maintenance and strengthening of the independence of Yugoslavia, particularly with relation to Moscow; and

(b) to encourage evolution of the institutions and practices of the present Yugoslav regime away from the Soviet pattern on the basis of which they were originally founded and in the direction of greater liberality and greater affinity to those of the West.

The original rationale for such a policy was clear and persuasive. Up to 1948, a monolithic unity had existed in the Communist movement. The thesis had been well-established in communist circles and beyond that without this unity there could be no successful adherence to Marxist-Leninist principles. This thesis was useful to Stalin and his followers. It contributed importantly to the discipline of their movement. It left millions of sincere Marxists with the feeling that there was no real alternative between the total abandonment of their cause or complete submission to Moscow. By 1948, this impression, closely connected as it was with the myth of the Kremlin's infallibility, had come in fact to constitute an essential part of the magic of the appeal of the communist movement to millions of people.

The Yugoslav defection shattered this magic. For this reason, it was obviously important to the West that Tito should succeed in his effort to establish an independent position. Whether he could do this would of course depend largely on whether Yugoslavia proved capable of surviving and flourishing economically outside the Soviet system. The achievement of a reasonable degree of economic prosperity was almost essential to the establishment and maintenance of independence.

But more than this was at stake in Yugoslavia's economic future. If Yugoslavia, as a nominally Marxist-socialist state operating outside the framework of the Soviet system, were to show better results in the way of economic development than did those of the Eastern European satellites which remained within the system, this would be bound to excite jealousy and a demand for greater independence of policy vis-a-vis Moscow among the peoples and regimes of the remainder of the erstwhile satellite area. To the extent this economic success could be associated with, and supported by, Western practices, or at least ones differing from those of Moscow, Yugoslavia would provide an example which could only serve, in the long run, to shake confidence, throughout the communist orbit and among the non-committed peoples, in the infallibility of the Kremlin and the correctness of its ideas and approaches.

There was, therefore, every reason for the U.S. to adopt, as it did, a policy aimed at the strengthening of Yugoslavia's independence, at the support of her economic advance, and at the evolution of her institutions and practices away from the Moscow patterns.

2. What U.S. policy has not been.

At the time this policy was devised, American policymakers knew well that Tito was himself an old-school Marxist-Leninist communist, and that as such he was not, and was not likely to become, our friend. Nevertheless, the policy then adopted ruled out any effort to overthrow him. For this, there were good reasons.

First, even had it been feasible for us to promote Tito's overthrow, it would have been a dreadful political mistake. It would have served as clear evidence to other satellite leaders that survival was possible for them only in complete submission to Moscow--that any attempt to follow Tito's example would only leave them vulnerable to destruction at the hands of embittered and implacable capitalists. It would, in this way, have sacrificed at the outset one of the main advantages the Western world might hope to derive from the Soviet-Yugoslav break, namely: the introduction into the minds of the satellite communist leaders of the element of doubt as to whether slavish adherence to Moscow discipline and example was the only feasible political course open to them.

Secondly, to overthrow Tito was unnecessary. It was clear that a Yugoslav socialist regime which had sacrificed the tie with Moscow and had struck out on the perilous and difficult path of trying to find a satisfactory independent existence somewhere between the two worlds would have no stomach for further efforts at subversion in the U.S. and other Western countries. To pursue such efforts in association with Moscow was now no longer possible; to pursue them alone would have been quixotic. The U.S. had nothing to fear then, and has had nothing to fear since, from the standpoint of its internal security, from an independent socialist Yugoslavia.

Finally, to overthrow the Yugoslav regime was simply not politically feasible. There was no visible alternative to it that would have been preferable. The ``partisan" movement, with Tito at its head, represented the only serious unifying force in the country. Without it, at any time in the postwar period, the country would have fallen to pieces. The major non-socialist political parties which had opposed the communists in the wartime period were ones expressing the political will, in each case, of only one of the national components of the Yugoslav state--primarily the Croats or the Serbs. The most active political force among the Croats was outspokenly fascist in inspiration and was wholly aligned with the Nazi cause during the war. The Serbian monarchists had deeply estranged the other nationalities in the prewar period; it is out of the question that they should have constituted the basis for a restoration of the Yugoslav state after the war, even had Mikhailovic retained Allied support and won out over the partisans.

The painful fact is that in the postwar period the Tito regime was Yugoslavia, and it still is. There have been varying phases and forms of popular discontent with it--some quite widespread. But there has been no serious national-Yugoslav opposition, as opposed to separatist opposition or opposition expressing the aspirations only of one or the other of the national components of the present state. Whoever talks about overthrowing the present regime talks in reality about breaking up the Yugoslav state. The appalling instability this would at once introduce into Balkan affairs is obvious. Nothing could be less realistic than to suppose that a number of fragment-entities, none of them prepared for independence and some of them not even potentially qualified for it, could provide a more effective resistance to Soviet communism in the Balkan area than the extraordinarily firm and experienced national regime that now governs twenty million people in this area and controls one of the two largest ground force establishments in the non-Soviet part of Europe.

For these reasons, the Department of State, with the approval of the respective administrations, rejected throughout the period from 1948 to 1961 the idea of making the overthrow of the Tito regime an objective of U.S. policy.

3. Means used to implement the policy adopted.

The means by which U.S. policy towards Yugoslavia was pursued in the period from 1948 to 1961 are well-known, and need only the briefest capitulation. They included:

(a) encouragement of close economic relationships between Yugoslavia and the West, based on the extension to Yugoslavia of favorable trading and credit facilities;

(b) extensive shipments of surplus food, to make up the deficit in Yugoslav grain production;

(c) the extension of long-term credit and technical support for new industrial development;

(d) a broad program of technical assistance, designed particularly to promote travel and contact by Yugoslavs in the West;

(e) a highly developed informational program, including operation of libraries and reading rooms in leading Yugoslav cities;

(f) intensive promotion of cultural exchanges between Yugoslavia and the West;

(g) operation of governmental programs of exchange of persons, and encouragement to private ones; and

(h) encouragement to the Yugoslavs--up to 1957 through a military aid program, thereafter through extension of facilities for normal military purchasing in the U.S.--to orient their military establishment towards ourselves and to render it independent of Soviet sources of supply.

4. Results of this policy, to 1961.

The results of this policy, as of the beginning of 1961, were generally favorable and encouraging. Extensive changes, all in Western interests, had by that time taken place in Yugoslav institutions and practices. Economic life had been extensively reoriented towards the West. Foreign trade now ran predominantly to Western countries. With respect to contacts with foreigners, travel by Yugoslavs abroad, access to foreign media of information, and cultural and intellectual exchanges with Western countries, a regime was being applied which was far more lenient than that of any of the countries remaining within the bloc. Extensive changes in the direction of greater liberalization had occurred in both the social and the political system. Tastes and interests of the people were now running overwhelmingly to the West. It is not an exaggeration to say that by 1961 Yugoslavia had come more than half the distance from Soviet outlooks, institutions and practices to ones which, while not identical with those of the West, were such as to permit a generally normal, profitable, and cordial relationship with Western countries. And the trend was continuing. Not all of this was the effect of our effort alone; but without our effort it would assuredly not have occurred.

The success was not uniform or complete. We were not successful in changing the political personality of the Yugoslav President himself. Nothing that we did served to produce any great change in Tito's view of himself as a communist; in his concern for the opinions of other communist leaders; in his determination--as a supreme political goal--to win respect and acceptance from the communist world by which he had been rejected. His views on world problems continued to be colored by ideological prejudice. He could be brought to like individual Americans, but not America as such. He persisted in viewing American aid cynically and without gratitude, as something extended for selfish imperialistic reasons which placed no claim on his appreciation. He avoided, where he could, being put in the position of asking for our aid or expressing public appreciation for it; he did his best to avoid bringing to public attention its nature and its extent. Under his personal influence, Yugoslav attitudes towards the broader cold war issues continued to show a partiality to the communist side (though in their own bilateral relationships with the U.S. and the U.S.S.R. the Yugoslavs remained correct and impartial). Similarly, the intensive relations which Tito cultivated with the new African and Asian countries, particularly in the period 1959 - 1961, were pursued in a spirit which was distinctly anti-Western.

All of this was irritating. It was not a situation we could ignore. It called (as did, by that time, other developments as well) for certain adjustments in our treatment of Yugoslavia, including certain curtailments and changes in the aid programs. But it did not invalidate--and this is the vital point--the basic concepts of policy on which we had been operating since 1948. Movement in the direction we desired was no doubt slower than it would otherwise have been, as a result of Tito's personal attitude; but it was never wholly halted, nor was its pace so slow as to constitute grounds for serious discouragement. Only in one field--that of official Yugoslav attitudes towards world problems--did all progress appear to have stopped by 1961. But even here there was no ground for despair. The root of the problem lay in the aspirations and attitudes of the Yugoslav President himself. But Tito was no longer young; he was increasingly inactive; the little group of senior officials who supported him in these anti-Western policies was becoming narrower and more isolated; counter-pressures were building up; awareness that Yugoslavia stood to gain from a further development of relations with the West, even at some sacrifice of the old ideological stance, had penetrated into Tito's immediate entourage and had affected persons whose authority could reasonably be expected to become greater, and possibly decisive, as his powers declined. There was an excellent prospect that if our cards were played with reasonable dexterity, the pressures for a more forthcoming policy towards us would soon begin to show real effect.

All that was required of us, in these circumstances, was a bit more patience, coupled with a somewhat greater effort than had been made in the past to bring the Yugoslavs to realize that the price of our aid and collaboration, over the long run, was a reasonable degree of fairness and objectivity in the approach to ourselves and our problems. There was no reason for despairing of the efficacy of the basic concepts on which our policy had been founded. There was no reason to jettison at this point a long-term approach into which much substance and effort had already been invested, and which had yielded, and was continuing to yield, favorable and promising results. On the contrary, with the growing seriousness of the Russian-Chinese conflict, with the increasing importance of Yugoslavia as a factor in that conflict, and with the sharpness of the financial and economic pressures now coming to bear on the Yugoslav Government, there was, as of 1961, less reason than ever to relax the sort of effort to which we had been committed throughout the previous thirteen years.

5. The collapse of established policy.

The above represented, in rough outline, the situation which prevailed in 1961, as the present Administration took over in Washington. Yet in the brief intervening period of less than two years, events have occurred in American policy which have not only largely shattered this background of concept and destroyed its present effectiveness but have even begun to jeopardize the important results achieved in the past.

With the exception of surplus food (where the Yugoslavs are well aware that internal considerations play a prominent role in our willingness to continue the shipments), existing programs of economic assist-ance have now either come to an end or are approaching their termination; and the Executive Branch has been deprived of almost all discretion and flexibility with respect to the negotiation of new ones. No further developmental financing has been extended to the Yugoslavs since March 1961. They have been virtually cut off from purchasing of new items of military equipment in the U.S., even in instances where the items in question are obsolescent to our own use and unclassified, and even when they are willing to pay cash. They have been abruptly faced with legislation calling for denial to them of most-favored-nation customs treatment for Yugoslav goods, which they had enjoyed for more than seventy years. In this way they have been threatened with curtailment of their possibilities for earning their own way in economic relations with our country.

By consequence of, and in connection with, these events, Yugoslav trade and credit have already been materially damaged. The Yugoslavs find themselves faced with a whole series of spontaneous harassments at the hands of private circles in our country: boycotts and withdrawals of existing orders for their goods; public burning of Yugoslav products at American supermarkets; impairment of their facilities for obtaining commercial credit; refusal to their vessels of facilities for loading and unloading at American ports. Even the intellectual exchange program of the University of Texas had to be abandoned at that university and transferred to another region of the country, in deference to the prevailing mood of anti-Yugoslavism. A further blow, directly connected with the MFN decision, is the inclusion of Yugoslavia among the countries affected by the Cunningham Amendment in PL 87 - 793.

For all of this drastic deterioration in their treatment at our hands, going in many instances beyond anything they suffered when they were a Soviet satellite, no official reason has to my knowledge yet been tendered to the Yugoslavs by any responsible quarter in our country. No one has troubled himself to inform them what the Congressional grievance against them is, for what they are being punished, and just what they could be expected by us to do if they wished to avoid these manifestations of our disfavor. People have told them that the Executive Branch disapproves of certain of the legislative measures that have been taken; but no one has told them what it is, specifically, that Congress has taken exception to in their behavior, or what sort of concessions on their part would again entitle them even to the normal trade treatment accorded to other non-aligned countries.

The Yugoslavs can of course deduce, from the terms of the legislation as well as from the nature of the domestic discussion in our country, that they are being penalized because they are nominally ``communist." This is a point at which they themselves, as will be seen below, contribute to their own difficulties by insisting on retaining this term in the name of the ruling party. They are well aware, as are all foreign observers who have seen anything of Yugoslavia, that neither in point of domestic institutions nor of foreign policy does their position correspond to that of the real ``communist" countries. Their entire effort, furthermore, over 13 years, has been to prove by the tenor of their behavior in relations with Western countries that cordial and mutually profitable relations can exist between a country which calls itself ``socialist"--or even ``communist," if you will--and non-communist countries, provided there is good will on both sides. To be told in effect (and this is the clear inference of the Congressional action) that we do not accept this principle, that they must suffer at our hands simply because they call themselves ``socialist" or ``communist," and that their actual behavior towards us in bilateral relations is neither here nor there: this is one of the most devastating blows they could receive, for it shatters the entire basis on which they have tried to construct their relationship with Western countries over recent years. It means that the price of a good relationship with our country is the one thing they cannot possibly do without denying their own political past and placing in question the legitimacy of their own regime: namely to renounce publicly and completely their belief in the principles of socialism.

This situation is not greatly ameliorated by the fact that the most serious and conspicuous of these various anti-Yugoslav measures have been taken over the stated disapproval of the Executive Branch of our government. The Yugoslavs are obliged, after all, to deal with the end-product of our governmental action. They must look at our government as a whole. They are not greatly comforted by the fact that initiatives of which they are the victims were ineffectively opposed here and there within our own governmental counsels. They are aware that the Executive Branch of the Government has on occasions stated its opposition to these measures. They are also aware that it has not done this very emphatically, nor has it made a serious effort to correct the moods and misunderstandings of public opinion out of which these measures arose. They are further aware that in certain instances the Executive Branch has even deferred to these same moods and misunderstandings in the shaping of measures which lay within its own discretion--particularly in the field of military affairs and of matters lying within the purview of departments and agencies other than the Department of State.

It is not possible to estimate how much damage has already been done by this state of affairs. The Yugoslavs have repeatedly stated that U.S.-Yugoslav relations have already been adversely affected. They have warned us that this effect will be much more adverse still, and will probably affect our ``positions" in this country (primarily, we must assume, the USIS establishment) if the MFN provision is not soon reversed by the new Congress. It is certain, in any case, that much bitterness has been created on the Yugoslav side. People who were once inclined to argue for a closer relationship with us, and with the West generally, no longer feel that they have grounds for doing so; those who have never liked the Western orientation are triumphing; calculations are being arrived at, plans made, positions and steps taken in foreign policy, all under the impression that American policy has turned decisively, for the moment, at least, against good relations with Yugoslavia--that important, and thus far decisive, forces in American society are determined that the doors of economic collaboration and even normal trade shall remain closed to Yugoslavia--and that the Executive Branch, while not sharing this view, is not prepared to undertake vigorous public opposition to it. By the same token, those of us who have tried in recent years to persuade the Yugoslavs that a close and fruitful association with our country lays open to them any time they wished to take advantage of it, are now effectively silenced.

All of this, let us note, is occurring at a time of greatest delicacy and cruciality in world events, when relationships within the communist bloc are shaken and unstable as never before; when the Yugoslavs are in particular need of outside economic and financial support; when Soviet policy has changed in such a way as to offer to Yugoslavia much more inviting prospects for fruitful collaboration than at any time in recent years.

Looked at in its entirety, this all spells, as I see it, the virtual collapse, at a singularly unfortunate moment, of a policy which has been pursued over a long series of years, which had yielded good results and promised to continue to yield them, and which there was no objective reason to abandon.

6. What has produced this collapse?

While this is a question, parts of which could be better answered in Washington than here, the following observations may not be wholly irrelevant.

We must recognize first that the policy pursued towards Yugoslavia throughout the 1950s never commanded full public understanding or support at home. There was always opposition to it--not wide popular opposition, but an opposition composed, as I see it, primarily of two very vigorous and vocal special interests.

The first of these was made up of the Yugoslav refugee elements, supported by allies among various other groups of refugees from Eastern Europe, and by such members of Congress and other participants in political life as were either sincerely moved to sympathy or anxious to cultivate their favor and to appear as their spokesmen. These refugee elements in question were, and continue to be, powerful groups. They have enjoyed important support in American religious circles. Their aims and calculations seem often to have little to do with U.S. interests. In many instances, their main concern appears to have been to produce as rapidly as possible a state of war between the U.S. and the Soviet Union, in the hope, presumably, that this will facilitate their own return to residence and power in their homelands. To these people, any suggestion that the U.S. should recognize distinctions between one ``communist" government and another is of course anathema. To admit that a ``communist" or ``socialist" regime could be worthy of toleration at our hands just because it broke its ties to Moscow, ceased efforts at the subversion of our country, and permitted its internal institutions to develop along Western patterns, would be to accept the frustration of their own political ambitions. To admit even the possibility of a gradual evolution of communist countries in the direction of greater liberality would weaken the credibility of their view that war is the only answer. The fact that this is so, and that the aims of these people are often unconnected with American interests, has unfortunately not prevented many prominent American figures from espousing their interpretations of world events and repeating their propagandistic slogans.

The second of the two elements to whom I refer is made up of those extreme right-wing American groups who feel themselves under the necessity of demonstrating that all elements in American political life except themselves are the agents, conscious or unconscious, of a communist conspiracy in our midst. To these people, a policy of friendly collaboration and assistance addressed to ``communist" Yugoslavia has naturally provided an attractive target for criticism. The less U.S. policy towards the Soviet Union and the bloc countries has shown itself vulnerable to attack on point of ``softness," the more Yugoslavia has loomed as the last example on which an American policy inspired by direct communist influences or by fatuous naivete towards ``communism" in the Department of State could be plausibly argued. These elements, like the refugees, not only have no desire to take account of the peculiarities that distinguish Yugoslavia from the remaining bloc countries but react with particular violence, for obvious reasons, to any suggestion that these peculiarities exist or deserve consideration.

The influence of these two groups over broader sections of the public has been strengthened in recent years by the growing general impatience with the cold war and by the prevailing popular mood of exasperation towards those nations which call themselves neutral. To the extent one persuades one's self that whoever is not with us is against us, the rationale of a policy towards Yugoslavia different from policy towards the communist bloc in general becomes unsubstantial.

Both refugees and right-wingers have of course been happy to exploit the semantic confusion presented by the term ``communist." In this respect, they are only taking advantage of a tool obligingly placed at their disposal by the Yugoslav leaders themselves. It is characteristic of Tito's psychology that although his regime no longer corresponds to general Western concept of the term ``communist" any more than it corresponds to the general Eastern concept of the term ``capitalist," he prefers it to be called ``communist," hoping this will render it more respectable in Eastern eyes, than to abandon this inaccurate term with a view to making it more respectable in Western ones. He wants, in truth, to have his cake and eat it, too: to see his regime respected and well-treated in the East because it calls itself ``communist," and to see it respected and well-treated in the West because it is not really so. In this sense, Yugoslavs have an appreciable share of the blame for the misunderstanding of their position which has become so widespread in our country and elsewhere in the West.

I am increasingly impressed with the difficulty of the problem this presents. Any effort on our part to clear away this semantic confusion not only involves us at once in the tangled question of ``what is communism?" but creates difficulties with the Yugoslavs themselves. To tell the world that Yugoslavia is not really communist is to deprive Tito of his fondest pretense, to proclaim his ideological nakedness, and to do him what he conceives to be a great political disservice. He insists, in effect, on the right of making it semantically difficult for us to help him. His defense would be that we should not be misled by semantic symbols--that there is no reason why we should not be prepared to have a normal relationship with a ``communist" country, if it is prepared to be correct and collaborative in its approach to us. All of this, again, is irritating. But I do not see that it absolves us of the obligation to try to see things as they are and to teach our people to do likewise. There is nothing in our book that says we have to be permanently the victims of other people's deliberately perpetrated semantic confusion.

These reflections lead directly to another important cause of the situation we have before us. This is the shocking failure of the American press to give the American public in recent years anything like an adequate picture of the situation in Yugoslavia and of the basis on which American policy has rested. It is clear that wide and influential sections of the American public have only the dimmest idea, if any, of the distinctions between Yugoslavia and the countries of the Soviet bloc, of the stake the West has in the preservation of Yugoslavia's independence, and of the real nature of our policy and approaches. At the present moment, there is no full-fledged American, or indeed Western, correspondent in Belgrade. The news agencies are represented only by local stringers who are not in position to give any frank interpretive picture of conditions here. It is characteristic that even the sophisticated American reading public has to this day been given no idea of the gravity of the effect of recent Congressional actions on Yugoslav-American relations.

For this state of affairs, too, responsibility is widely divided. The Yugoslav Government bears a considerable share of the blame by virtue of the negativism and neglect it has shown towards Western press representatives in recent years. The American press, in its turn, has lent itself extensively to pressures brought to bear by the refugee and right-wing groups. Its own professional distortions, involving a love for generalizing concepts under simple catchy adjectives (``communist Yugoslavia," ``red Yugoslavia," ``Yugoslavia's communist dictator," etc.) have caused it to collaborate in multiplying the semantic confusion caused by the use of the term ``communist." Added to this has been the failure of the Executive Branch of the Government to convey in any adequate way to the public its own ideas and approaches with regard to Yugoslavia.

This last has been the reflection, again, of a situation within our Government which I have no choice but to mention. I trust the Department will not take umbrage if I treat this subject frankly, for it lies at the heart of many of our difficulties. The fact is that in recent years the conceptual impulses and the enthusiasm for the policies we have ostensibly followed toward Yugoslavia have come primarily from a very narrow group of persons in the Department of State who have had the stimulus of daily confrontation with the realities of U.S.-Yugoslav relations at the working level, and have labored with great patience and devotion to try to get sound concepts of policy established and implemented. These people have often been permitted to initiate action of one sort or another; but due to the present far-flung quality of our governmental apparatus, to the lack of intimacy among its various sections, and to the ulterior preoccupations of senior officials, they have had only inadequate facilities for gaining understanding elsewhere for what they were doing. The policies they have recommended have usually been formally approved; but approval has come too often from harried, overworked, and distracted superiors, whose own initiative and personal interest was not greatly engaged, who were willing to let the ideas in question ride as far as they could on their own steam along the road of governmental implementation, but who felt no great sense of personal commitment or conviction, and were not prepared to support these policies very vigorously if they ran into serious opposition either in Congress or in other agencies of the Executive Branch. The result was that few people, even in the Executive Branch, understood fully what it was that we were trying to do, and there were fewer still who could explain it to people outside. The people who knew something about U.S.-Yugoslav relations and understood fully the rationale of policy were not the people who had the facilities for talking to the public, and vice versa.

All this has led not only to a serious failure of communication between Department and the public, but to an equally serious failure within the Executive family itself. It is clear that what was recorded on paper as policy towards Yugoslavia has never commanded complete confidence or understanding even in important echelons of the Executive Branch, particularly those that enjoy a special intimacy with Congressional committees. We have seen repeated examples of ignorance or disbelief, sometimes even within the Department of State itself, for the proposition that Yugoslavia is not a member of the Soviet bloc. I have yet to see evidence that this proposition has been fully accepted by the F.B.I., by the security authorities of the Department of State, or by those internal authorities which deal with such matters as visas, re-entry permits, and export controls, not to mention wide echelons of the military establishment. In all of these places we encounter not only persistent disbelief for State Department concepts and interpretations with relation to Yugoslavia but often direct resistance to the logical implementation of established policy in fields of action under their control. It is clear that even if public misunderstanding could be corrected, there would still have to be a greater discipline and coordination of policy within the Executive Branch itself if a constructive policy towards Yugoslavia were to be consistently pursued.

As a result of this, it is not surprising that our present position with relation to Yugoslavia is contradictory, unproductive, and unsatisfactory. It consists, for the most part, of a series of heroic struggles with ourselves. We try, with the one hand, to strengthen the Yugoslav economy; with the other, we move to damage it. With one hand, we lend them money; with the other, we make it difficult for them to earn the money with which to repay us. We maintain in Belgrade a high-powered team of talented and experienced people whose task it is to try to make Yugoslavs think well of us and have confidence in us; at the same time, we commit, or allow to be privately committed, act after act designed to give offense to the feelings of all Yugoslavs, communist or non-communist, private or official. After spending years encouraging the Yugoslavs to render themselves militarily independent of Moscow, we then take measures which oblige them, after an interruption of more than a decade, to turn once more to Moscow for new purchases of military equipment. We claim that we wish to encourage greater independence from Moscow on the part of communist countries; yet when one of them genuinely establishes its independence, we treat it in some respects worse than we did before its independence was achieved. We spend years trying to persuade Yugoslav leaders and others that there is no reason why a socialist country should not have a mutually profitable relationship with the West; yet we take restrictive action against them for which we are unwilling to assign any specific reason and which they must assume to have been taken precisely and only because they are socialist.

I could continue with the list. I am sure I do not need to do so. It is amply clear that no really effective policy can be conducted against such a background.

7. What is to be done?

The present situation confronts us with two requirements. The first is to recover sufficient freedom of action on the part of the Executive Branch to enable it once again to formulate policy toward Yugoslavia with reasonable hope of being able to implement it in a sustained and persuasive manner. This means, of course, the repeal of the legislative provisions requiring denial of MFN treatment to Yugoslavia and restricting the ability of the Executive Branch to include Yugoslavia among the normal recipients of American aid. If and when these objectives have been accomplished, we will still be confronted with the task of reconstructing an effective policy toward Yugoslavia on the basis of the experience we have gathered in the past and in the face of what will, certainly, be a somewhat altered international situation.

For both of these tasks--the negative one of removing existing restrictions and the positive one of charting a new and sound policy--we will require a climate of public opinion, and a background of understanding throughout our own official establishment, wholly different from that with which we are now confronted. Without a far-reaching change for the better in this respect, it is unlikely that we will get very far with the correction of the present situation.

All this seems to me to bespeak the necessity of a major educational effort, designed to gain understanding among the public, among members of Congress and their various staffs, and among the far-flung echelons of the Executive Branch, for a number of fairly basic and simple propositions concerning conditions in Yugoslavia and the bases of our policy. I cannot undertake here to give an exhaustive listing of these propositions; but the following would be examples of what I have in mind. An understanding of these alone would go very far towards putting us in the clear:

(a) Yugoslavia is not a member of the Soviet bloc.

(b) The term ``communist" when applied to Yugoslavia is inadequate, misleading and not conducive to clarity of discussion. It would be better not to generalize, and not to approach problems of policy towards Yugoslavia by attempting to relate this country to categories of countries.

(c) Yugoslav internal institutions, and Yugoslav practices in relations with Western countries, differ drastically and--from our standpoint--favorably from those which are still to be found in the countries of the bloc.

(d) In their bilateral relations with us, the Yugoslavs have shown themselves generally correct and restrained. We have few complaints against their conduct in this respect.

(e) We have no evidence or reason to believe that the Yugoslavs are engaged, either alone or in association with anyone else, in efforts at subversion within our country; they are not, accordingly, part of the ``communist conspiracy."

(f) It is true that there are serious differences of outlook, as between ourselves and the Yugoslavs, on important world problems. We cannot ignore these differences; they constitute an important part of our problem. They do not mean, however, that Yugoslavia is necessarily against us even when she is not for us; nor do they mean that her independence is not useful to us on balance.

(g) What happens to Yugoslavia is important to us, both for its effect on the Soviet and Chinese blocs and for its effect on other non-aligned nations.

(h) Yugoslavia, despite the socialist principles of her leaders and their sympathy for many Soviet positions, is an independent state.

(i) There is a great difference between Yugoslavia's present independent position and what we would be faced with if she would return to full membership within the bloc. This last would mean a deterioration of the gravest sort of the entire strategic situation of the NATO alliance.

(j) What our government most requires in dealing with a complicated ``grey area" as Yugoslavia is first and foremost great flexibility of action. It is the possibility of extending or denying favors, as the situation may require, which is vital to any successful policy.

(k) The task, with respect to Yugoslavia, is not to try to ``buy" friendship by fatuous and unrequited gestures of good will, nor to punish people blindly just because they call themselves ``socialist," but rather to exert the type of discipline on the Yugoslav government which will encourage it to move in a useful direction and discourage it from serving forces hostile to world peace and stability.

The above will serve as examples of the sort of thing that has to be gotten across in all three of the directions I have mentioned: the public, Congress, and the various echelons of the Executive Branch most immediately concerned. This requires, as I see it, a concerted effort, laid out on a large scale and given the impetus of vigorous high-level support. I would not attempt to suggest what all the elements of such a campaign would be; but I might offer the following comments.

A. The Public.

The approach to the public must, as I see it, involve at some point a Presidential statement of more than casual nature. It should involve several public statements or speeches by other high officials. An effort should be made to find qualified younger men who can go around the country, to foreign affairs study groups, universities, etc., with a view to explaining both the objective facts and the bases of our policy. In addition to this, there will have to be high-level approaches to key figures in the press: and not just to two or three of them, but to all who are important in this connection. Particular importance should be attached to publishers of the weekly news magazines. Governmental specialists will know best what use should be made of radio and television. I would emphasize, however, that what is involved here is not just a one-time statement but a persistent, prolonged effort, in which full advantage is taken of the factor of repetition. The moods and misunderstandings we are trying to counter were not created in a day, and they will not be destroyed by one-time impacts. The Washington columnists would be of great help in this, if they would; and I can see no reason why any of them should not be talked to.

B. Congress.

A successful approach to the press would itself be probably the most important single factor in gaining Congressional understanding for what we are trying to do. The misunderstandings I personally encountered just during my own peregrinations around Capitol Hill last summer were appalling. But there is also need for thorough and leisurely consultation with Congressional leaders--something in the way of seminars, designed not to wheedle them into supporting a policy they do not understand but rather to enlisting their responsibility as co-architects of a policy that will hold water. It ought, as I see it, to be borne in upon them that they cannot remain without responsibility in this respect, and that if they insist on confining themselves to purely negative and destructive strictures on the freedom of the Executive, with a view to preventing it from pursuing any policy at all, the whole case will have to be taken before the public and there will have to be something in the nature of an Executive disclaimer of responsibility for the consequences.

I believe that consultations with Congressional leaders could well be supplemented by similar consultations with the leaders of religious groups which have supported negative approaches to the problem of policy toward Yugoslavia.

C. The Executive Branch.

I am not sufficiently familiar with current procedures for devising and implementing policy to make recommendations as to how we should proceed to assure a better coordination of concept and policy within the Executive Branch of the Government. I should think that a new White House-level paper, summing up the bases and nature of our policy towards Yugoslavia, and designed to have validity with all departments and agencies, would be very useful. I would hope there would be some procedure by which we could bring into the preparation of such a paper the representatives of those sections of the Executive Branch of the Government which have shown to date the greatest skepticism about the soundness of established policy and the least willingness to collaborate in its implementation.

I think it particularly important that an effort be made to straighten out our armed services on the subject of policy toward Yugoslavia, and not just the staff of the Department of Defense in Washington but also the various staff colleges and above all the commanders in the field. There have been indications that understanding for the situation in Yugoslavia and for our policy toward this country in many outlying headquarters and commands is substantially nil.

This, as I see it, is what the situation calls for. I have refrained here from going into the specifics of what our future policy towards Yugoslavia ought to be. The course I have suggested is designed merely to enable us to regain the flexibility of action, on the part of the Executive Branch, without which any attempt to chart out policy is an empty exercise. Obviously, to be effective, the sort of campaign I have suggested will take high-level interest and authority; and it will mean that a great many people will have to trouble themselves seriously, and in a coordinated way, about this problem. I see no satisfactory alternative. In the absence of a major effort of this sort, the tendency will unquestionably be to continue to do as we have done in the past: to hatch out what we would like to see as policy in the form of papers written in one narrow compartment of the State Department; to try by various private pleas and tactical devices to gain the collaboration, in the implementation of this policy, of a host of people who have no understanding for its conceptual basis and rationale; and finally, when confronted not only with frustration but with injunctions to proceed along contrary lines in certain fields, then to go ahead with this contradictory conduct, being careful at no point to draw any difficult public issues. It is, of course, this procedure of attempting to solve the problem by tactical devices while avoiding the great issues of intellectual understanding underlying it, which has brought us to our present embarrassments. I have no hesitation in saying that if we can see nothing better than this to do in the future, we would do just as well to confess ourselves subjectively incapable of coping with a foreign affairs problem such as that presented to us by Yugoslavia, and then to fold up our tents, before the Yugoslavs fold them up for us, and figuratively to steal away. Such a confession of inadequacy would, however, be so far from our tradition, and its implications would be so devastating for the future of our diplomacy vis-a-vis not just Yugoslavia but many other areas as well, that one simply cannot contemplate it. There is no reason at all to despair of the progress that could yet be made through the consistent pursuit of liberal and flexible policies toward Yugoslavia. If the price of the privilege of conducting such a policy is a major effort to straighten out American opinion and to obtain better understanding for what is admittedly a baffling and complicated problem of international affairs, I am sure this price is still small compared to the implications of an inability or unwillingness to pay it.

Kennan

Addendum:

After completion of the above, it has been called to my attention that in the description in the initial passages of the paper on U.S. policy from 1948 to 1961, no mention was made of the effort to assure Yugo-slavia's military defense against attack from the East in the early years after the break with Moscow, nor was mention made later on of the fact that the absence of such an attack could be listed among the achievements of U.S. policy. How great the danger of military attack really was, and to what extent our military aid served as an effective deterrent, will never be fully known. Certainly this was one of the purposes which our military aid was originally conceived as serving, and to the extent the danger was real this aid must be considered to have been useful and effective.

GFK

141. Memorandum From the President's Special Assistant for National Security Affairs (Bundy) to President Kennedy

//Source: Kennedy Library, National Security Files, NSF. Secret.

Washington, December 13, 1962.

SUBJECT

Our Policy toward Yugoslavia

George Kennan has written an excellent airgram (Belgrade's A - 543,/1/ attached) on our policy toward Yugoslavia which raises critical questions about our present course and makes important and comprehensive recommendations on what we might do.

/1/Document 140.

In essence, he charges that our policy toward Yugoslavia has been basically revised not by design intention but rather by a series of separate steps, unrelated to foreign policy consideration, and, in his view, the end result has been that our present stance is ``contradictory, unproductive and unsatisfactory." He feels (and in this he is generally supported by the Executive Departments most directly concerned) that U.S. interests would be served better by reverting to the policy lines first formulated during the Truman Administration than by adhering to the present course brought about by recent Congressional action.

It is with this general problem in mind that this afternoon's (5:30) meeting with State, Defense and AID (Mr. David Bell) has been arranged./2/ Actions being sought this afternoon are:

/2/According to the President's appointment book, an off-the-record meeting was held between 5:35 and 6:15 p.m. (Kennedy Library) See Document 143.

a. A decision to have an amendment of the MFN provision of the Trade Expansion Act formally included in the President's legislative program, and discussed (even if only briefly) either in the State of the Union, or Budget Messages, or both.

b. A directive to the Departments of State and Defense to formulate for Presidential consideration, recommendations for military sales program to Yugoslavia.

c. A directive to the Departments of State, Defense and AID to study Ambassador Kennan's recommendations and prepare a program--subject to Presidential approval--for implementing them.

McG. B.

142. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.11/12 - 1362. Confidential. Also sent to Bucharest and repeated to Bonn, Rome, Moscow, Vienna, Warsaw, Prague, Budapest, Sofia, Hong Kong, Zagreb, and Sarajevo.

Belgrade, December 13, 1962, 2 p.m.

743. Following are some personal interpretive comments on pres-ent Yugoslav situation in light of Tito visit to Russia/1/ and other developments. These comments were drafted prior receipt news of Khrushchev speech on Soviet-Yugoslav relations/2/ but they may be useful as comment on same.

/1/Tito visited the Soviet Union December 2 - 21.

/2/In his December 12 speech to the Supreme Soviet, Khrushchev placed the majority of the blame for the Yugoslav-Soviet split on Stalin, indicated that Yugoslavia was following its own road to socialism, and stated that Yugoslavia was a socialist country.


1. Experience Tito is now undergoing in Russia no doubt represents for him personal triumph of his life. Without compromising a single point of course he has adopted in domestic affairs, once so bitterly challenged by bloc, and with undiminished insistence on right to conduct an independent foreign policy free of bloc discipline, he has now won recognition for his movement, by Soviet Premier at least, as respectable independent socialist force, and as honored guest in USSR is being treated with deference greater than he could possibly have earned by servile submissiveness.

2. Tito's triumph will be heightened to extent bloc countries show tendency not only to respect Yugoslav version of socialism but in some respects to imitate it. I can of course be wrong, but proposal for establishment of factory production committees, as proposed in Khrushchev's speech of November 19, seems closely related to example of Yugoslav system workers councils to which Brezhnev so recently exposed; and certain surprising statements by members Soviet Embassy here suggest Russians are scrutinizing Yugoslav institutions with more than detached interest. People have long speculated whether Yugoslav practices and institutions could be brought sufficiently into conformity with those of bloc to permit Yugoslavia's reintegration. That such reconciliation should be effected, in part at least, by bringing bloc practices and institutions into greater conformity with those of Yugoslavia presents new and interesting possibility.

3. Central purpose of Tito, in these discussions in Russia, must be to achieve elimination from binding resolutions of Russian Party Congress and of international body of communist parties of postulate that dogmatism and revisionism are both dangers but revisionism is greater of two. He surely desires to see revisionist portion of this formula junked entirely and to have it formally acknowledged that Yugoslav socialism represents neither revisionism nor any other sort of deviation but merely a respectable variant of Marxist-socialist practice, properly tailored to specific needs and possibilities of Yugoslav people. Presumably, such doctrinal readjustment could be formally effected only by new international gathering of communist parties and by new Russian Party Congress. So far as Russian Party concerned I assume that in light recent events prospects for elimination of offensive formula at a new congress would be more favorable today than they were last year, though there would still be bitter opposition. Such change in Russian Party doctrine would in any case be neither fitting nor effective unless it occurred in harmony with and pursuant to, similar readjustments of doctrine on part of bloc as whole. However, to convene new gathering of parties with view to eliminating this formula would, as things stand today, surely be to invite open and final split with Chinese over this issue. To convene a rump meeting without Chinese group would be to acknowledge and formalize split before Congress ever convened. And if formula should be altered or removed, further question would at once arise as to relationship of Yugoslavs, now formally recognized as respectable, to future international communist gatherings. Yugoslavs would be unlikely to resubmit themselves to bloc discipline and to bind themselves in advance to respect and implement collective decisions sight unseen. Yet if revisionism were no longer ``greater danger," would there be adequate rationale for their exclusion from regular gatherings to which dogmatist Chinese were being admitted? Role Yugoslavs were permitted to play at recent Italian Party Congress,/3/ where concept of ``observers" was apparently stretched quite far, illustrates urgency this problem. In short, Khrushchev's action in trying to patent socialist respectability to a state which insists on independence of policy strikes at heart of present ambiguities in intra-bloc relationships and may operate to heighten still further present divisive tendencies.

/3/At the December 2 - 8 Italian Party Congress, the Yugoslav delegate was invited to address the meeting and received prolonged applause.

4. Yugoslav desires do not necessarily run to producing a split between China and remainder of bloc. One should not be misled by anguished Yugoslav reactions to Chinese attacks. Tito admires Chinese Communists and would like, for his part, to have had good relations with them. His response to Chinese hostility has not been lasting embitterment or even appreciation for imperialistic and misanthropic nature of Chinese Communist regime, but something more like the disappointment of unrequited love. In his eyes cruelest and most Marxist-Communist regime remains more attractive than most liberal non-Communist government. Were Chinese to turn around and treat him well, as Russians are doing, he would glow with satisfaction; and it would cost him no more to forget their previous insults than it does to forget, as he speaks today in Volgograd of wartime Soviet-Yugoslavia collaboration, the countless slights and atrocities suffered by Yugoslavs at hands of Red Army Forces on Yugoslav soil in 1945.

5. While Tito is enjoying red-carpet treatment and applause of multitudes in Russia, Yugoslavia's relations with the West, marked by effects of US Congressional actions, renewed strain on relations with Germany resulting from attack on Yugoslav mission in Godesberg, cold shoulder presented by Common Market, and growing indifference of that portion of Western public opinion which is not actively hostile, are at lowest ebb in years. Obviously, one could conceive of no situation better designed to facilitate reconciliation of Yugoslavia with bloc. It is clear that burden of maintenance of Yugoslav independence vis-a-vis Moscow has now come to rest primarily on sense of self-interest of Yugoslavs themselves, in sense that for first time since 1948 it is scarcely supported by any counter-attractions in field of Yugoslav relations with the West. It has been proven that Yugoslav independence can be maintained in face of reasonable balance in potential advantages of friendship with the two sides. Whether it can be maintained when scales are sharply tipped in favor of East, when West has little to offer and Russians much, is now being tested. Perhaps it can. Tito will of course see no reason to make concessions at expense of his independence where he has won so much without them. But situation is still precarious. If in these circumstances present clarification of Yugoslav relations with bloc ends in manner not detrimental to Western interests, Western powers will deserve credit for luck rather than for effort.

6. Seriousness this situation is heightened by fact that effect of recent events, as I see it, can only be to cause further deterioration in climate of Western opinion concerning Yugoslavia. In light of Cuba and Indo-Chinese conflict, Yugoslavia's claim to be simultaneously non-aligned and socialist, non-aligned for benefit of West and socialist for benefit of East, is wearing dangerously thin. Yugoslav position was revealed in each of these cases as distinctly more socialist than unaligned. At same time, these same conflicts tended to spotlight certain major elements of fraudulence in Marxist-Leninist socialist doctrine: Among others, theses that true socialist country cannot be author of aggression, that socialism is interested only in peace, and that triumph of socialist cause is inevitable and inexorable. All this is bound to stimulate increased impatience even in liberal circles abroad for professed Yugoslav adherence to these principles and skepticism as to its sincerity--a skepticism which will be misplaced primarily only in case of Tito himself and a few ossified followers and I see therefore a further widening of gap between Tito's outmoded attachment to Marxism-Leninism and needs of Yugo-slavia's relationship to West. With Tito now being veritably bathed in type of ideological cant and personal flattery to which he is most susceptible, with Belgrade still smarting under effects of various anti-Yugoslav actions and attitudes in West, and with growing impatience in Western circles with all Marxian socialism but particularly that which masquerades as neutralism, I have gloomy thoughts these days re future our efforts to keep Yugoslav-Western relations on even keel.

Kennan

143. National Security Action Memorandum No. 212

//Source: Department of State, S/S - NSC Files: Lot 72 D 316, NSAM 212. Secret. A copy was sent to the Director of Central Intelligence.

Washington, December 14, 1962.

TO

The Secretary of State

The Secretary of Defense

The Administrator, Agency for International Development

SUBJECT

U.S. Policy toward Yugoslavia

Following a discussion of U.S. policy toward Yugoslavia, the President:

1. Indicated that he was prepared to seek an amendment to the Trade Expansion Act to restore most-favored-nation treatment for Yugoslav goods. The Department of State will prepare a memorandum justifying this course of action. This memorandum should be designed to indicate the advantages of securing most-favored-nation treatment as against the possible alternative course of extending additional aid to Yugoslavia.

2. Authorized the Departments of Defense and State to arrange for the sale of spare parts to Yugoslavia to maintain U.S. military equipment already delivered to the Yugoslav Government. The timing of an announcement of such sales should be coordinated with the White House in connection with the effort to restore most-favored-nation treatment.

3. Directed the Departments of State, Defense and AID to study the proposals and recommendations made by Ambassador Kennan in Belgrade's airgram A - 543/1/ and prepare for the President's consideration possible courses of action.

/1/Document 140.

McGeorge Bundy

144. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.11/1 - 363. Confidential; Priority. Repeated to Moscow, Zagreb, and Sarajevo.

Belgrade, January 3, 1963, 3 p.m.

847. Part Two being sent as separate message for Department only as Belgrade's 848./1/

/1/Document 145.

Part One of Two.

Tito's speech of December 29 and New Year's message (my telegrams [garble--833], 841, 843, 844/2/ round out picture of views and intentions with which he returned from Moscow. After careful study his various statements, we are forced to conclusion that what is implied does indeed represent in several respects an essential change in Yugo relationship to bloc. This is first time we see evidence of intention to make important changes in internal Yugo practices (crackdown on Western cultural influences, increased pressure for collectivization, et cetera) with view to aligning them with those of bloc and thus narrowing ideological differences. This is first time we hear it suggested that Soviet armed forces have role in defense of Yugo socialism. This is first time we note disposition, at least on part of Tito personally, to back off from use of term ``nonaligned" with reference to Yugo itself. We cannot ignore fact failure to join bloc formally now publicly motivated not by alleged iniquity of Soviet bloc politics, as in previous Kardelj thesis, or by concern for maintenance acceptable relations with West, but by tactical considerations pertaining to relations with Afro-Asian states, which considerations Tito indicates also serve Soviet interests. Cracks against West are not new, but failure throughout series of statements to balance them with even most perfunctory phrases of reassurance re future course Western-Yugo relations contrasts sharply with Tito's behavior when he returned from Moscow in 1956 and is flagrant and provocative, especially when taken with his contemptuous repudiation of Western sympathies for Yugo system.

/2/Telegram 833, December 30, 1962, reported on and anaylzed Tito's December 29 speech. (Department of State, Central Files, 768.11/12 - 3062) Telegram 841, December 31, provided further analysis of the December 29 address. (Ibid., 768.11/12 - 3162) In telegram 843, January 1, 1963, the Embassy supplied the highlights of Tito's New Year's Day address. (Ibid., 768.11/1 - 163) Telegram 844, January 1, provided the Embassy analysis of the speech. (Ibid.)

It is clear Tito does not have in mind any normal reassociation with bloc at this stage. What he does contemplate is heightened moral and political support for USSR in international arena, farreaching effort to narrow ideological gap between the two systems, and gradual shifting Yugo position from that of nonaligned country cooperating closely with nonaligned group. These changes, if followed, would leave Yugo's independent status drained of a good portion its previous value for us, and would oblige us, in my opinion, to revise assessment of Yugo's position on which our policy has rested to date.

Department will please bear in mind that in absence any effective US press reporting from Yugo facts on which this judgment based are wholly unknown to US and large parts of world public, but they are familiar to all thoughtful observers here.

In deciding on this turn of policy, Tito must have been guided by any or all three of following considerations:

(A) That US aid and friendship no longer vital to his regime, (B) that our motives in giving aid are so subjective and our fear of Yugo's formal return to bloc so great that we will continue to extend certain programs and favors (notably PL 480) regardless of his stance, (C) that value of collaboration with US has been greatly reduced any way by virtue its unreliability in light of US Congressional and public opinion.

Probably all three considerations play a part, but I suspect (A) would be valid for him personally, even if others did not apply. This would not be true of many in his entourage, who are well aware of vital importance of continuation of PL 480.

Tito's new line has been sprung unexpectedly on country. No evidence prior consultation or discussions in senior party XV [or?] governmental bodies. Obviously no preparation public opinion. Press and Foreign Office apparently left flatfooted. No evidence that story [effort?] has even been made at working out coherent rationale on various informational fronts. Until this process undertaken and completed situation in policy making echelons will continue be one of considerable uncertainty and disarray.

We cannot tell at this stage to what extent Tito's line will be actually implemented. It will arouse much discontent and opposition within hierarchy. In past, there has been tendency to let him talk but to go on with business as usual in absence specific instructions. It is significant that since his return from Russia Yugo press has treated his statements and whole subject Soviet-Yugo relations with stony editorial silence. Obviously, recent statements were intended for Russian ears, not ours. Tanyug agency, in putting out English text of New Year's message, has already made significant change involving flat mistranslation, designed to conceal from unaligned and Western public full sharpness his original remarks. Possible much of his intent may be sabotaged, compromised, or glossed over in practice. However, previous experience suggests that some will stick. In any case, he is Premier, President, and Party leader and mere utterance by him of such sentiments represents political act of high importance.

End Part I.

Kennan

145. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 768.11/1 - 363. Confidential; Priority. Also sent to Zagreb and Sarajevo.

Belgrade, January 3, 1963, 6 p.m.

848. Part II.

1. We have it within our power to affect degree of strain on unity of regime which will be produced by any effort to implement Tito's new line. If we fail to react now or react only in words, Tito will point to this as proof correctness his assessment of what he could get away with, and his hand will accordingly be strengthened. If we make it plain that he is no longer to be permitted to have best of both possible worlds, saying nice things to Russia in public and giving us perfunctory reassurances in private, opposition to his new course will be greatly strengthened.

2. To date I have tried to work here only through Tito, appealing to his own sense of self-interest and making it apparent he could have our friendship if he wanted it and was prepared to reciprocate. So deep is now his commitment against us that I feel we have no choice, while not making personal issue of it, but to strive for intensification of forces which oppose his new line. We now have little to lose. Danger of pushing him back into bloc no longer has same significance as before. His reasons for not formally sacrificing his independence at this time have much less to do with us and our aid than was previously the case. On other hand, he proposes, if undeterred, to take his country on path which would in any case cause that independence to lose much of its value for us. For example important liberalizing and divisive influence Yugo has hitherto exercised on satellites will be forfeited to extent Yugo practices are brought into accord with those of bloc.

3. In weighing our course of action in light Tito's present posture, two things are quite clear to me: (A) in absence any further and reassuring statement by him making plain his determination to keep country genuinely nonaligned and to cultivate his relationship with West, we cannot proceed to full implementation of program set forth in my A - 543./1/ Some parts this paper would still stand in light recent events. Others would have to be written differently today. Urge again all this be placed in abeyance pending clarification present Yugo position. (B) We should not attempt to use MFN issue as means of pressure on Yugos. This was senseless and inappropriate measure from start. I think President should fight this as straight issue of principle in connection his Constitutional responsibility for conduct foreign policy, and should not encourage view that suitability of such measure stands or falls with political climate of our relationship with Yugoslavia.

/1/Document 140.

4. Fact is that at present juncture our only effective means of pressure on Yugos is PL-480 agreement, which we have legal right to suspend or cancel at any time. No evidence Yugos care about other aid programs. They have no prospect getting new ones anyway in present circumstances. Continuation PL-480 over coming winter they desperately need.

Whether or not we are to react actively in case Tito persists in pres-ent course is therefore mainly question of whether we are prepared to play PL-480 card. We would be mistaken to think he would be impressed, or his opponents strengthened, by empty pleas or protests that stop short suspension of wheat shipments.

5. Should we be disposed to play this card in last resort, our procedure should be as follows: I should go to Tito on instructions. I should point out our policy of recent years has been based on premise Yugoslavia was truly unaligned nation in substance as well as in form, but his recent statements arouse doubt whether this is still case. President Kennedy has instructed me, I should say, to voice hope that if these doubts are unjustified, he, Tito, would make early public statement to this effect, making it clear Yugoslavia is not morally or politically aligned with any outside bloc or political force. I should insist we can not be satisfied with private and unpublished assurances. Carefully refrain from giving any indication what we would do if he fails to make such statement. Simultaneous and similar statement would be made to Micunovic.

If after proper interval (perhaps one to two weeks) there has been no satisfactory response (and it is unlikely there will be one), President would draw attention publicly to unsatisfactory implications of Tito's recent statements, would explain that we had waited some time for some more reassuring word from him but none had been heard, and would say that he had therefore ordered thorough re-examination of premises our policy toward Yugoslavia in light recent events. He would add that pending completion this re-examination he had ordered suspension PL-480 program. All this would be strongly plugged to Yugoslavia on VOA.

6. This course would give following implications: (A) It would infuriate Tito and would place our USIS libraries and other facilities here in some jeopardy. However, pro-Soviet course Tito intends to steer would, if he gets away with it, imply gradual freezing out of these facilities anyway at some point. We are all agreed it would be better to throw them into balance now, while they still have some weight, than to lose them by erosion and get nothing in return.

(B) Effect on our own domestic opinion would be such that aid to Yugoslavia would presumably be not for long time to come. [sic] But finding in question would be objectively justified, and frank admission of it might serve to regain Congressional confidence in objectivity and integrity of Executive in approach to Yugoslav problem and thus facilitate resumption programs at later date if circumstances were to warrant.

(C) Effect on Yugoslav policy-makers would be dual. Some would use it as instrument for closer relationship with bloc. But since reasons for Yugoslav's abstention from formal association with bloc no longer derive mainly from considerations of relations with us, I doubt this factor would be decisive. Effect this action would be to heighten greatly distrust here of Tito's good judgment and discontent with his intended course. It might well bring other leaders to insist more vigorously on his early retirement into honorary Presidential position, which could only be in our interests.

(D) For other neutrals this would be striking demonstration US unwillingness to be blackmailed by threats of intimacy with bloc and unwillingness to concede non-aligned status when certain limits are passed in pursuit pro-Soviet and anti-Western course.

7. If we are not prepared to play PL-480 card, then we should keep quiet, make no approaches, let aid programs now under implementation run their course, and reply to any and all requests for new favors by saying Tito had, through his recent statements, deprived us of earlier possibility of being helpful. What we should not do, and what I implore Department to spare me, is to go to Yugoslavia making pious noises of unhappiness and threats of displeasure which we have no intention of backing up in practice.


Kennan

146. Paper Prepared in the Department of State

//Source: Department of State, S/S - NSC Files: Lot 72 D 316, NSAM 212. Official Use Only. Drafted by Katz. Attached to a memorandum from Brubeck to Bundy, January 3.

Washington, January 3, 1963.

EFFECTS OF DENIAL OF MFN BENEFITS TO YUGOSLAVIA AND POLAND

Section 231 of the Trade Expansion Act of 1962,/1/ requiring the denial of most-favored-nation tariff treatment to Yugoslavia and Poland, strikes at the heart of United States policy maintained for over 14 years with productive results for the furtherance of United States national interests. United States policy during the last three Administrations has been based on the conviction that more active relations in economic, cultural, and political fields with the regimes and with the peoples of Eastern Europe can be exploited to increase the presence and influence of the United States within the communist world and, therefore, to support, stimulate and exert some directing force on courses of action more favorable to us. Section 231 repudiates this long-standing policy and leaves as the alternative a policy of isolating Eastern Europe and withdrawal by the United States from the area, abandoning the field to whatever forces may be at work there. Such a policy would be the antithesis of our current policy and the opposite of our national need. A policy of isolation and withdrawal might be appropriate if the United States were faced with a violent solution to the problems between East and West; one in which hostilities were inevitable if not imminent. In any situation where the United States stake must be protected over the long run, however, in circumstances which more closely resemble peace than war, a policy of withdrawal which attempts to isolate the communist world as a whole would be defensive, barren and destined to fail. This judgment is supported by the developments in Eastern Europe over the past decade and a half, as well as by the increasingly apparent opportunities for Western influence in the communist world.

/1/For text of the Trade Expansion Act of 1962, P.L. 87 - 794, approved October 11, 1962, see 76 Stat. 872. See Document 130.

Yugoslavia's defection from international communism in 1948 was a landmark in post-war history. This event was a severe blow to the myth of the monolithic unity of communism and demonstrated that despite Marxist theories and Soviet repression, the Soviet Empire was highly vulnerable to nationalistic forces among the countries under its domination. The effects of Yugoslavia's defection were immediate. From a strategic viewpoint, the Soviet salient to the Adriatic was pushed back, Soviet pressure on Italy and Greece was relieved and the threat to NATO's Southeastern flank removed. Politically, Yugoslavia's defection produced a profound effect within the communist world, the repercussions of which are continuing at the present time. The ability of the Soviet Union to hold together its Empire was called into question, and nationalistic forces within the Soviet bloc were given courage and strengthened.

Freed from the necessity to imitate the Soviet system, and exposed to the contagion of Western influences, Yugoslavia has substantially and significantly altered its own economic and political practices. Its unique internal system as well as its position of international independence is at the root of the unbridgeable ideological differences between Yugoslavia and the Sino-Soviet bloc. There is no evidence arising from the latest attempt at a Yugoslav-Soviet rapprochement to indicate that these basic differences can be resolved. On the contrary, the consequences of these differences continue to operate as a divisive influence in the Sino-Soviet bloc. The events of 1956 in Poland and Hungary, Albania's present defiance of the USSR, and the current Sino-Soviet dispute are all directly traceable in significant measure to Yugoslavia's independent course since 1948.

After the Yugoslav break in 1948, the United States in concert with its Western allies moved quickly to exploit the windfall to Western interests represented by Yugoslavia's defection from the Soviet bloc. Yugoslavia was given material and psychological support which assisted it in establishing firmly its national independence. Similarly, when in 1956 Poland embarked on a more independent, albeit circumscribed, course of action, the United States and other Western countries demonstrated by their support that there was a clear alternative to complete dependence upon, and consequent domination by, the USSR.

It is the essence of our policy toward Eastern Europe that those countries which have a will and a capacity to assert and defend their independence can have normal and fruitful relations with the United States. A major instrument of our policy toward such countries has been the provision of assistance, principally in surplus agricultural commodities. Our policy looks forward to the early replacement of such assistance by normal trade and financial relations. It is clear, in any event, that aid is not an acceptable alternative to trade over the long term, either to the United States or to Yugoslavia or Poland. If the past gains of our policy are to be maintained, then we will have to build significant and lasting trade relations with these countries. This, however, will be impossible without authority to extend most-favored-nation benefits.

The denial of most-favored-nation benefits will have a serious effect on Yugoslav and Polish trade and economic relations with the United States. Analysis of trade statistics with Yugoslavia indicates that more than 90 percent of its exports to the United States would be subject to significantly higher duties. Poland has enjoyed MFN benefits since the end of 1960 and thus has only recently begun to develop a market here. The loss of trade with the United States, taken in conjunction with the likely adverse effects of the Common Market on their trade with Western Europe, will leave Yugoslavia and Poland with little confidence in the possibility of relying on fruitful economic relations with the West. We will thus have narrowed their possible courses so that they will be driven back toward economic dependence upon or close association with the Soviet bloc. We will thus have contributed to a goal neither Stalin nor Khrushchev has been able to achieve, the unity of the communist world.

Additionally, by denying Yugoslavia and Poland the ability to earn dollar currency, we will make it impossible for them to service their substantial financial obligations to this country. Yugoslavia's dollar obligations will increase to $13 million annually beginning in 1964. Poland's obligations over the next several years are in excess of $10 million annually, including $2 million to be paid to American nationals for claims compensation. In this latter connection, it should be noted that MFN benefits were restored to Poland late in 1960 following its agreement to pay $40 million over a twenty-year period to American nationals whose property was nationalized in Poland. Termination of MFN benefits should call into question the continuation of these payments.

We have every reason to be greatly encouraged by events in Eastern Europe which are unquestionably running in our favor. There are innumerable evidences that in each of the countries of the European Soviet bloc there are mounting pressures for liberalization, for more nationalistic courses, and for better relations with the West. International communism is being subjected to major centrifugal forces which invite our efforts to increase our presence and influence in Eastern Europe. This is not the time for us to write off our extensive investment in Eastern Europe and to ignore thereby our vital national security interests there. Only Moscow could profit from such action.

147. Telegram From the Department of State to the Embassy in Yugoslavia

//Source: Department of State, Central Files, 768.11/1 - 363. Confidential; Niact. Drafted by Mudd; cleared in RSB, P, and SOV; and approved by Tyler. Repeated to Moscow.

Washington, January 4, 1963, 6:06 p.m.

575. Embtels 841, 844, 847./1/ Following conclusions represent consensus Dept and Intelligence community re present state of Yugoslav-Soviet relations in light recent developments surrounding Tito's visit to USSR:

/1/Telegram 847 is printed as Document 144. Regarding telegrams 841 and 844, see footnote 2 thereto.

1) Yugoslavs are not prepared to surrender any part of their sovereignty or independence on bloc's behalf;

2) Yugoslavia still considers itself member nonaligned group, and does not seem to be preparing to drop its policy of opposing all blocs;

3) Tito's remarks on ``decadence" in art, irresponsibility certain intellectuals, and necessity to expand ``socialist agriculture" at expense private sector are not sufficiently clear or different from similar past statements to justify definite conclusion that an appreciable hardening of UCY line in internal affairs is in offing;

4) Increasing sharpness of Sino-Soviet dispute is a major factor in improvement Soviet-Yugoslav relations.

Soviet-Yugoslav ideological conflict has not been resolved. Measured against backdrop acute Sino-Soviet dispute, it appears to have been reduced to secondary importance in the interests of common anti-Chinese attitude. Such compromise likely to last as long as both sides find it convenient. In contrast to 1956, no agreement on inter-Party affairs announced, nor has there been any claim to agreement beyond field of general foreign policy where Yugoslavs previously admitted substantial identity or similarity of views with USSR. Neither Khrushchev nor Tito have made any effort to conceal existence of differences although in larger interest common anti-Chinese stance, both seemed to have agreed it serves interest both countries not to make these differences obstacles to increased cooperation. Contrary to Yugoslav hopes, neither Soviet credits nor associate status CEMA obtained; however, these subjects may still be under discussion by economic delegation apparently still in Moscow. In our analysis, from information gathered here from Intelligence and other sources, we see no clear-cut indication at this time that Tito - Khrushchev discussions have deflected Yugoslavia from its now long-established internal and foreign policies. Belgrade still appears to have high aspirations to a prominent role among non-aligned nations, and does not appear to have altered its hitherto staunch determination to preserve its independence and to refuse subordinate Yugoslav national interests to foreign alliances or other demands.

We tend to view Tito's recent statements and actions within broader framework Sino-Soviet dispute. We believe that, for the time being at least, Soviet and Yugoslav leaders find their state interests better served by common anti-Chinese attitude. There seems little doubt that Soviet-Yugoslav relations have improved measurably, but this appears to have been largely at Soviet initiative. Khrushchev's apparent acceptance Titoist theory all countries free to find own road to socialism represents important concession and one which could cause Moscow serious future trouble. Tito's visit has undoubtedly accelerated already existing trend toward closer relations with the Communist states of Eastern Europe, including USSR. Warmth of Soviet reception, Tito's inordinate ego, and his well-known desire for vindication among Eastern European bloc countries and communist parties elsewhere have led him to be more expansive and more imprecise in his public utterances than usual. Tito's past bitter experiences with the Soviets, Yugoslav difficulties in 1955 - 1956 and again in 1957 in reaching accommodation with bloc raise possibility present warmer Soviet-Yugoslav relationship may not endure indefinitely.

We do not take too seriously Tito's sputtering attacks on internal obstructions and recalcitrance. He has made similar threats on almost every important public occasion past decade and without visible after-effects. His recent remarks on this score did not depart substantially from lines of action proposed in Split last May and reiterated at UCY plenum in July.

We look forward to discussing this subject with you more in detail during your consultation period here next week./2/

/2/In telegram 864, January 5, Kennan responded that while his actions would be guided by the Department's views, he continued to doubt the wisdom of the policy line. (Department of State, Central Files, 768.11/1 - 563)

Ball

148. Memorandum From the Ambassador to Yugoslavia (Kennan) to Secretary of State Rusk

//Source: Department of State, Central Files, 611.68/1 - 1063. Confidential. Drafted by Kennan who was in the United States for consultations.

Washington, January 10, 1963.

SUBJECT

Relations with Yugoslavia

Mr. Secretary:

1. I have given careful thought to the discussion we had yesterday evening,/1/ and especially to the suggestion that the m.f.n. matter might be allowed to lie over until after Khrushchev's visit to Belgrade. I should like to make my position on this clear.

/1/No record of this conversation has been found. According to a memorandum by Vedeler, January 10, this memorandum by Kennan was a result of Kennan's meeting with Rusk ``in which the question of postponement of MFN action until after Khrushchev's visit to Belgrade was raised by the Secretary." (Memorandum by Vedeler, January 10; Kennedy Library, National Security Files, Countries Series, Yugoslavia)

2. I consider that the m.f.n. issue should not be linked in any way to the ups and downs of Yugoslav policy and of Tito's statements. The denial of m.f.n. to Yugoslavia was a senseless, destructive action. It was justified neither by the circumstances of the moment at which it was decided by Congress, nor by the circumstances of the present moment. It poisons our entire relationship with the Yugoslavs; no effective constructive action can be taken by either side so long as this restriction remains on the books. It is up to us to get it removed at the earliest possible moment. I hope that the President will see fit to make it known publicly in the very near future that he is asking the Congress to remove it, and I urge that he do so. In so doing, he should make it clear that this has nothing to do with Yugoslav actions or statements of the moment; that the denial of m.f.n. was itself not in the national interest; and that he cannot take responsibility for handling effectively our relations with this country, which plays so crucial a role in relationships within the communist bloc, unless he can have free hand to guide our economic policy in essential respects as the situation may require. He should emphasize that it is essential to him to have this freedom not just in the present situation but in any conceivable situation.

3. Should the President be disinclined to ask at this time for the removal of the m.f.n. restriction, then I should like it understood that I am firmly opposed to our undertaking any active diplomatic steps vis-a-vis the Yugoslavs--both now and so long as this situation prevails. This applies to the effort to put pressure on Tito recommended in my recent telegrams. It applies to any other variants of the idea of attempting to communicate with the Yugoslavs in the coming period concerning the state of our mutual relations. So long as the President has not called, clearly and publicly, for a removal of the m.f.n. restriction, any initiative of this sort would be bound to be misunderstood. It would also be quite inappropriate, in this case, to attempt to implement the ideas of the long airgram I submitted at the beginning of December.

4. This is a very late and crucial moment in our relations with the Yugoslavs. If no initiative is taken by us in the m.f.n. matter, we must expect early retaliatory action by the Yugoslavs, which will inflame tempers here and will probably cause the situation to become wholly out of hand. I should not expect, in this case, for example, to see our USIS libraries last the winter; and I am sure this would not be the only means found to harass us.

5. Should the President at this time make the request for removal of m.f.n., and in such way that it would be clear to the Yugoslav leaders that he is doing all in his power to achieve the elimination of this restriction, then I continue to favor the use of whatever other cards we have in our hands with a view to putting pressure on Tito and embarrassing him in his effort to lead his country along an anti-Western, anti-liberal, and exclusively pro-Soviet course. But I do not consider that the decision whether or not the President should take this action, or when, should be permitted to become a matter of discussion, or bargaining, with the Yugoslavs. We made the mistake, it is up to us to correct it.

6. I can see no more suitable way for the President to ask for the removal of the m.f.n. restriction than in the State of the Union message. Should he wish to broaden this into a request for authority to dispose of his own discretion over m.f.n. matters in the case of all bloc countries, avoiding a specific mention of Yugoslavia, I would consider this wholly justifiable from standpoint of the national interest, and no less acceptable from the standpoint of our relations with Yugoslavia./2/

/2/A memorandum attached to the source text from Swank to Tyler noted: ``As you know, the Secretary saw Ambassador Kennan Wednesday evening, and we think it likely that the subject of the attached memorandum was discussed by them. Since the recommendation in paragraph 6 is now overtaken, we are returning the memorandum to you in the thought that you may wish to raise with the Secretary in another manner any unresolved points concerning our future course of action with respect to the MFN issue." (Department of State, Central Files, 611.68/1 - 1063)

George F. Kennan

149. Memorandum of Conversation

//Source: Department of State, Presidential Memoranda of Conversation: Lot 66 D 149. Limited Official Use. Drafted by Kennan on January 17 and approved in the White House on January 28.

Washington, January 16, 1963, 5 p.m.

SUBJECT

Yugoslavia

PARTICIPANTS

The President

Ambassador George F. Kennan

Yesterday, on January 16, I spoke with the President on the subject of our relations with Yugoslavia, and particularly the question of the denial of most-favored-nation treatment to Yugoslavia. I explained to him that so long as this latter issue remained unresolved, the effect of the Congress' action was to paralyze our policy towards Yugoslavia and to make it impossible for us to undertake useful initiatives.

The following is my understanding of the President's views as expressed in this conversation:

(a) There has been suggested to him some sort of a scheme whereby action to achieve the removal of the m.f.n. denial would be initiated not in connection with the Trade Bill but rather in connection with the new Aid legislation. This proposal was not explained to me in detail, but I gained the impression that the initiative was to be taken by the Senate Foreign Relations Committee. The President, as I understand it, is favorably disposed towards this suggestion, and means to pursue it.

(b) With a view to facilitating this procedure, he wished me to see Senators Fulbright and Mansfield and to present to them my views on the effects of the m.f.n. denial.

(c) The President considered that if this procedure were successful, action could scarcely be expected in less than 5 to 6 months.

(d) The President was prepared to consider making a public statement about the m.f.n. problem in reply to a question at his press conference. He desired that I should submit to him a suggestion for wording he might use in this connection.

The President said he thought he had been told he had sixteen months' grace in denouncing our Treaty with Yugoslavia on the basis of which m.f.n. treatment is extended, and he was not sure what this meant. I told him my impression was that the wording of the Trade Act made it incumbent upon him only to give notice ``as soon as practicable" of our intention to terminate operation of the Treaty, and that one year would have to elapse, after such notice was given, before the Treaty would cease to be in effect. He asked me to see to it that he was put right about it in case my understanding was not correct.

I gave it to him as my opinion that if the new Congress was in any way seized of the question of revoking the m.f.n. denial, or if this was the subject of active consideration by any Congressional committee, he would be justified in finding that this was not a ``practicable" moment for giving notice of the termination of the Treaty.

I believe the President understood, and concurred in, my view that while a statement by him in press conference would, of course, be helpful in steadying the reaction of the Yugoslavs, the latter cannot be expected to be fully reassured until it becomes clear that favorable action is to be taken by the Congress; and that in the meantime no major initiative by us, designed either to deflect the Yugoslav President from his present political course or to achieve a better understanding in American public opinion of the Yugoslav situation and the requirements of a constructive American policy there, could be expected to be useful.

150. Memorandum From the Ambassador to Yugoslavia (Kennan) to Secretary of State Rusk

//Source: Department of State, Central Files, 611.68/1 - 1863. Limited Official Use. Drafted by Kennan.

Washington, January 18, 1963.

SUBJECT

Yugoslavia

You will have seen the memorandum of my conversation with the President./1/ I am taking this means to give you my views as to what this means from the standpoint of our relations with Yugoslavia.

/1/Document 149.

It is clear that the President, for reasons we must all respect, is not disposed to make a major head-on issue with the Congress of m.f.n. for Yugoslavia. A reply to a press question will be helpful, but there is no reason to hope that this alone will serve to deflect Tito in any appreciable degree from the line of independent alignment with Moscow, on which he is embarked. At the best, we face five or six months of uncertainty as to whether the m.f.n. denial will or will not be rescinded. During this period, we can undertake no major initiatives. We cannot undertake a wide domestic program to improve U.S. opinion with regard to Yugoslavia, for Tito is apt to trip us up at any time with new unfriendly gestures or statements which appear to belie our thesis. We cannot, on the other hand, take a hard line towards Tito to any good effect; for its impact on the Yugoslav public would be confused by the m.f.n. issue, and it could easily come to be regarded here as inconsistent with the effort to get the m.f.n. denial rescinded.

This spells, as I see it, a further period of enforced inactivity on our part. It is very likely that in the course of this period our relations with Yugoslavia--and indeed the latter's relations with the West in general--will continue to deteriorate. Tito's public support of Soviet positions may now be expected to be intensified, and this will continue to give offense here insofar as it becomes known to our public. There may very well also be increased pressures against our personal contacts in Belgrade, harassment of our reading-rooms and other USIS facilities, and a general effort to break up the positions and the influence we have won over the course of the years in Yugoslavia. I hope it is understood here that there will be very little we can do, in the present circumstances, to resist these attacks.

What has been at stake in our relations with Yugoslavia in recent years has been the question whether a socialist country which had rendered itself independent of Moscow's control might be persuaded that it could have, on the basis of nonalignment, a relation with the West which offered possibilities greater than those of a renewed association with the bloc. It was important for us to document the positive answer to this question, not only for its meaning to Yugoslavia itself, but also for the lesson it would carry to other countries of the communist bloc, or to countries which might contemplate joining it.

Up to 1960, we were doing quite well in this effort. The overwhelming majority of the Yugoslav people, and I think the preponderant portion even of the party and governmental leaders, were persuaded of the desirability of maintaining a relationship with the West at least as good as that with the East. We were, in fact, close to complete success except in the case of Tito himself and a few of his associates; and there was reason to hope that it would be only a short time before Tito would be obliged, by age and infirmity, to yield to younger people who had a more realistic concept of Yugoslavia's true interest.

These trends of Yugoslav opinion notwithstanding, Tito has been making a determined effort, ever since mid-1960, to lead his country back to a position which would be one not of disciplinary subordination to Moscow, but of such close intimacy and partnership with it that the implications would be scarcely more favorable from our standpoint. The immediate impulse to this effort came, no doubt, from the growing rift between Moscow, on the one hand, and Communist China and Albania on the other, which appeared to Tito to offer favorable possibilities for accommodation with Moscow on his own terms. Ideological prejudice, and a decline in the need for Western aid also played a part. More recently, the tendency has been greatly stimulated by the advanced stage of the Soviet-Chinese conflict, by Tito's embitterment over the m.f.n. action and other developments in Western policies, and by Khrushchev's clever and receptive treatment of him personally.

We do not know how successful Tito will be in this effort. It is widely unpopular in his entourage, as well as with the Yugoslav public at large. Liberal practices and approaches have now taken such root in Yugoslavia that it will not be easy to do away with them. The effort to find a place for Yugoslavia as an independent entity within the moral and political framework of the bloc will raise, furthermore, difficult problems of precedence for Khrushchev. For these reasons, Tito's undertaking will no doubt encounter many difficulties. It may even have serious repercussions on the unity of the Yugoslav state. In any case, what emerges from the effort is not apt to be entirely what Tito would like to see.

I am not, therefore, predicting certain disaster, in the sense of a total and final return of Yugoslavia to the bloc. But there are three points about which we ought all to be clear at this stage:

(a) This tendency is adverse to Western interests in the cold war. It holds, in fact, real dangers for us. Yugoslavia's geographic position is a highly strategic one. Any return of Soviet military influence or activity to this area would represent a basic deterioration of the strategic situation of the NATO powers, and could easily affect Yugoslavia's relations with Italy, Greece and Austria. If Yugoslavia, furthermore, after fifteen years of experimentation with liberalization and free association with the West, decides nevertheless to sacrifice her Western ties in favor of a close and, in the political sense exclusive, association with the bloc, this is bound to have an important effect on other bloc countries, discouraging any tendencies there towards greater independence, lending strength to Moscow's position that there is no acceptable place for a socialist country between the Western and Eastern political worlds.

(b) However successful Tito may be in his effort to carry Yugoslavia to a position of independent association with the bloc, the very effort is bound to take place at the expense of Yugoslavia's relations with the West, generally, and particularly with us. This represents for us a loss in itself. We have a stake in our relations with that country measured by the investment of more than two billion dollars in the various aid programs and--more important still--the effective effort, over the course of the years, of a great many able and devoted people. Whether Tito succeeds or does not succeed with what he is undertaking, the fruits of this investment--the reading-rooms, the exchange programs, the entire progress made in opening up Yugoslavia to Western influences--are apt to become a casualty to the very effort he is conducting.

(c) The inactive stance to which we are condemned means in effect that we are resigning our power, over the coming months, to influence the outcome of Tito's undertaking. The combination of our m.f.n. denial and of the attitudes of the West Germans and the Common Market deprives the Yugoslavs of any favorable prospects in the development of their economic and political relations with the West. This predetermines, in a manner highly unfavorable to the West, the background situation in the face of which the differences of policy as between Tito and much of the hierarchy have to be resolved and Yugoslavia's choices arrived at. It can only be said that if, in present circumstances, the Yugoslavs stop short of a complete realignment with the bloc, this will be due almost solely to internal forces of resistance within Yugoslav society (greatly stimulated and strengthened to be sure by our efforts in previous years) and not to any favorable immediate prospects in Western-Yugoslav relations. If Yugoslavia remains nonaligned in these present circumstances, I am afraid it will be largely in spite of, rather than because of, the positions taken at this juncture by our own Government, the West Germans and the Common Market.

I would make these observations because to remain inactive in these circumstances represents a certain historic responsibility. I do not mean to plead here for the alteration of our stance; I have made my recommendations from Belgrade and, as far as I am concerned, they stand. I do wish to make sure, before returning for this further period of service as Ambassador in Yugoslavia, that there is a full awareness on your part and that of the President of the implications of the m.f.n. denial and the course we are proposing to follow in the coming months.

George F. Kennan

151. Telegram From the Department of State to the Embassy in Yugoslavia

//Source: Department of State, Central Files, 611.0041/1 - 2663. Confidential; Limit Distribution. Drafted by Vedeler, cleared by Davis and Thompson, and approved by Rusk.

Washington, January 26, 1963, 5:58 p.m.

650. For Ambassador from the Secretary. Yugoslav Embassy very pleased with President's press statement on MFN January 24/1/ and Embassy official informed Davis Embassy has recommended to Belgrade meeting at this time between you and President Tito. Without exaggerating importance of occasion or results of such meeting I believe that it would be desirable. There is need to keep open line of communication with Tito and this appears to be opportune time for such effort in view of your return to Belgrade after consultations here and your meetings with President and myself, President's press statement on MFN and Tito's speech January 23./2/

/1/For text, see Public Papers of the Presidents of the United States: John F. Kennedy, 1963, p. 94.

/2/In his January 23 speech, Tito affirmed his desire for good relations with the United States.

Suggest therefore you request meeting with Tito at which you would seek Tito's views on present state and future development of our bilateral relations, after introducing the subject with following points:

1. US Government has noted expression of intention in his last speech to maintain and promote good relations with US and other Western countries as well as with all other countries regardless of different social systems.

2. President Tito's Government has doubtless noted President Kennedy's statement of intention January 24 about seeking change in MFN provision of Trade law.

3. US Government is of the view that these two actions occurring almost at the same time help to clarify a situation in our mutual relations that has tended to develop recently in a negative direction and make for better understanding which US Government constantly desires to improve and foster.

I think that your main purpose after making these points should be to try to draw Tito out in expressing his views. In course conversation it would be useful at appropriate time to suggest to Tito US does not consider that in order for Yugoslavia to have good relations with US it must have bad relations with the Soviet bloc but we hope that development of good relations with latter would not be at expense of relations with US.

Rusk

152. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, 611.0041/1 - 3063. Confidential. Also sent to Bucharest and repeated to Moscow, Paris, Warsaw, Prague, Budapest, Sofia, Bonn, Sarajevo, and Zagreb.

Belgrade, January 30, 1963, 7 p.m.

989. Called this morning on President Tito, made introductory remarks as outlined in Secretary's 650,/1/ then had lengthy discussion of problems Yugoslav policy and our relations. This was exceptionally frank talk, and I would very much hope we can avoid leaks.

/1/Document 151.

Tito appeared nervous, uncertain, defensive, and at times almost confused. I had strong impression this condition flowed less from my particular presence than from arguments he had been having with members of his senior entourage over line taken in recent speeches. So much was this so that on several occasions, apparently forgetting nature of my interest, he embarked on extensive defense of positions he had taken on internal matters which I had not even mentioned and which were not our concern but were obviously on his mind. Following are highlights his statements:

1. While insisting throughout that Yugoslavia had no reason for or intention of abandoning her independence, Tito said term ``uncommitted" (Russian term he used means literally ``unengaged") no longer was accurate as description of Yugoslav position; Yugoslavia was ``committed" to support peace-loving forces everywhere; it was inaccurate to say she was not committed.

2. The word ``bloc" he thought was also losing its relevance to prevailing conditions and hence inappropriate. (Department will recall Khrushchev's lengthy argument, in recent Berlin speech, against identification of Warsaw Pact with various free world pacts, by ``leaders of certain countries which call themselves unengaged," and against similar use of word ``bloc" with relation to Warsaw grouping.)

3. Tito spoke disparagingly of the Warsaw Pact as no longer fitted to modern conditions. He expressed hope that it would be soon possible to dispense with it and with military alliances generally.

4. When I emphasized importance to US of Yugoslavia's not belonging to Warsaw Pact and preservation of her independence vis-a-vis Moscow, he replied by voicing opinion that satellite countries were themselves rapidly losing quality of dependence on Moscow and were beginning to show real independence of policy in many respects (please note my 743,/2/ paragraph two). Implication was that issue of independence from Moscow was losing its meaning in case of a socialist country, and would soon no longer be important distinction between Yugoslavia and other East European states.

/2/Document 142.

5. Tito spoke at length about US aid. He said (as in Skoplje speech last year) that Yugoslavs had felt themselves entitled to material aid on a major scale from other allies as consequence of their great material and human losses in the war; that they had been greatly disappointed in what they got out of Germany by way of reparations; that they had therefore regarded our aid as something they were really entitled to; and that they were weary of constant reproaches of ingratitude on our part. They were anxious to dispense with our aid. He himself had given orders two years ago that they were to free themselves from it as rapidly as possible. He hoped they would not have to ask for any further wheat under PL 480; from now on they expected to buy it in normal fashion. Once they were no longer taking aid from us, there could be no further pretext for the sort of abuse to which they had so often been subjected in certain congressional circles.

6. He entered into usual ``plaidoyer" about Khrushchev's love of peace and objected violently when I pointed out that Khrushchev was not our friend and wished our people no good. Stressing overriding importance of supporting Khrushchev's side in intra-Bloc differences, Tito stated outright what we have long suspected was his position, namely: that he did not feel, in view of importance of what was at stake, that they could afford to be unduly influenced by reactions of Western opinion in rendering such support.

7. He went over usual list of grievances against Western policy: Notably MFN, unprohibited Ustashi activities, coldness of Germans and Common Market to Yugoslav trade requirements (characteristically, he even included our unwillingness to give further aid, although a moment later he was saying they did not want it). He said Yugoslavs were obliged to strengthen economic relations with the East because we were undependable. He never knew at what point they would get hit by some whim of the Congress. In addition to going over usual explanations about MFN, I told him that in other circumstances by Government might have felt itself in a position to make major effort to correct misunderstandings and prejudices about Yugoslavia in American opinion but that in light of uncertainty concerning Yugoslavia's future relations with Soviet Union it was difficult for us to take such responsibility. Mentioned particularly in this connection Khrushchev's forthcoming visit. He reacted strongly to this last, denying we had anything to fear; but when I reiterated that we could not afford to encourage our public to believe things which might be changed in near future, he replied, significantly, with suggestion we might limit ourselves to trying to give them a true picture of situation as of today.

Kennan

153. Telegram From the Department of State to the Embassy in Yugoslavia

//Source: Department of State, Central Files, POL W Ger-Yugo. Secret; Priority. Drafted by Katz and Barnsdale; cleared by Vedeler, Tyler, Ger, RPE, and S/S; and approved by McGhee. Repeated to Bonn, Moscow, Paris, and London.

Washington, February 21, 1963, 7:11 p.m.

728. Embtel 1098./1/ Department considers implementation Yugoslav decision described reftel will produce most serious consequences for Yugoslavia and for West. Believe Yugoslavs should be left with no doubt our views. Embassy should present through same channel in Foreign Office Department's considered views along following lines making clear that presentation is on instructions.

/1/Telegram 1098, February 19, reported that the Yugoslav Government had decided on a ``retaliatory policy" toward the Federal Republic of Germany over its handling of the two states' bilateral relationship. (Ibid., POL 7 W Ger-Yugo)

In November 1962, a group of Croatian nationalists attacked the Yugoslav Trade Mission office in Bad Godesberg, firebombing the office suite. Yugoslavia, although without diplomatic representation in the Federal Republic, launched a strong protest of German handling of the incident. On March 12, 1963, the Federal Republic dissolved the Croat organization ``Brotherhood of the Cross" as the agency responsible for the attack. Twenty-five Croats were tried and convicted for roles in the attack in June 1964.

Department appreciated Yugoslav consideration informing this Government in advance Yugoslav action. Yugoslav foreign policy, including policy toward Germany, is of course for Yugos to determine. Decisions, however, of such great importance and fraught with such dangers that we feel obliged as friend Yugoslavia most earnestly to urge reconsideration.

We recognize that Yugoslavia acting out of disappointment and frustration that its complaints against Germany have not yet been answered. Would hope however Yugoslavs would weigh carefully whether a policy of retaliation would contribute better results and whether Yugoslav interests in long term served by such policy. We feel certain Yugoslav interests would not be so served. On contrary, retaliatory policy regardless of true motives would be widely interpreted abroad as related primarily to Yugo-Soviet rapprochement and calculated serve Soviet objectives. Yugoslav position in US, in West and indeed in non-aligned world would suffer. And the greatest danger of all is that Yugoslav retaliatory policy can only serve to set in motion a series of actions and counteractions from which retreat may be difficult or impossible.

US has been sympathetic Yugoslavia's problems and has worked actively in behalf of Yugoslavia both on bilateral basis and in various multilateral forums. US for example took lead in organizing financial support package in connection Yugo exchange reform. US was instrumental in facilitating Yugo presence in OECD and has urged EEC sit down with Yugoslavs to discuss problems in concrete terms. EEC has agreed do so. US has argued with FedRep on behalf Yugoslavia and not without results. We have taken these measures despite our awareness not only of Yugoslav complaints against Germany but also of German dissatisfaction certain Yugoslav policies. We are prepared to continue our efforts to facilitate and improve Yugoslavia's relations with FedRep as well as with OECD and EEC. Yugoslavia cannot suppose however that the US could continue its efforts in the face of a new Yugoslav policy which certain to be interpreted in West not so much the result of aggrieved Yugoslav feelings toward Germany but directed against interests West.

It is our hope therefore that in common interests Yugoslavia and the US and in interest constructive Yugo relations with West generally that Yugos will reconsider carefully course of action. US for its part desires make further effort with FedRep and would appreciate being informed if Yugoslav decision is such as to make this appropriate.

Rusk

154. Telegram From Embassy in Yugoslavia to the Department of State

// Source: Department of State, Central Files, POL Yugo. Confidential. Repeated to Moscow, Hong Kong, and Zagreb.

Belgrade, March 15, 1963, 9 p.m.

1244. Completed March 14 visit to Croatia and Slovenia during which had informal discussion not only with number of prominent cultural figures but also with President Bakaric of Croatia, Vice President Vilfan of Slovenia, and at Brioni, political secretary to President Tito Crnobrnja, and finally Tito himself. Will submit my much more detailed accounts discussions with political leaders./1/ Following are certain general impressions gathered from all these encounters:

/1/The more detailed accounts have not been found.

1. Yugo ComParty is seriously wracked at this moment by internal differences primarily over problem of decentralization. While most acute aspect of this problem is question as to whether new investment should be directed to highly developed or to underdeveloped republics, it also raises basic political issue of dictatorial centralization versus liberal decentralization in political sense, and thus produces growing bitterness and divergence between hard-line Communists on one side and liberal Marxists on other. This conflict is probably intensified by everyone's awareness of importance of personnel problems about to be raised by entry into effect of new constitution, with attendant implications for entire question of eventual succession to Tito's position of leadership.

2. In close connection with internal party struggle, partly as cause and partly as result, there has been serious aggravation of nationality problem, particularly in Slovenia, where tendencies toward economic centralization are especially strongly feared and where local national feeling is now running higher than at any point since World War II. So acute is this situation that Slovene ComParty finds itself faced which choice between identifying with Slovene national feeling or losing most of such moral influence as it still possesses.

3. In these internal differences, Tito's position has been ambivalent. He does not seem to be leader of hard-line centralized element. In some ways, he favors old-fashioned Communist approaches, but on vital issue of investment policy, his mind appears to be moving towards concept which would give communes and enterprises wide freedom to invest surplus funds in other regions and in other branches activity, thus creating some freedom of movement on investment capital within country. This would, if realized, constitute important shift of Yugo economy in Western direction.

4. Unable to ascertain what connection if any exists between these internal issues and foreign policy, presumably, hard-line element generally more favorable to development relations with USSR, but here, in contrast to internal centralization, lead seems clearly to have been taken by Tito personally. It is noteworthy that in course much discussion of development Yugo economic and social system, nowhere did I find faintest trace of intention to be guided by Soviet patterns or even to take account of Soviet views in charting future course.

5. Tito pleaded strongly with me for understanding of his position vis-a-vis Chinese-Soviet conflict. He stressed tremendous importance in his eyes of assuring that international Communist movement should not come under influence of Chinese, whose position on problem of war and coexistence he described as literally insane. Yugoslavia, he said, could not as socialist country show itself indifferent to outcome such dispute within socialist camp. Hence his support for Khrushchev. In general he professed inability to understand our underestimation of momentous importance Chinese-Russian rift as compared with various points of conflict in our relations with Russia.

6. It is clear from this and other discussions that Yugoslavs believe change in Soviet outlook has been real and significant; that strong anti-Western tone taken by Khrushchev is designed only to protect his flank against Stalinist critics and conceals far-reaching readiness to compose differences with West. Impressions gained by Tito and others in Moscow appear to have changed nothing in their conviction that Khrushchev is faced with a ``Stalinist majority" within Presidium on certain key issues of policy and ideology. This impression has intensified Tito's feeling that he must at all cost vigorously support Khrushchev.

7. Tito declined to be drawn out beyond a point on my question as to how far rapprochement with Russia could be expected to carry. He assured me that Yugoslavia will not enter into any military pacts with anyone. (Whether this would preclude less formal arrangements of military collaboration, is another question. His silence on this point did not reassure me.) He professed himself well aware of dangers implicit for Yugoslavia in any composition of Chinese-Soviet differences. He did not know what would happen in such an event; Yugoslavia would in any case not allow herself ``to be put into circulation like a coin."

8. Tito was fully prepared to agree that certain balance of relations as between East and West was vital necessity for Yugoslavia. He has no intention of sacrificing present good relations with Italy and other Western neighbors to his relations with Russia.

9. On US-Yugoslav relations, it is clear that for Yugoslavs MFN problem is basic. (I think it likely my visit was helpful in stalling off any early reactions of impatience; but clearly this cannot be strung out indefinitely.) In addition to this, Tito has unquestionably been stung personally by anti-Yugoslav outbursts in our public discussion, by what he considers our government's general complacency in face of boycott movements and Yugoslav emigre activities, and by reluctance our government to contemplate high level exchanges of visits. On other hand, he volunteered expression of understanding for President Kennedy's position vis-a-vis public opinion. He knew, he said, that there were things President was not in position to say, and that President could not give guarantees to US public for Yugoslav behavior. He only wished that President would also show understanding of his own problems as a statesman. (He had in mind, I am sure, problem presented for him by Chinese-Soviet conflict.) He reaffirmed his disinclination to see Yugoslavia accept any further aid from US, except possibly dollar loans for industrial development and occasional long-term credit for wheat purchases. Anything else, he said, they felt as humiliating.

10. Tito will never free himself from his ingrained Marxist views, his preoccupation with Communist bloc affairs, and his tendency to tailor his words to Eastern ears with little comprehension or concern for effect in West. As such he will always be problem to us. However, he is determined to maintain Yugoslavia's independence; he seems to appreciate vital importance of preserving some balance in his policy; and he is not by nature unapproachable. If MFN could be straightened out, if numerous self-appointed architects and critics of policy toward Yugoslavia in our country would subside and give appointed authority a chance, and if we could hold out some prospects of Tito's cordial reception as official visitor in US at proper time, I would not despair of influencing him usefully in limited but not wholly unimportant ways. I have impression, however, that behind him there are certain other highly placed figures who are even more hostile to good relations with us and are doubly dangerous because they act anonymously, are hard to identify, and cannot be led into open and responsible discussion on government-to-government level.

Kennan

155. Memorandum From the Assistant Secretary of State for Congressional Relations (Dutton) to the Assistant Secretary of State for European Affairs (Tyler)

//Source: Kennedy Library, National Security Files, Countries Series, Yugoslavia. Secret. Copies were sent to Kaysen and AID.

Washington, April 18, 1963.

I urge that before finally acting on the proposed determination permitting military sales to Yugoslavia under section 620 (f),/1/ that steps should be related more fully and explicitly in our own thinking to the potential effect on the foreign aid legislation now before Congress and to the request of the President for restoration of the MFN clause to Poland and Yugoslavia.

/1/For text of Section 620 (f) of the Foreign Assistance Act of 1961, P.L. 87 - 565, approved August 1, 1962, see 76 Stat. 261.

I recognize that the pending military sale to Yugoslavia is only for spare parts in connection with previous sales to that country, and the precedent is well established in both a legal and political sense. At the same time, the action could trigger serious Congressional repercussions.

The point will almost certainly be made by Congressional critics that if the Administration is not willing to make the necessary finding under the 1962 authorization bill that the extension of foreign aid to Yugoslavia is in our national interest, how can we nevertheless justify the delivery of additional military supplies at this time to the Yugoslavs? The military sale, of course, is not subject to the provision requiring the finding necessary before aid can be extended--but most members of Congress will consider that this fact is an idle legalism, and that if we are not ready to provide the necessary finding to justify ``soft" aid, we can hardly justify, as a matter of policy, further military assistance. As a political matter, it seems to me to be dubious to refuse to take the political heat of making a finding on foreign assistance while being willing to take the much greater heat likely in connection with the military sale.

The mere fact of extending more military hardware for Yugoslavia will be used by opponents of foreign aid as an added excuse to urge that aid of any kind to communist countries be prohibited in the aid bill this year. The attendant stir will also be used to oppose restoration of MFN to Yugoslavia.

I urge that if all possible the pending military sale be delayed until next October after Congress has adjourned.

More fundamentally, I believe that the Administration needs to pull together a more coherent aid policy towards Yugoslavia. We apparently are going to provide military assistance but not make the finding necessary to make ``soft" assistance. I would think that underlying political and economic objectives toward that country would require more consistency and coherence as among these various types of aid. Certainly our critics in Congress will club us over these contributions.

Frederick G. Dutton/2/

/2/Printed from a copy that bears this typed signature.

156. Memorandum of Conversation

//Source: Department of State, Presidential Memoranda of Conversation: Lot 66 D 149. Limited Official Use. Drafted by Barnsdale and approved in the White House on April 23.

Washington, April 18, 1963, 5 p.m.

SUBJECT

Call of Yugoslav Ambassador on the President, April 18, 1963, 5:00 p.m.

PARTICIPANTS

The President

Mr. Richard H. Davis, Deputy Assistant Secretary, Department of State

Mr. William J. Barnsdale, Officer in Charge Yugoslav Affairs, Department of State

Mr. Veljko Micunovic, Yugoslav Ambassador

Dr. Josip Presburger, Counselor, Yugoslav Embassy

Ambassador Micunovic thanked the President for the early appointment. He reported to the President that during his consultation in Belgrade from March 13 to April 14 he had met with President Tito and other leaders of the Yugoslav Government, and had brought with him to Washington a personal message from Tito to the President. The Ambassador pointed out that the Serbo-Croatian text of the letter was the original and that the English translation accompanying it should be considered an unofficial translation.

The President read the message from Tito, thanked the Ambassador and said he would respond to the letter. He expressed his appreciation for Tito's remarks. The President said we are going ahead with our efforts to amend the most-favored-nation legislation [Section 231 of the Trade Expansion Act]/1/ but noted that the Ambassador was aware of the legislative difficulties. Our efforts to amend the legislation offers an opportunity for some members of Congress to be unhelpful. We will know later what our legislative chances are.

/1/All brackets in the source text.

The President also said he was gratified that on the basis of Tito's trip to the Soviet Union the Yugoslav President feels that the Soviet leadership wants peace. The President pointed out that we want peace too. We are moving ahead on these matters. We are working hard on the non-diffusion of atomic weapons, for example, and the situation is more normal in the Caribbean.

The President then asked Ambassador Micunovic for his opinion on the possibilities for a resolution of the Sino-Soviet dispute. How would such a resolution affect Yugoslavia?

The Ambassador replied that it is difficult to see what realistic possibilities there are for a resolution of Sino-Soviet difficulties. Efforts have been made to ease Sino-Soviet tension and some alleviation is possible, but the basic differences will remain. The Ambassador also agreed with the President that it was difficult to see how good relations could exist on all sides of the Sino-Soviet-Yugoslav triangle.

The President asked if Tito would visit Mexico and the Ambassador replied in the affirmative. The Ambassador said invitations had been received also from Brazil, Bolivia, and Chile and that it is expected that Tito will visit all of these countries in the autumn. The Ambassador noted that in the Yugoslav view the visit of the Mexican President was very successful. The Yugoslavs were very pleased.

The President asked the Ambassador for his assessment of current difficulties within the USSR, noting that although Tito had been there, his visit was several months ago. The Ambassador replied by noting that for quite a number of years the Yugoslavs had attempted to improve their relations with the USSR on the basis of the Yugoslav policy of independence and non-alignment. The Ambassador had tried to further these Yugoslav efforts when several years ago he was his country's ambassador in Moscow, but he had not been successful. However, significant changes have taken place in the USSR. There is evolution everywhere, and the evolutionary developments in the Soviet Union made it possible for Tito's recent visit to be successful. But as a result of these changes in the Soviet Union the Sino-Soviet conflict has grown as well. Yugoslavia as a socialist country is vitally interested in these developments and wishes to support progressive evolutionary tendencies everywhere--the Yugoslavs support negotiated settlements on the basis of mutual concessions and peace.

In that respect Chairman Khrushchev's speech of 12 December, delivered in the presence of President Tito, went as far as the Soviets had ever gone before in advocating these progressive evolutionary tendencies. The Ambassador expressed his understanding, therefore, of President Tito's sincere belief that Khrushchev is interested in peace and negotiated settlements. At the moment Khrushchev's words have become ``harder", but his intent remains the same as during Tito's visit.

The President asked the Ambassador for his view on the pressures on Khrushchev from Stalinists and others within the Kremlin.

The Ambassador saw the pressures on Khrushchev as falling into two categories. First, there is Khrushchev's lack of success in achieving significant accomplishments vis-a-vis the West. Second, Communist Chinese positions have been strengthened as a result of the cold war. In the absence of success on either of these fronts the pressure on Khrushchev is great.

There was great hope in Yugoslavia that when Khrushchev accepted the principle of on-site inspection that an agreement between the Soviets and the US would follow. There had been hope also that after the Soviet [rocket] withdrawal from Cuba there would be some lessening of Cuban problems in and outside the US. The Yugoslavs had hoped that some gains for Khrushchev on the second front [vis-a-vis the Chinese] would occur. There had been some disappointment in Yugoslavia that these positive developments had not produced more significant results.

The President concurred that there had been no spectacular agreements. On the other hand we have a situation which is not war, which is less tense, and which is not as dangerous as last fall or during the fall of 1961. The very lack of greater danger is a form of success. Agreements themselves are not always so satisfactory. We have an agreement on Laos but we do not have a satisfactory situation there.

The President assured the Ambassador again that he would respond to Tito, and he expressed a desire to see good relations with Yugoslavia. The President said good relations between the US and Yugoslavia contribute to stability in that area, and he hoped that Yugoslav influence in other areas such as Africa and the Middle East will be in the right direction. The President expressed the hope that our bilateral problems, in particular MFN and sales of military spare parts, will be resolved. He said he appreciated President Tito's letter, and also the courtesies the Yugoslavs have extended to our Ambassador in Belgrade.

Ambassador Micunovic associated himself with the President's hope for a solution to our particular problems, and said that beyond this goal, the Yugoslavs also hoped to build a firm basis for a continued expansion of good relations with the US. He wished to assure the President, in closing the discussion, that Yugoslav policies would remain non-aligned and independent, as stressed in President Tito's letter.

The Ambassador then informed the President that he had been instructed to invite Secretary Rusk to visit Yugoslavia and hoped that it was not inappropriate to so inform the President before he saw the Secretary tomorrow.

The President expressed his confidence that the Secretary of State would be pleased to receive an invitation and a visit would be a good thing.

There follows an unofficial English translation of the letter dated April 7, 1963, from President Tito as provided by Ambassador Micunovic on April 18, 1963, and a copy of the original Serbo-Croatian text.

Attachment/2/

/2/Limited Official Use. The source text is labeled ``Unofficial Translation." The Serbo-Croatian text is not printed.

Letter From President Tito to President Kennedy

Belgrade, April 7, 1963.

DEAR MR. PRESIDENT: I avail myself of the opportunity offered to me by the return of our Ambassador, Mr. Veljko Micunovic, to Washington, in order to address you this message and to set forth my views on certain current aspects of our mutual relations, in the belief that this can be beneficial to future relations between our two countries.

Certain difficulties have arisen in our relations in the past year and have caused concern to the Yugoslav Government. All the more so as the relations between Yugoslavia and the United States were acquiring the character of an even more positive tradition and, within this context, were also providing an encouraging example of successful co-existence and friendly co-operation among countries with different social and political systems. In our view, this positive tradition was built by mutual efforts and in the mutual interest over a number of years and it successfully weathered the periods when the general pattern of international relations was not always the most propitious. We are convinced, for our part, that there exist both a need and conditions for a further successful development of such relations.

This view of ours is based on the principles by which the foreign policy of Yugoslavia is guided. The post-war period and the experiences gained by the peoples and the Government of Yugoslavia during this time have strengthened our belief that the policy best suited to our country is that of co-operation with all States on the basis of independence, equal rights and non-interference in internal affairs and mutual respect. We are convinced that our independent and non-aligned policy has proved to be not only the best suited to our national interests but Yugoslavia has thus also done its utmost to promote general international cooperation, peace and progress in the world. If we glance today at the rather long and arduous road that we have traversed during this period and at the results we have achieved, we have sufficient reason for remaining firmly convinced as to the correctness of such a policy.

Last year's new Trade Act, which deprived Yugoslavia of the most-favoured-nation treatment, existing between our two countries for almost a century, has in our view opened the way, in the United States, to the aforementioned difficulties. This has been also followed by other negative manifestations resulting, in one way or another, in a further narrowing of the framework of mutual co-operation. At certain moments, in the past, uncertainty concerning Yugoslavia's future policy has been expressed by the American side. Here in Yugoslavia, too, a similar feeling of uncertainty has appeared as to the future policy of the United States towards us. My associates and I, departing from the belief that occurrences harmful to the interests of the two countries and contrary to the intentions of both Governments were involved, have endeavoured not to allow matters to be dramatised as often happens under similar circumstances.

I am certain, Mr. President, that it is in the interest of Yugoslavia and, I believe, also in the interest of the United States that the Governments of our countries should do all that is indispensable in order to check this process of weakening and deterioration of our relations, to prevent the further weakening of what has been achieved by our common efforts in the course of the past years. The peoples and the Government of Yugoslavia have appreciated every effort exerted by your Government to that end. I have learnt with particular pleasure the news of the step that you personally undertook recently in the United States Congress with a view to restoring normal terms of trade between Yugoslavia and the United States. We believe that the results of your positive initiative will not only favourably affect further relations between our countries in the field of trade but also that the whole matter has a broader political significance. I feel, as I have already told your Ambassador Mr. George F. Kennan on several occasions, that it is possible to further expand our economic relations on a commercial and business basis and that these relations will be placed, in this way, on more realistic and stable foundations.

In my opinion a great part of difficulties in co-operation among States, especially among those holding different views on major international problems, is also due to insufficient mutual acquaintance and understanding. Thus, for instance, we are under the impression that Yugoslavia's policy concerning some current issues is not always correctly understood in your country and that some people interpret it sometimes as being directed against the United States. I do not wish to exclude that in our country, too, there is sometimes a similar lack of sufficient understanding.

I wish to point out that our views of principle on these and similar questions proceed from the assumption that our relations with individual countries should not develop to the detriment of relations with third countries, as this would directly undermine the foundations on which the general principles of international co-operation should be based. On the contrary, we are convinced that the improvement of our relations with an ever broader circle of countries can only contribute to the strengthening of international understanding and co-operation in general. We feel that the improvement of our relations with the USSR and the majority of socialist countries, which has taken place recently, serves the same end. I can tell you, Mr. President, that I have convinced myself, on the occasion of my last visit to the Soviet Union also, that the Soviet leadership and the Prime Minister N.S. Khrushchev are profoundly interested in the preservation of world peace and that they wish to pursue a policy of negotiations and peaceful co-existence. In our opinion all this deserves special attention, especially at a time when various efforts--which are being exerted in the world with a view to easing international tensions and in which the activities and relations between your and the Soviet Government play such an important role--are, it seems to me, nevertheless producing some initial positive results.

In conclusion, Mr. President, I wish to emphasise our belief that the obstacles which have made their appearance in the relations between our two countries will be overcome by our mutual endeavours and that our relations, placed on a sound and realistic basis, can and will develop to the mutual benefit and to the benefit of international co-operation and world peace.

Wishing you, Mr. President, and the people of the United States all the best, I beg you to accept the assurances of my high consideration.

Josip Broz Tito/3/

/3/Printed from a copy that bears this typed signature.

157. Memorandum From the Executive Secretary of the Department of State (Brubeck) to the President's Special Assistant for National Security Affairs (Bundy)

//Source: Department of State, S/S - NSC Files: Lot 72 D 316, NSAM 212. Secret. Drafted by Katz.

Washington, April 20, 1963.

SUBJECT

Comment on Proposal to Delay Presidential Findings to Permit Sales of Military Spare Parts to Yugoslavia

We have considered the proposal to delay the making of findings under Section 620 (f) and a determination under Section 614 (a) of the Foreign Assistance Act to permit sales of military spare parts to Yugoslavia. If a delay is considered necessary for Congressional reasons, we believe that its impact on our relations with Yugoslavia can be minimized by the following course of action:

1. The President should decide now to make the necessary findings and determination at such time as it will not jeopardize consideration of the MFN amendment in the Congress.

2. In the meantime, so as to minimize any further subsequent delay, the President should authorize the Defense Department to receive additional purchase orders from the Yugoslav Purchasing Mission and to process these orders for execution when the President has made necessary findings and determination.

3. The Yugoslav Ambassador should be called in and informed of the President's decisions above. It should be explained to the Ambassador that the law requires that the findings must be reported promptly to the Congress, and that we wish to defer bringing the issue of military sales before the Congress until we are assured that the MFN amendment is secure./1/

/1/A memorandum from Brubeck to Tyler, April 25, reported: ``Mr. Kaysen has informed me that the President has approved paragraphs 1 and 3 of the memorandum of April 20 on the subject of Presidential findings respecting Yugoslavia. The President does not believe that we should proceed with recommendation 2 until after you have testified on the MFN amendment on May 10." (Ibid.)

William H. Brubeck/2/

/2/Printed from a copy that bears this typed signature. W. Slaten signed for Brubeck.

158. National Security Action Memorandum No. 236

//Source: Department of State, S/S - NSC Files: Lot 72 D 316, NSAM 236. Secret.

Washington, April 29, 1963.

TO

The Secretary of State

The Secretary of Defense

The Administrator, Agency for International Development

The Director, Bureau of the Budget

SUBJECT

Sales of Military Spare Parts to Yugoslavia

On the basis of recommendations of the Departments and Agencies concerned, the President has decided:

1. The Departments of State and Defense will notify appropriate members of Congress concerned with foreign affairs, defense, and appropriations, of the Government's intention to permit the sale of spare parts and supplies to Yugoslavia for servicing equipment of United States origin already on hand.

2. The necessary findings and determinations to permit such sales will be made after such notification.

3. The Department of State, in its discretion, will inform appropriate Yugoslav officials of the action being taken.

McGeorge Bundy

159. Telegram From the Department of State to Secretary of State Rusk, at New Delhi

//Source: Department of State, Presidential Correspondence: Lot 66 D 476. Confidential; Priority; Eyes Only; Verbatim Text. Drafted by Barnsdale and approved by Vedeler. Repeated to Belgrade for Ambassador Kennan as telegram 943. Secretary Rusk was in New Delhi attending the CENTO Ministerial Meeting.

Washington, May 1, 1963, 8:59 p.m.

Tosec 58. There follows verbatim text of signed letter from President to Tito. Original being hand carried by Davis to Belgrade for Secretary delivery to President Tito.

April 30, 1963

Dear Mr. President:

I was very pleased to have your message of April 7 from Ambassador Micunovic./1/

/1/Attachment to Document 156.

I too have been concerned by the difficulties which have arisen over the past year and a half, and particularly by the fact that these problems were sharpened to some extent by a lack of understanding on both sides. It is true that in addition to misunderstandings there have been some real concerns among my countrymen that the legitimate security interests and the deeply peaceful purposes of the United States might not be fully recognized in Yugoslavia. We think that mutual recognition of such interests and purposes is of high importance in our relations.

One thing which has been most helpful in improving the levels of understanding has been the work of the very able representatives of your country here in Washington. We greatly appreciate the efforts you and they have made to remove some of the misunderstandings. For our part, I know that Ambassador Kennan and his staff have consistently and constantly pursued these same goals in Belgrade.

I share your belief that through efforts on both sides, we can and will succeed in removing many of the difficulties that have arisen. It remains my objective to maintain and improve our relations. My recent request to the Congress to amend the Trade Expansion Act of 1962, so that the United States will be able to continue to extend MFN benefits to Yugoslavia, reflects my confidence in our ability to eliminate many of the problems that have arisen and to strengthen the friendship and cooperation between our two countries.

I carefully noted your comment to the effect that the Soviet leadership is profoundly interested in peace and the policy of negotiated understandings. I am sure you are aware that the United States has consistently sought peaceful solutions of international problems through negotiation. However, where the security of the nation and the peace of the world are at stake, it is important that good will and peaceful intentions be reinforced with workable agreements on basic outstanding issues, equitably arrived at.

Let me emphasize again that the goals of this Government in our relations with Yugoslavia remain constant. We want to cooperate in every appropriate way. We respect Yugoslavia's unaligned role and your belief in the importance of maintaining national independence and sovereignty. It is my desire and hope that in our unflagging effort toward international cooperation and the achievement of world peace, we may have the full support of Yugoslavia and that our relations may be maintained on the sound and realistic footing which has generally served our countries well.

Sincerely,

(Signed) John F. Kennedy

Ball

160. Telegram From Secretary of State Rusk to the Department of State

//Source: Department of State, Central Files, ORG 7 S. Confidential; Priority. Repeated to Zagreb. Secretary Rusk visited Yugoslavia May 4 - 5 on his return from a trip to South Asia.

Belgrade, May 5, 1963, 9 a.m.

Secto 44. At 1700 Secretary met Foreign Minister Popovic. Also present were Under Secretary Nikezic, Assistant Secretary Lekic and Director Petric. Meeting lasted one hour and half.

After agreement discuss bilateral and then broader international issues, Secretary began by stating US Government had serious desire steadily improve our relations with Yugoslav Government. While recognizing there are and will continue to be differences in points of view some questions, it was our hope that each side would work toward resolving them. Immediate problem of MFN was before Congress and it was our hope that discussion there would help clarify our relations. Secretary said he could not give any clear assurances at this time what Congress would do but President and he had talked with congressional leaders and there was reason to expect that some who had been unhelpful in past might be silent this year. He pointed out we had not carried out the provision in the Trade Act Law withdrawing MFN and would not as long as Congress has the matter under consideration. Secretary said it would assist us in handling matter on Washington scene if matter of public statements and exchanges between governments could be avoided.

Popovic replied he did not have much comment now; history of matter well known; Yugoslavs regarded it as an important problem not because of economic substance but because it was a political problem which until solved threatens the whole fabric of our relations. He knew it was not an act by US Government and recognized difficulties in correcting matter. Yugoslavs were encouraged by information they had received that difficulties might be less than before, which they attributed to efforts of most authoritative members US Government. Expressed optimism that matter was on way to be solved. Pointed out that Yugoslavs had refrained from too negatively presenting matter before Yugoslav public opinion. They had congressional problem much in mind and would continue to show restraint in hope problem can be solved.

Popovic then raised question of Yugoslav emigre activities in US noting that US had already taken some measure to ameliorate situation. Yugoslavs were not asking for an unreal maximum and recognized that under American law the US restricted as to what could be done. However, Yugoslavs hope that most extreme actions can be discouraged in order that relations not be affected in a negative manner. Solution of this problem could only help both sides.

Secretary commented he aware of incidents in past for which we had expressed regrets. We would continue carefully follow this matter but there was limit to what we can do not only because of constitutional provisions but because US was nation of emigres. Within range of free speech and freedom of press, we will take action to prevent anything harmful to Yugoslav officials or property or which could injure relations between two countries.

Popovic then raised question sales military spare parts. Pointed out there had already been failure to meet certain contractual obligations and this created difficulty for normal function Yugoslav Army. Secretary replied he was familiar with this problem and hoped a solution can be found. Pointed out that this solution for US has two points: the technical legal point under the law of certain findings which the President must make but it was also a political matter as we must consult with congressional leaders and thus it has some political connection with problem MFN. Promised to take up question when he returned Washington.

Discussion then turned to international issue with Secretary remarking that we were trying to reach agreement on one of two points with Soviet Union though we don't see any possibility of a broad detente. Secretary cited outer space, recent message to Khrushchev from Macmillan and President on nuclear test ban, non proliferation and Berlin./1/ With regard to nuclear test ban expressed belief that number of inspections should not be allowed to stand in way of achieving agreement. Until we could obtain agreement on character of inspections it relatively meaningless to discuss number. Believed this could be worked out so that espionage would not come into question. Described dangers of armaments race and thought agreement on ban still in national interest of three countries. Secretary stated we had been disappointed that temperature of Khrushchev's interest in nuclear test ban seemed to have fallen since last December.

/1/Dated April 15; for text, see vol. VI, Document 93.

Popovic noted Yugoslavs were not so well qualified to talk about this question. Said they were not enough acquainted with latest proposal to have definite opinion. Yugoslavs appreciated dangers in sense Secretary spoke about arms race and danger of other nations arming themselves with nuclear weapons. Yugoslavs had impression that Western side insisted too much on inspection and USSR too much on espionage.

They were hopeful two sides could find basis for agreement but had impression both sides seemed to be more rigid than warranted. Yugoslavs unable judge Secretary's estimate Soviets had cooled off on test ban treaty.

After brief general discussion disarmament Secretary brought up question of Cuba pointing out potential dangers as long as Soviet forces present on island. Observed there were two non-negotiable points, i.e., military and political connection of Cuba with Moscow, and illegal intrusion of Cuba into affairs of other LA countries. Reviewed history of Castro movement and commented Castro appeared to have abandoned his original commitments and turned revolution into something else. We did not oppose Castro just for historical reasons but problem related to present security needs. So long as Soviet troops are there Cuba will continue to be a difficult question.

Popovic expressed recognition importance US attached to Cuban question and as unresolved question it constituted threat to peace not only in that region but to world. Yugoslavs considered real social revolution had taken place in Cuba and that the regime there represents basic aspirations of Cuban people. Recognized this viewpoint different from Secretary's. Pointed out that even before Soviet troops or arms were introduced into Cuba differences between US and Cuba were great. Asked if modus vivendi could not be found which might then eventually lead to a solution.

Secretary replied though we did not know too much about attitude and thinking present Cuban regime, we knew that there were those who believed Cuba should have close ties with Soviet Union while others believed that ties should be with Peiping. What US did not find were those who want reconciliation with the other LA countries. Hence the Secretary was not hopeful of a solution particularly in the light of two non-negotiable points he had mentioned.

Ambassador Kennan pointed out US had never made an issue of nationalized properties in Cuba and that it was not question of social revolution but rather a question of Cuban attitude toward the US and toward their responsibilities to other countries in Western hemisphere. Secretary noted 1959 Castro visit to US and our attempt to establish good relations. However, by May 1960 it was evident Castro rejected all overtures and a great many of Castro's old associates in revolutionary movement had abandoned him. Cuba was a highly exposed nerve to the American people and the Yugoslavs should know that last October was a unique moment on two counts, i.e., for the first time US and Soviet forces confronted each other and for the first time their leaders faced the possibility of general nuclear war. Emphasized this could not help but affect all our relationships until problem was solved.

Popovic said Yugos properly appraised dangers in this situation. Noted that US making efforts calm situation which had not been accepted by ``certain circles" in US. Secretary replied it was true President was trying to keep country calm and realistic on these matters but this was not easy on issue which struck so deep in American opinion. Emphasized that Yugoslavs should understand depth of feeling in US on Cuban question.

Discussion ended with the brief description at request of Popovic of Secretary's impressions his visit to Pakistan and India in particular in regard to Kashmir problem.

Rusk

161. Telegram From the Embassy in Yugoslavia to the Department of State

//Source: Department of State, Central Files, POL Yugo. Confidential. Repeated to Hong Kong, Moscow, Paris, Bonn, Cairo, and Zagreb.

Belgrade, May 14, 1963, 5 p.m.

1583. Paris for USRO. We believe that dominant mood of Tito and leading advisors in confrontation with problems of Yugoslavia's international position must today be one of much uncertainty, sensitivity, and indecision. Tito's Moscow visit last December, and reflection it found in his subsequent statements, caused some consternation and alarm within party and population, where it was feared he had been swept by Khrushchev's charm, by deference of Soviet officialdom, and by his own strong desire to influence outcome of bloc differences, into sacrificing relations with unaligned group and with West and thus forfeiting what had become traditional balance of Yugoslavia's position. When, in January and February, Russians showed signs of raising price for continued support of Yugoslavia in face of Chinese opposition, this alarm was not only heightened but came, we suspect, to be shared in some degree by Tito himself. We view obvious Yugoslav eagerness for Rusk and Nasser visits/1/ as evidence primarily of Tito's desire not only to reassure his own followers but actually to give some reassurance both to unaligned group and to West that he had not sacrificed balance of Yugoslavia's position.

/1/Nasser visited Yugoslavia May 12 - 16.

Today, great and disturbing uncertainties are still visible here on eastern horizon. Yugoslavs probably know little more than we do concerning Khrushchev's personal position. They will have noted in recent weeks, and particularly in last few days, evidence that attitude toward Yugoslavia is coming more and more to constitute touchstone of Chinese-Russian differences, with Chinese showing every sign of regarding rejection of Yugoslavia as sine qua non of any reconciliation. Yugoslavs will note with interest and some apprehension that Russians are plainly reluctant to hold Central Committee meeting and to redefine their ideological line before they have talked with Chinese. In all, Yugoslavs are well aware events could easily take a turn which could put them back in position not dissimilar to that which they occupied after 1958 differences. Faced with these uncertainties they are obviously trying to hold all lines open and to reserve to themselves widest possible latitude of choice in reshaping their international position if this becomes necessary.

Question of course presents itself as to how Western circles can exert most useful influence in this highly fluid situation. They cannot hope to change in any brief space of time ideological convictions of Yugoslav leaders or their insistence on clinging to their image of themselves as important contributors to international socialist cause and to ``struggle" of developing nations against colonialist and neo-colonialist pressures. What Western governments can do in these circumstances is to shape their policies in such way as to demonstrate daily to Yugoslav regime and people that Yugoslavia always has option of economically fruitful relationship with West, on terms not dangerous to stability of regime, if it wishes to make reasonable effort in this direction. I must reiterate, at cost of repetition, that unless such prospect of open Western door is maintained, friends of Western orientation, and even those among Yugoslavs who fear closer relationship with East, have no effective arguments.

This means that if there was ever a time when it was folly for Western countries to confront Yugoslavs with attitude of emotional rejection or indifference, and above all with seemingly impenetrable economic restrictions and barriers, concerning which there appears to be no possibility of useful discussion, it is this present moment. So long as and to extent that this situation endures, Western countries can expect, in development of Yugoslav policy, almost any eventuality except those most favorable to Western interests.

I must again emphasize heavy responsibility now being taken upon themselves by those congressional figures who insist on confronting Yugoslavia through this present period not only with MFN denial specifically but with angry and vindictive posture generally. Yugoslavia's problem is a complex one. Outlook and behavior present governmental leaders will never be such as to permit wholly untroubled and satisfactory US-Yugoslav relationship. On contrary, we must expect that so long as present uncertainties endure, Tito will continue to accompany his efforts at reassurance of West and nonaligned with other efforts designed to emphasize to Eastern eyes Yugoslavia's socialist quality and thus to help Khrushchev defend Yugoslav tie against Chinese attacks. This will inevitably continue to place restrictions on conceivable intimacy of Yugoslav relationship with West. Nevertheless, even within these narrow limits there are possibilities of variations in Yugoslav conduct in coming period which are of considerable importance not only to us but to Western security in general, particularly in view of Yugo-slavia's status as a strong and independent military factor in this area. To ignore these possibilities, or to play fast and loose with them, and thus to leave to the Russians exclusive privilege of trying to influence and manipulate them (and this is implication of certain of attitudes we have recently encountered in congressional and public opinion) strikes me as clearly indefensible, particularly from standpoint of advancement of Western interests in face of international communism. I would deeply hope that one more effort could be made to explain, where explanation is due, need for sober and considered approach to Yugoslav problem coupled with greatest possible flexibility of action for executive branch in handling relevant problems, and that as consequence these explanations something more encouraging than anything yet visible could be caused to appear for Yugoslavs on Western segment of their complex horizon.

Kennan

162. Memorandum of Conversation

//Source: Department of State, Presidential Memoranda of Conversation: Lot 66 D 149. Secret. Drafted by Tyler and approved by the White House on October 22 and by M on October 25. The meeting was held at the White House. The source text is labeled ``Part 5 of 5"; four separate memoranda of conversation dealing with the Algeria-Morocco conflict, Yemen, Cuba, and aid to underdeveloped nations are ibid.

Washington, October 17, 1963, 4 p.m.

SUBJECT

US-Yugoslav Relations

PARTICIPANTS

United States

The President

Governor Harriman

Mr. Tyler

Mr. N. Andrews

Yugoslavia

President Tito

Mr. Todorovic, Vice President of the Federal Assembly

Mr. Popovic, Foreign Minister

Ambassador Micunovic

Dr. Presburger, Counselor

Turning to bilateral matters, Tito referred to the long talks he had held with Ambassador Kennan, to whom he had explained extensively everything relating to Yugoslavia's policies./1/ Tito said he wanted to tell the President that the basis of Yugoslavia's policy was to seek cooperation with others on the basis of no discrimination on either side. Tito referred to ``even Stephen cooperation." He said Yugoslavia wanted to increase her economic exchanges and to abandon old forms of economic relations such as those based on aid from other countries. He said Yugoslavia was growing industrially and agriculturally. In a few years' time Yugoslavia would be able to satisfy all her needs. She was already doing so with regard to corn. Soon she would be able to switch from extensive to intensive agriculture. This year Yugoslavia would have one million tons more wheat than she had last year (4.4 million tons instead of 3.4 million tons). Corn had not done quite as well this year. He said that Yugoslavia wanted to trade as much as possible with the United States on a basis of nondiscrimination. There should be a new basis of relations. Yugoslavia was not asking for anything. He said that the United States had given Yugoslavia a great deal when she needed it. Now she wanted to stand on her own feet. He had explained all this to the Soviet Union which also saw it this way. He repeated that Yugoslavia was not asking for anything. He said that the Most Favored Nation clause amendment in US legislation posed difficulties.

/1/Kennan had resigned his post and left Belgrade on July 27.

The President outlined the United States Government position against the MFN amendment. He said that the Trade Expansion Act was a very important measure, so it had to be signed although it included that particular amendment. The President hoped that perhaps in the next two weeks the Senate would restore MFN treatment to Presidential discretion. It was a sensitive matter because every member of Congress wanted to avoid being called pro-Communist. He said it was hard for Congressmen to distinguish among the Soviet Union, Communist China, Poland, Yugoslavia, and Albania. The President said he hoped that things would turn out all right./2/

/2/Congress was then considering legislation restoring MFN status to Yugoslavia. The legislation passed and was signed into law as Section 402 of P.L. 88 - 205 on December 16.

Tito said Yugoslavia was having difficulties with the Common Market, and would like to work something out. There was great interest in finding some way of improving commercial relations with Western Europe.

The President said he would like to clarify the United States position on certain other matters. There had been very difficult moments with the Soviet Union over Cuba last fall. This had been almost a disaster for the United States. The memory of those events had rendered passage of the Test Ban Treaty difficult, and had reduced the prospects of making progress or having any faith in the Soviet Union. He said that every effort Yugoslavia made to show that she wanted to live in peace with the United States, and to maintain her own independence, the easier it would be for the United States to cooperate with Yugoslavia. Tito said that the wheat sales to the Soviet Union showed that discrimination can be surmounted and gotten rid of. He said that economic exchanges were one of the most important factors for the promotion of political agreements. The elimination of discrimination made the solution of political issues much easier. He said he was glad to have had the chance to present some of his views to the President, and hoped that the President realized that he believed that US-Yugoslav relations could evolve positively. The President said that the experience of last fall with regard to Cuba had made us somewhat cautious "before we embrace the bear."

The President said he was interested in Tito's statement that he has confidence in the peaceful objectives of the Soviet Union. Tito said he was confident that he was not wrong. He said he knew the whole situation. He had known it several years ago, two years ago, and today. Small steps should be taken and we could thus move forward. There had already been the UN resolution on prohibition of putting nuclear weapons in outer space. It also would be useful to make progress on disarmament. He had always been in favor of a gradual approach. With progress in these fields, tremendous resources could be made available for aid to the less developed countries.

The President asked Tito what he thought of the political evolution with regard to Eastern Europe, and whether there was less of an iron grip on these countries. Tito said he thought that agreements with the Soviet Union would help this process. The Eastern European countries did think more of economic and less of political matters. He believed that the great question today was the polarization between those who want peace and those who want to continue the cold war. We are dealing today with criteria which are different from those of the past: today the question is not who is in the bloc and who isn't, but rather who is for peace and who is against peace. More and more countries are interested in nonalignment.

President Tito asked the President what he thought about Yugoslavia and the possibilities of better relations between us. He personally felt that there were great possibilities, and that we should have greater confidence in each other. The President agreed that relations had been improving. The low point had been reached at the time of the conference of nonaligned countries in 1961. Now relations had improved, and the US Congressmen who had recently attended the Interparliamentary Union Conference in Belgrade/3/ had been able to see things for themselves and had received favorable impressions. He said he thought there had been a steady climb since the low point of September 1961. He said that the reception for Tito in the United States today was better than it would have been two years ago. It was important to take into account US history and experience. The President said he wanted relations between our two countries to improve.

/3/September 12 - 20.

President Tito expressed his great thanks to the United States Government for the aid which it had given to Skopje following the earthquake disaster there./4/ The President said that we wanted to do something more with regard to housing. He said we had some prefabricated housing units stocked in France, capable of housing up to 10,000 people, and we would be glad to make these available if this would be helpful. The President said he did not know how much time it would take to get them down to Yugoslavia but thought this could be within about a month or so. Tito expressed his warm thanks for the President's offer, which he accepted. He stressed the great need for housing in Skopje and said that housing for 120,000 inhabitants was needed before December and that ultimately some 200,000 units of housing would be required.

/4/July 26.

The President said he was glad to have been able to repay some of Yugoslavia's hospitality to members of his family, to various government officials and to Congressmen. He hoped that more tourists would go to Yugoslavia. He told Tito that he might get a few pickets on his way around the United States but he wanted him to understand that the President himself gets picketed and that Governor Harriman is also used to this. Tito said he hoped the President would one day visit Yugoslavia where he would be warmly welcomed. The President said, ``Thank you very much."

Mr. Harriman recalled that when he had visited him in 1951,/5/ Tito was gravely concerned that Stalin would unleash an attack on Yugoslavia, and he wanted Tito to know how gratified we were to see a change in his relations with Khrushchev. He said that President Kennedy had said last June that things would be much easier if each country were left to settle its own affairs by itself. He hoped that Tito would use his influence with Khrushchev in this direction. Tito said that things have changed very much since the time when Stalin had said that he wanted to make Yugoslavia one of the Soviet Socialist Republics, and that Yugoslavia firmly intended to maintain her independence.

/5/See Foreign Relations, 1951, vol. IV, Part 2, pp. 1842 - 1843.

The President asked Tito how much of an influence he thought Yugoslavia's policy had had on other countries in Eastern Europe to follow a more independent course, e.g., Bulgaria and Poland. Tito said he thought Yugoslavia's influence had been quite considerable. He said that in spite of difficulties, Eastern Europe had prospered economically. The Yugoslav people were proud and courageous people and he wanted the President to know that they had great sympathy for the people of the United States.

The meeting then broke up at about 5 o'clock.

163. National Security Action Memorandum No. 267

//Source: Department of State, S/S - NSC Files: Lot 72 D 316, NSAM 267. No classification marking. A copy was sent to the Secretary of State and Director of the Bureau of the Budget.

Washington, October 18, 1963.

TO

The Secretary of Defense

The Administrator, Agency for International Development

SUBJECT

Disaster Assistance for Skopje

In view of the continuing emergency need of the displaced persons of Skopje, Yugoslavia, for temporary housing to aid them in recovering from the earthquake of July 26, 1963, the President wishes the Secretary of Defense to take such action as is necessary, using military resources as appropriate, to accomplish the shipment to and erection in Skopje or its environs of approximately 250 Butler-type buildings or similar structures to house persons temporarily.

The President also desires the Administrator of the Agency for International Development to explore all possible means to permit eventual reimbursement to the Department of Defense for expenses incurred in carrying out this undertaking.

McGeorge Bundy


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