768.56/11–1750: Telegram
The Ambassador in Yugoslavia (Allen) to the Secretary of State
511. My French colleague1 called today to discuss question dealt with in meeting between Charpentier, Bonsai2 and Hayter3 (Paris 38 November 14, sent Department 2716 and London 6604). Baudet says negotiations originally concerned commercial credit or loan equivalent to about $25 million which French and Yugoslavs have been discussing for some time its connection with settlement of prewar debt and nationalized properties. French have agreed about ¼ or ⅓ of credit could be used for military supplies, notably cartridge factory and Hispano Suiza motors. Recently, however, Yugoslavs have asked [Page 1502] ⅔’s of credit be made available for military supplies. Baudet is of personal opinion that Yugoslavs are trying introduce major question of Yugoslav military rearmament into French Yugoslav commercial negotiations and eventually to get US military aid indirectly through this means. He regards this as improper and will so advise his government.
I concur in Baudet’s views and suggest US Embassy Paris might advise Charpentier that while US appreciates being kept closely informed of Yugoslav efforts to acquire military supplies and US, UK and French should continue to work in closest cooperation in all such matters; some believe subject of tripartite agreement on military supplies for Yugoslavia is separate question and should not be linked to Yugoslav French commercial negotiations; and that moreover, he might well inform Yugoslavs their efforts to increase percentage of credit to be used for military supplies introduces much larger subject of military rearmament inappropriate for solution through commercial agreement.
As regards French suggestion 3 Ambassadors in Belgrade, or spokesmen for them, might inform Yugoslav Government re tripartite agreement on armaments, my preliminary view is that US should not participate in any action which looks as if we are offering Tito something he has not requested of US.
However, since Tito has assured us several times that he plans call on UN for aid in case of attack, we could tell him in accordance with our obligations to UN, we are now making such plans as we can for prompt response to any UN decision to resist aggression in future. Since our means are by no means unlimited, we must consider priorities. Possibility of Yugoslav appeal to UN must be envisaged, and we ourselves (i.e. US, UK and French or even US alone) have decided to stockpile certain supplies in strategic locations in order not be caught by surprise as in Korea. We have made this decision on our own responsibility, as part of our effort to strengthen UN. However, since most probable use of certain stockpiles would be in Yugoslavia, common sense would require, in our mutual interest, that supplies be useful for Yugoslav needs. This would require quadripartite mechanism and considerably closer staff coordination with Yugoslav Government than exists at present. If Yugoslav Government does not desire participate, we will understand Yugoslav position and proceed by guess work as best we can.
I do not believe Tito would or could refuse on this basis and we would avoid any implication of forcing unrequested military aid on him. Further developments would inevitably ensue.
Sent Department 511, repeated information Paris 68.