Editorial Note
During a conversation with officials of the Office of Eastern European Affairs on March 6, Lord Earl Jellicoe, First Secretary of the British Embassy, suggested that representatives of the United States, the United Kingdom, and the International Bank for Reconstruction and Development (IBRD) hold a series of meetings in London beginning the week after Easter to discuss thoroughly the over-all Yugoslav economic situation, particularly Yugoslavia’s current economic deficit. The main problem which the British wanted to discuss was whether an attempt should be made to provide longer term credits to Yugoslavia in order to put its economy on a [Page 1744] regularly functioning basis and thereby eliminate the need for continued hand-to-mouth assistance. Lord Jellicoe stated that the British wanted to focus on the economic aspects of the problem without getting into the problems of military assistance at this point. (868.00/3–651) Two days later this recommendation was informally repeated to Embassy officials by members of the British Foreign Office and was reported to the Department of State in telegram 4811 from London, June 8. (868.00/3–851) The Department approved of the British proposal for London meetings but stated that it preferred a bilateral discussion without participation by representatives of the IBRD until agreement was reached on a United States–United Kingdom position. As stated in telegram 4213 to London, March 16, the Department agreed that official conversations should begin on April 9 concerning both long-range and short-range aspects of the Yugoslav economy, and that an advanced party of officials from both countries should meet during the third week of March to begin the preliminary exchange of information. (868.00/3–851)
The first formal meeting took place in London on April 9 between a United States delegation headed by Charles F. Baldwin, Counselor for Economic Affairs of the Embassy in London, and a delegation from the United Kingdom headed by Sir Francis Mudie. According to telegram 5323 from London, April 9, one of the first subjects discussed at this meeting concerned the question of French participation, which the French had requested when they learned these meetings were to take place. (868.00/4–951) In telegram 4596 to London, April 9, the Department of State recommended extending the French a cordial invitation which, in fact, was done after the second meeting on April 10. (868.00/4–951) French Embassy Counselor Lebel began attending the meetings on April 13 and French Finance Ministry official Hirsch-Girin, who served for a time as head of the French delegation, formally inaugurated French participation in the session on April 16.
Regular meetings were held throughout April and May, hindered occasionally by untimely press leaks, with the result that tripartite agreement was reached on such issues as the basic causes of Yugoslavia’s economic difficulties, the general principles for requesting fourth countries to participate in a multinational assistance program, the controls required for assuring Yugoslavia’s cooperation in carrying out any program, and the definition of a general policy of “keeping Tito afloat”. However, according to a memorandum by Higgs of May 8, two major areas of disagreement remained: who, aside from the United States, would furnish grant assistance and in what amounts. (868.00/5–851) After another month of prolonged negotiations, it was finally agreed that the United Kingdom would [Page 1745] contribute 23 percent, the French 12 percent, and the United States 65 percent of the total projected need which was not to exceed $265 million. According to telegram 6478 from London, June 11, this agreement was signed by representatives of the three delegations on June 13. (868.00/6–1151)
None of the voluminous correspondence leading up to the decision to hold official conversations nor any of the numerous telegrams describing the progress of the meetings in London are printed here. For the final report of June 13, see Document 906. Documentation on the meetings in London of the Tripartite Conference on Aid to Yugoslavia is in file 868.00 as well as London Embassy files, lot 59F59.