868.49/2–1651
Memorandum by the Deputy Assistant Secretary of State for European Affairs (Bonbright) to the Secretary of State 1
Subject: Delay in Congressional Portion of Yugoslav Aid Program
Belgrade’s 1091 of February 12, (copy attached, as well as our reply2) reports Yugoslav Government’s concern over delays in shipment of emergency foodstuffs to Yugoslavia. The Ambassador points out that as indigenous stocks are used up, supplies from the US will become increasingly important since indigenous supplies are being allocated on expectation of replacement from the US.
While the stop-gap portion of the aid program to Yugoslavia has been executed on a regular schedule, the Congressional portion of the program is presently behind schedule. The principal reason for this delay is the worldwide shipping shortage.
What is described as the tightest shipping situation since the war has arisen as a result of shipping requirements for Korea, European [Page 1736] coal demands, anticipated tonnage for India, and speculative maneuvers on the part of ship operators. This situation has made it most difficult to book space for the Congressional part of the Yugoslav aid program. The problem has been under intense study by the Maritime Administrator and it is reported that a decision has just been reached to release approximately 40 ships a month from mothballs to ease the shipping shortage. Continuous meetings are being held on the subject and Mr. Harriman’s office is actively following the matter. Meanwhile, it seems fairly clear adequate shipping for the Yugoslav program could be chartered by paying shipping rates above ECA ceilings. ECA and Agriculture have strongly recommended that we not book at the higher rates because of the probable effect of such action on our larger programs for Greece and Austria. Nevertheless, if the shipping situation does not ease substantially in the near future, and if we are not to risk failure of the Congressional program for Yugoslavia, we will be faced with the decision whether to book at the higher rates, regardless of the consequences to the other programs.
Reports from Belgrade do not indicate that the situation has as yet reached a critical stage, but you should be aware of the possibility of trouble ahead.
- Drafted by Higgs.↩
- Neither printed. Telegram 1091 from Belgrade, February 12, reported that the most critical food period lay ahead as Yugoslavia’s domestic food sources were exhausted and that failure to deliver on time would jeopardize the whole purpose for which aid was extended. (868.03/2–1251) The Department of State responded, in telegram 798 to Belgrade, February 13, by pointing out to the Embassy that Yugoslavia was a “relatively small factor” in the “worldwide shipping shortage” in light of the India grain program, the U.S.-European coal movement, and U.S. Army needs in Korea, but the problems would hopefully be resolved shortly. (868.03/2–1251)↩