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United States Department of State / Foreign relations of the United States, 1948. Eastern Europe; The Soviet Union
(1948)

Yugoslavia,   pp. 1054-1118 PDF (25.0 MB)


Page 1058


1058         FOREIGN RELATIONS, 1948, VOLUME IV
them to peripheral risks or contribute to centrifugal forces which
maajor political or military changes might.set in motion.
  Sent Department 9, repeated Moscow 4, London 5, Paris 4.
                                                         CANNON
840.51 FC 60H/1-248
Memroranduim by the Chief of the Division of Southern European
   Affairs (Barbour) to the Under Secretary of State (Lovett)1
CONFIDENTIAL                      [WASHINGTON,] January 7, 1948.
                          THE PROBLEM
  To review the US position in regard to the US-Yugoslav negotia-
tions concerning US claims against Yugoslavia and blocked Yugoslav
assets in the US, to formulate a reply to the Yugoslav Ambassador's
note of January 2, 1948,2 and to recommend the position the Depart-
ment should take with a view to the expeditious satisfactory con-
clusion of these negotiations. (Reference: Policy Planning Staff
Paper No. 16, dated November 17,1947).3
                           BACKGROUND
1. Yugoslav Blocked Assets in the US
  Yugoslav assets in the US blocked under Executive Order No. 8389
of April 10, 1940, as amended, now consist of
  a) Yugoslav funds deposited in the Federal Reserve Bank of New
York to the account of the Yugoslav Government amounting to ap-
proximately 47 million dollars (46.8 million in gold),
  b) Yugoslav private assets on deposit in various financial institu-
tions, trusts, etc. in an amount unknown but estimated at roughly
$13,800,000 in 1941.
   As regards Yugoslav Government funds, at the beginning-of April
 1941 the Yugoslav National Bank had an account in the Federal Re-
 serve Bank of New York. When the German invasion of Yugoslavia
 began, the Department, in agreement with the Yugoslav Minister in
 Washington, on April 25, 1941, took steps under Section 25B of the
 Federal Reserve Act, as amended, copy of which is attached, to au-
 thorize the Yugoslav Minister to take possession of the funds in that
 account and to transfer such funds to an account in the name of the
 Yugoslav Government-in-exile at the same Federal Reserve Bank.
 'This memorandum was concurred in by the Office of European Affairs, the
 Office of Financial and Developmental Policy, and Office of the Legal Adviser.
 2 For the text of the Yugoslav Ambassador's note of January 2, 1948, see
the
 Department of State Bulletin, January 25, 1948, p. 118.
   For the text of the conclusions contained in Policy Planning Staff Paper
No.
 16, see Foreign Relation8, 1947, vol. iv, p. 854, footnote 5.


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