Foreign Relations of the United States, 1950, Central and Eastern Europe; The Soviet Union, Volume IV

868.10/4–350: Telegram

The Ambassador in Yugoslavia (Allen) to the Secretary of State

confidential

Belgrade, April 3, 1950—11 a. m.

427. Embtel 426, April 3.¹ Rogers, FBPC had two weeks friendly and useful negotiations re pre-war Yugoslav dollar bonds. While Milentije Popovic, Minister Foreign Trade and Acting Minister Finance, and other Yugoslav officials assured me at farewell luncheon my residence that two parties were not far apart, talks ended without Yugoslavs withdrawing insistence on reduction of principal. I took no part in negotiations but Fowler² attended conversations as observer.

Rogers performed in outstandingly able manner in extremely difficult situation. No Marxist state has ever made settlement with FBPC. Bonds were issued by what present Yugoslav Government considered Monarcho-Fascist regime and Cominform has alleged that negotiations are proof Yugoslavia has become capitalist tool. However, Rogers principal argument for settlement has been Yugoslav need to re-establish credit, but Yugoslavs feel they are being asked to recognize debt amounting to about $50 million including funding of portion of arrears of interest in order to obtain $25 million loan from IBRD.³

In addition, Rogers himself could have expected hostile reception which he might, however erroneously, be considered to represent Wall Street. Actually, he was treated with great courtesy, entertained well, and as guest of Yugoslav Government was unable even pay hotel bill. His deep knowledge of the subject and frank but friendly manner made most favorable impression on all Yugoslav officials he met. Although in a sense he left empty handed, I believe his visit was very much worthwhile and should greatly facilitate acceptable settlement.

Allen

1. Not printed. It reported that James Grafton Rogers, President of the Foreign Bondholders Protective Council, Inc., had departed from Belgrade following the adjournment of discussions with Yugoslav officials. Regarding the antecedents and nature of those discussions, see the editorial note, supra.
2. William A. Fowler, First Secretary of Embassy in Yugoslavia.
3. In his telegram 542, April 24, from Belgrade, not printed, Ambassador Allen reported that FBPC President Rogers had several times explained to Yugoslav officials the position of officers of the International Bank for Reconstruction and Development that a satisfactory settlement of Yugoslavia’s prewar dollar bonded indebtedness was a prerequisite to a Bank loan to Yugoslavia (868.10/4–2450).