S/S–NSC Files: Lot 63 D 351: NSC 18 Series
Memorandum by the Acting Secretary of State to the Executive Secretary of the National Security Council (Lay)
Subject: Second Progress Report on the Implementation of NSC 18/4, “United States Policy Toward the Conflict Between the USSR and Yugoslavia.”1
NSC 18/4 was approved as Governmental policy on November 18, 1949. It is requested that this Progress Report, dated May 8, 1950, be circulated to the members of the Council for their information.
The established U.S. policy of limited economic support of Yugoslavia, which helps that country resist Soviet pressures, has been maintained. In addition to continuing its relaxation of export licensing controls for Yugoslavia, the United States has taken the following measures: (1) Supported a pending multiproject credit from the International Bank to total $25 million and to be allocated in dollars, as well as the currencies of several Western European states; (2) Endeavored to persuade the Belgian Government to postpone certain payments becoming due from Yugoslavia; (3) Continued efforts to increase Yugoslavia’s dollar earnings by ECA off-shore procurement in Yugoslavia; (4) Helped to assure the signature of the important German-Yugoslav trade and credit agreement on April 18, 1950;2 and (5) accorded a second Exim Bank credit of $20 million, signed on April 20, 1950, designed to meet a pressing Yugoslav need for emergency credits to cover the dollar gap in its balance of payments, which would permit it to import needed raw materials in 1950.3
NSC 18/4 envisages the possibility of the shipment of arms to Yugoslavia in certain contingencies. The Yugoslav Government has begun to purchase some military supplies abroad, but has not yet made a specific request of the United States for assistance in this field. Further implementation of U.S. policy with respect to reimburseable assistance will depend in large measure on specific Yugoslav requests and on continued discussions now in progress with other Western nations.
The studies requested under paragraph 27a of NSC 18/4 have been completed and estimates of Yugoslav requirements for military supplies are available. The Joint Chiefs of Staff have approved the estimates of Yugoslav, Soviet and Satellite armed strength which could be mobilized under the various contingencies outlined in the NSC [Page 1419] document. They have also approved a study giving present U.S. estimates of Yugoslav military supplies on hand and future requirements.
A study made by the Defense and State Departments on the extent and manner by which U.S. supplies might be made available at an appropriate time has been completed and is expected to be formalized and distributed shortly.4
A study has been virtually completed under the auspices of the Foreign Military Assistance Correlation Committee (in consultation with the Bureau of the Budget) of methods to provide military assistance to Yugoslavia on an emergency basis, since such assistance is not provided for in existing legislation. This study has been obliged to take into account not only Yugoslav conditions but those of other countries throughout the world not covered by existing legislation.5
The Department of State at the turn of the year informed the British, Canadian and French Governments of the essential conclusions of NSC 18/4. The French Government replied by indicating its general concurrence with those conclusions.6 With respect to military aid, the French Government stressed its view that light military equipment might be made available, but only when Yugoslav intentions are made clear and if the action does not reduce the defensive capabilities of the Atlantic Treaty Powers. The UK reply, just received, is in substantial accord with U.S. objectives.7 It further suggests that, in the event of a request for arms, a secret US and/or UK military mission be agreed to by Yugoslavia to check upon its requirements. The British Government states also that it would be difficult for such supplies to be made available in the next few years from its existing stocks of planned production.
The replies of the UK and France are now being studied. When the U.S. position is further clarified in the light of those replies, it is expected that the United States will ask the UK and France to consult in Washington, when required, on the political and military technical level. This would be done to iron out any differences and to keep abreast of changing conditions, so that, if and when a decision is made to provide military supplies to Yugoslavia, appropriate action may be taken by the three Powers with the minimum of delay.
In the field of propaganda and public information, the policies outlined in NSC 18/4, in so far as they are at present applicable, are being supported by the Voice of America and related activities under a directive prepared by the Department of State.
[Page 1420]At present the United States has no firm evidence indicating the USSR intends to embark on aggressive moves, either direct attack or guerrilla operations, against Yugoslavia. Hence, some of the conclusions of NSC 18/4, which are based on future contingencies which have not yet come to pass, are not discussed in this Progress Report.
- For text of NSC 18/4, November 17, 1949, see p. 1341. For the first progress report on the implementation of NSC 18/4, see Deputy Under Secretary of State Rusk’s memorandum of January 31 to Executive Secretary Lay, p. 1360.↩
- Regarding the American attitude with respect to the conclusion of the Yugoslav-Federal trade agreement, see footnote 3, p. 1395.↩
- Regarding the Export-Import Bank credit to Yugoslavia, approved March 1, see telegram 142, March 1, to Belgrade, p. 1378.↩
- None of the studies referred to in this paragraph is printed.↩
- The reference here is to Foreign Military Assistance Correlation Committee document D–40, May 25, 1950, not printed.↩
- See telegram 579, February 6, from Paris, p. 1363.↩
- See the memorandum of conversation by Campbell, May 2, p. 1410, and telegram 2074, May 4, to London, p. 1412.↩