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

868.10/9–2650: Telegram

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

secret

Belgrade, September 26, 1950—noon.

281. Last night Vlado Popovic, Yugoslav Ambassador to US, gave me considerably different version of conversations with Black from that reported in Embassy’s 278.¹ Popovic declared that Black’s conditions for continuing negotiations were entirely unacceptable and that no further conversations would take place in Washington or anywhere else unless the Bank changed its position. He said Black insisted upon complete relaxation of its entire heavy industrialization program, leaving existing projects where they stand. Equally onerous, he said, was Black’s second demand, that henceforth Yugoslav Government should obtain credits from no source other than IBRD. This pertained not only to dollar credits but also to credits in any currency, mentioning German, Belgian, French, British, etc. According to Popovic, Black ruled out any further loans from ExIm Bank. In return, International Bank would be willing to discuss dollar and other credits up to $200 million during next four years.

Popovic emphasized that no communiqué would be issued regarding Black conversations here. When I referred to Black’s statement at Frankfurt yesterday that Yugoslav Government would send a special representative to Washington to continue discussions with Bank, Popovic replied merely with deprecatory gesture.

Popovic admitted that Black had spoken throughout discussions as representative of international institution and not as American citizen.

Popovic referred to his conversation with Secretary before leaving Washington and said Secretary had expressed opinion that ExIm Bank and IBRD were both appropriate sources for credits and also indicated approval of credits from Germany and other sources.² Popovic said he planned to call on both Secretary and President on his return to Washington to present Yugoslav Government case. Due arrive Washington September 28. He will doubtless investigate possibility of grant for food relief as well as ascertain US Government’s attitude toward Black’s conditions.³

Popovic showed considerable emotion and undoubtedly exaggerated Black’s statements. I do not believe situation is as hopeless as he pictures and I plan to talk with Velebit at early opportunity.⁴

It seems evident that considerable divergence of views has developed within Yugoslav Government between strict Marxists like Popovic and more moderate elements like Velebit. My guess is that Popovic group retains stronger influence in government but emergence of Velebit point of view is of much significance.

Sent Department 281, repeated info London 21, Paris 34.

Allen

1. Supra.
2. See Yost’s memorandum of conversation, September 5, p. 1445.
3. Telegram 223, September 30, to Belgrade, not printed, reported that shortly after his return to Washington, Ambassador Popović had called on Assistant Secretary of State Perkins and gave his version of the discussions with Black. Popović said that the Yugoslav proposals envisaged a total of $400 million in loans over the following 3 years and an additional $100 million in grant aid for food. Popović claimed that Black had set conditions as to the tempo, extent, and character of the Yugoslav industrialization program which would mean the end of the Yugoslav five-year plan. Popović stated that Yugoslavia had not endured such treatment from the Soviet Union and would not accept it from anyone else (868.10/9–2650).
4. In his telegram 288, September 28, from Belgrade, not printed, Ambassador Allen reported that Yugoslav Deputy Foreign Trade Minister Velebit’s version of the discussions with IBRD President Black was very close to Black’s own account reported upon in telegram 278, supra. Velebit stated that Black had not insisted that Yugoslavia obtain all its loans from the IBRD, that differences between Black and Yugoslav officials on the Yugoslav industrialization program largely concerned rapidity of development and the question of level, and that Black had not concerned himself with any matters beyond his proper scope or posed any improper conditions (868.10/9–2850).