868.10/5–251
Memorandum of Conversation, by Edward Rawson of the Office of Eastern European Affairs
Subject: Extension of $5 million Line of Credit to Yugoslavia by the Chase National Bank
| Participants: | Mr. Alfred W. Barth, Vice President, Chase National Bank |
| EE—Mr. Gannett | |
| EE—Mr. Rawson |
Mr. Barth called of his own initiative to mention recent developments between Chase National Bank and the Yugoslav Government, as well as his trip to Yugoslavia in March. Mr. Barth stated that Chase National Bank was prepared to extend the Yugoslav Government a $5 million line of credit for a period of up to 90 days, and, that he had dropped in to inform the Department of this proposal prior to calling at the Yugoslav Embassy later in the day. His proposal is that this line of credit would be secured by the Yugoslav Government’s current account with the Chase National Bank which he asserted handles most of the Yugoslavs’ banking business in this country, and subject to the proviso that all Yugoslav imports into the United States would be channeled through the Chase. Interest would be 4%.
Mr. Barth reminded us that a similar credit had been discussed with the Chase over a couple of years ago and that Chase had facilitated the extension of certain limited credits for cotton exports. He asserted the basic motivation for the Chase’s present proposed loan is political and the desire to match terms offered by the Midland and Westminster Banks in London. Mr. Barth reported that these banks had both extended lines of credit totalling approximately 1-½ million pounds for the purpose of emergency use only, at 5-½% interest. The Yugoslavs had hardly touched these credits, [Page 1789] which indicates that they really consider them a reserve for emergency use only. Mr. Barth’s feeling was that the Chase credit would be looked upon in the same manner.
Mr. Barth continued with the remark that he had obtained considerable data from the Finance Ministry while in Belgrade which he promised to send us. The main new factor which he revealed was that immigrant remittances have dropped from $6 million in 1949 to $2 million in 1950 which reflects the fact that goods are more in demand than dollars in Yugoslavia today. He remarked that the poverty in Yugoslavia is far worse than that he had recently seen in Portugal and Spain and that the need for consumer goods is very great.
Mr. Barth concluded by stating he had learned the Germans have made a settlement with the Swiss regarding their commercial trade debt of World War II. He said the Yugoslavs would be very much interested to learn of this fact, as they have been wondering what use could be made of their $166 million claim against the Germans.
We thanked Mr. Barth for the information he had given us regarding relations of the Chase with Yugoslavia, his report of his recent trip, and his promise to send the additional data he had mentioned.