Foreign Relations of the United States, 1952–1954, Eastern Europe; Soviet Union; Eastern Mediterranean, Volume VIII

750G.00/12–2253

No. 155
The Counselor of Embassy in Yugoslavia (Wallner) to Julius C. Holmes of the Bureau of European Affairs

top secret
official–informal

Belgrade, December 22, 1953.

Dear Julius: I had it in mind to write you a little note of welcome and condolence upon learning of your involvement in the Trieste issue but now want to give you our views on a matter of substance.

In our telegram 805 of December 21,¹ we suggested that in connection with Phase Three of your proposal to the British Foreign Office December 18,² the background of Homer Byington’s conversations with de Castro and de Gasperi last April³ and the approach which grew out of them and which I made to the Yugoslav Government on May 7,⁴ be made known to the British Government. As a matter of fact Jimmie⁵ and I were quite unhappy about Phase Three, but in view of the fact that it might never develop, we decided to give you our views in the form of a letter. I was elected to write it because I did the job in May, but it has been reviewed and approved by Jimmie.

Working only on the basis of the cable received by the British Embassy here, a copy of which is attached,⁶ we see disadvantages both of form and of substance to putting forward Phase Three to the Yugoslavs.

As for form, the idea of a conference embracing only the occupying powers of the Free Territory of Trieste may have some attraction for the Yugoslavs. My own guess is that in the absence of Italy it will not, because they consider and loudly proclaim that the Trieste issue is one which must be worked out in the framework of the permanent relationships of Italy and Yugoslavia as neighbors and future military partners. They are anxious to get to grips with Italy at the conference table and feel they have a well-documented case to prove that the British and ourselves, in each attempt to reach a Trieste settlement, take as a point of departure an Italian proposal, and, for a number of historical, ideological and diplomatic reasons, will, in a showdown, always support their Italian NATO partners against communist Yugoslavia. In other words, they consider us biased intermediaries. But, assuming that willingly or unwillingly, they would agree to Three Power talks, we here wonder whether it would not be actually harmful to our relations with both Italy and Yugoslavia to hold them. As far as our relations with Yugoslavia are concerned, we would in such a conference place ourselves in the position of representing and identifying ourselves even further in the Yugoslav mind with Italian interests and aspirations. Even if we felt that we could make concessions to the Yugoslav point of view without consulting the Italian Government (something we have never done before) the Yugoslavs would never believe that after every session we weren’t on the telephone to the Palazzo Chigi. The Yugoslavs are convinced that we are so deeply committed to the maintenance of a center government in Italy that we have placed ourselves at the mercy, successively, of de Gasperi and Pella, who have had only to point to a coming election or risky parliamentary debate to cause us to push for a Trieste settlement on Italian terms and with Italian domestic political problems foremost in our minds. I can think of no better way of reinvigorating these Yugoslav preconceptions than by putting ourselves in the position of sponsors of Italian claims at a conference. I imagine that some analogous arguments re our relations with Italy could be effectively developed by the Embassy in Rome, but I will not stray off the reservation.

Now, as to substance. As I indicated at the time, but as has become increasingly evident with the passage of months, the Yugoslav Government regards our May 7⁷ approach as one of the baldest pieces of pro-Italian partiality ever seriously proposed by a third power. It really frightened them. Within ten days, Tito, in his speech at Slavonski Brod, initiated that progressive hardening of the Yugoslav position which culminated with his speech at Okroglica in September.⁸ Their rejection was about as flat and categoric as it is possible for a rejection to be, and their Aide-Mémoire of May 12, whose text you will find in my telegram No. 1553,⁹ a document well worth re-reading. Psychologically and diplomatically with Yugoslav officials. May 7 is an important and distasteful date. The proposals themselves can only with difficulty be disassociated with an approach which convinced them of the partiality of the United States Government. Let us however examine the substance alone.

The Phase Three proposals, are identical with those, as I remember them, which Homer Byington tried to sell to the Italians in April. The original Byington line stopped at Pirano and was dropped south beyond Umago at de Gasperi’s insistence. While I was sure that the May 7 proposals would be turned down, I thought at the time that we would have had a fair chance of selling in May what is now Phase Three. Now I am not so sure that we could have done it even then. Developments since May indicate that its revival, even in a modified territorial form, would never get off the ground.

As it has developed since May, the Yugoslav position can roughly be summarized as follows: a partition on ethnic grounds alone would give Yugoslavia the area in Zone A between the city of Trieste and Montefalcone, thus cutting the city, which the Yugoslavs have already conceded should be returned to the Italians, from the rest of Italy. If, however, the Yugoslavs are to give up their ethnic claims to this strip of coastline in Zone A on practical grounds, they see no reason for also giving up in Zone B the predominantly Italian towns of Capodistria, Isola and Pirano on ethnic grounds. And they hold these towns as they hold all of Zone B. They say that they will not give an inch of Zone B, but are probably prepared and expect to sell the three towns dearly. They say they would sell them against the coastal strip between Trieste and Montefalcone, i.e., on an ethnic basis, but they concede that this is “impractical”. Therefore, they have in the past suggested selling them for economic concessions in Zone A, and this in their minds means a corridor into and facilities in the Bay of Zaule. We have taken the position that such a corridor would make no sense, but the Yugoslavs think they got somewhere in their direct secret negotiations on this basis with the Italians at the end of May, and Tito has it very much in mind personally, since he mentioned it to us, along with much of the argumentation, as recently as October 18 (my telegram 512¹⁰). In order to get around the corridor idea, we wish to go back to the idea of a 99-year lease of a small area in the Port of Trieste proper. I think the record of my talks with the Yugoslavs last May and their Aide-Mémoire of May 12 shows pretty clearly that no spark was ignited by the idea of a 99-year lease in the Port. In spite of my best efforts, I could not get them even to discuss it in practical terms. They dismissed it out of hand. They didn’t even bother to point out that the single-track railway connection was terribly steep, that the pier in the suggested area was not built and that an over-pass would have to be constructed over the main railway tracks into the concession. There was simply no sex appeal in the offer as a counterpart to their giving up a vast area of Zone B. Admittedly the area was large, but even if we reduce it to the three coastal towns, would the leased port area have any more appeal than before? I don’t think so. If I were a Yugoslav, I would not trade sovereignty over real estate for a leased railway line and a leased berthing area. I would trade sovereignty for sovereignty. In fact, I am not sure that a leased port area, which has no political sex appeal to the Yugoslavs, would be as economically advantageous to them as an international agreement making the Port facilities of Trieste available on a favorable basis to the neighboring countries—and this has practically been promised them anyway. They regard the 99-year lease as a transparent Italian scheme for getting something for nothing.

So you can see that for a whole series of psychological and practical reasons, both of form and substance, we think Phase Three is a poor departure for a conference. But, there is one more point I would like to make. When we go into a conference, we must be extremely flexible. We must also have a series of cards to play, since it is more important that the conference should be successful than that one solution or another should emerge. I think it would be a mistake to pin our hopes on obtaining the acceptance of one single plan, and I know it would be fatal to select, as that plan, one that had already been tried out on the Yugoslavs and rejected so flatly.

Excuse this long-winded letter, but, as you have discovered, it is hard to be concise on this subject.

With best wishes,

Woodie

1. In telegram 805, Riddleberger pointed out that phase three of the plan presented to the British on Dec. 18 bore a close resemblance to the plan Byington had discussed with Italian officials in April 1953 and which developed into the approach Wallner had made to the Yugoslav Government on May 7. Riddleberger asked that he be allowed to disclose fully the nature of the May 7 approach to the British Ambassador in Belgrade. (750G.00/12–2153)
2. See telegram 2696, supra.
3. Memoranda of conversations between Byington and De Castro on Apr. 10 and between Byington and De Gasperi on Apr. 13 are in files 750G.00/4–1053 and 750G.00/4–1353, respectively.
4. Reported in telegram 1531 from Belgrade, May 7. (750G.00/5–753)
5. James W. Riddleberger.
6. Not printed; the British Foreign Office telegram, Dec. 19, was a two-page description of the meeting Holmes had with British officials on Dec. 18 and a brief statement of the British Government’s reaction to the proposed plan.
7. In the margin of the source text at this point is a handwritten notation, apparently by William E. Knight, which reads, “This was not the HMB [Homer M. Byington] plan. It included Umago.”
8. The Okroglica speech on Sept. 6 is summarized in Document 105.
9. Not printed. (750G.00/5–1253)
10. Not printed. (750G.00/10–1853)