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Title: An Unconventional Method of Containment – US Foreign Policy towards Communist

Yugoslavia from 1948-1956.


Author: Vassil Zarev
Source: Prandium - The Journal of Historical Studies, Vol. 7, No. 1 (Spring, 2018).
Published by: The Department of Historical Studies, University of Toronto Mississauga
Stable URL: http://jps.library.utoronto.ca/index.php/prandium/article/view/16211/
The Unites States (US) paradoxically, the driving force against anti-communist ideology

prior to 1955, almost allied with a communist government to achieve their goals.1 Despite the

American animosity to communism during the Cold War, the singular case of Yugoslavia

surpassed this ideological standoff and led to a unique scenario of friendly relations. Why? This

essay argues that the United States adapted its foreign policy to include communist Yugoslavia

in its support programs for the purpose of setting an example for, and promoting the separation

of, other USSR satellite states. American foreign policy progressed with the evolving

relationship between the US and Yugoslavia. Initially considered to be a rebel of the Eastern

communist bloc due to their expulsion from the Com-inform (Communist Information Bureau, a

Soviet led organization meant to co-ordinate communist parties in Eastern Europe), Yugoslavia’s

willingness to cooperate with the US led to their increased economic and military support. This

support culminated in an attempt led by the USA to foster allied relations with Yugoslavia

during the Com-inform blockade, a blockade initiated by the Soviet Union to subvert

Yugoslavia’s attempt to remain independent of the Com-inform itself. Finally, these relations

diminished once Yugoslavia began to rebuild its ties with eastern communist countries. This

essay will examine the reasons and goals behind US-Yugoslavian policy shifts, their

effectiveness, and their outcomes.

Prior to its separation from the Eastern bloc, Yugoslavia’s relations with western

countries and particularly America were hostile. Their animosity could be seen from as far back

as 1939, when America rejected Yugoslavia from military loans to help fight in the second

1 Vassil is a fourth-year student specializing in Historical Studies at the University of Toronto Mississauga
with an emphasis on Cold War history. His research focuses on the socio-political relationships between the United
States, the Soviet Union, and eastern communist countries that were influenced by the Communist Information
Bureau. The featured paper was written for a course taught by Matthieu Vallieres. Vassil wants to thank his family
and colleagues for their ongoing support in his academic pursuits, and most importantly the editor of Prandium for
taking time to assist in the paper’s publication.
World War due to their inability to pay off their debts.2 When communist uprisings began in

Yugoslavia, America actively supported the old monarchial regime of Peter II, and upon the

victory of the communists pledged that they would offer no more economic aid until Yugoslavia

fostered more favourable conditions.3 For conditions to be “favourable” the US expected a

complete reversal of the communist government.4

As the animosity worsened during the communization of Yugoslavia, the US congress

even proposed a complete severance of diplomatic relations, and in 1946, an open conflict arose

in which Yugoslavia arrested and shot down several US planes allegedly flying over their

airspace.5 Following Yugoslavia’s quarrels with Russia the idea of developing positive relations

between the two countries began to emerge in the US in the late 1940’s. These ideas were,

however, widely unpopular and did not seem realistic within the existing political situation.6

In June 1948 Yugoslavia’s drive for independence from the remainder of the Soviet

controlled eastern communist countries and subsequently their refusal to co-operate with the

USSR culminated in its expulsion from the Com-inform. When Yugoslavia’s expulsion from the

Com-inform occurred, it came as a shock and was not instantaneously greeted with great

enthusiasm within America. While the US had acknowledged that the fractured relationship

between Yugoslavia’s leader Joseph Tito and the USSR’s leader Joseph Stalin could have been a

beneficial opportunity for dismantling the Eastern bloc, there were still many uncertainties with

regards to how Yugoslavia would react in the future and how the US should deal with the

2 Lorraine M. Lees, Keeping Tito Afloat: The United States, Yugoslavia, and the Cold War, (University
Park: Pennsylvania State University Press, 1997), 2.
3 Memorandum by the Acting Chief of the Division of Southern European Affairs (Reber) to the Secretary

of State,” in Foreign Relations of the United States, 24 November 1945, Europe, Volume V, Part 2, Rogers P.
Churchill et al. eds., (Washington: Government Printing Office, 1969), Document 1043.
4 “President Truman to King Peter II of Yugoslavia,” in Foreign Relations of the United States, 2 July

1945, Europe, Volume V, Churchill, Rogers P. et al. eds., (Washington: Government Printing Office, 1969),
Document 994.
5 Lees, Keeping Tito Afloat, 10-14.
6 Lees, Keeping Tito Afloat, 33-40.
situation.7 The Policy Planning Staff (PPS), who were charged with making the initial policy for

US relations with Yugoslavia, concluded that it was in the USA’s best interest to offer

Yugoslavia economic support as long as Yugoslavia was ready to develop “a loyal and co-

operative attitude” in dealings between the two nations.8 Lees argues that this was a “wait and

see” approach that was meant to be cautious testing of grounds, rather than an all-out attempt to

separate Yugoslavia from the Eastern bloc.9 Yugoslavia’s unwillingness to adopt a more liberal

form of government made this strategy ineffective, as the US government would not support

Yugoslavia without a return of investment; something the Yugoslavs were not ready to discuss.

To Yugoslavia, according to their ambassador any political favours would be shunned and not

negotiated.10

In the meantime, the future of Yugoslavia’s independence was drastically challenged by

the USSR. In 1949, a Stalin led Comin-form blockade of Yugoslavia, had left the country in a

desperate position due to lack of sufficient resources for rebuilding their country and economic

systems following the devastation of World War II.11 Thus, a risk of surrender threatened the

USA’s plans for the Yugoslavs. The Yugoslav reaction was, as expected, to plead with the US

for expedited aid.12 This was met with more enthusiasm than prior engagements by the US, who

were now at risk of losing the rebellious satellite13. In response to questions of aid the PPS

suggested that the US should lessen its control over Yugoslavian exports even though potential

7 Lees, Keeping Tito Afloat, 44.


8 “Paper Prepared by the Policy Planning Staff,” in Foreign Relations of the United States, 30 June 1948,
Eastern Europe; The Soviet Union. Volume IV, Slany, William Z., Herbert A. Fine, and Rogers P. Churchill eds.,
(Washington: Government Printing Office, 1974), Document 702.
9 Lees, Keeping Tito Afloat, 53-54.
10 “The Ambassador in Yugoslavia (Gannon) to the Secretary of State,” in Foreign Relations of the United

States, 10 January 1949, Eastern Europe; The Soviet Union, Volume V, Roger P. Churchill et. al eds., (Washington:
Government Printing Office, 1975), Document 519.
11 Lees, Keeping Tito Afloat, 51.
12 Lees, Keeping Tito Afloat, 56-64.
13 Ibid.,
co-operation between the two states was not plausible.14 Their conclusion rested on the idea that

Tito was “a vital weakness in Russia’s expansionist plans” and was a perfect example of the idea

that a communist state could survive outside of the Eastern bloc.15 This unrequited support for

Tito, despite the lack of reciprocity, was dubbed the “wedge strategy.” It was meant to encourage

deviation such as that of Yugoslavia’s from the satellite states using Tito’s example. By

maintaining Tito’s Yugoslavia in stable condition, the USA could show the benefits of separation

from the Eastern bloc while simultaneously damaging Russia’s reputation.16 Thus the National

Security Council (a forum of high ranking officials meant to aid the President of the United

States in matters of military significance and foreign policy) report NSC 18-2, which was

adapted into US foreign policy in 1950, became the first attempt for the US to maintain

economic ties with Yugoslavia without demands on Tito’s internal policies.17 This policy was

accompanied by an investment of 17 million US dollars meant to be given to the Yugoslav

government fort oil rigs and gasoline.18 Only months later, Tito severed his support from

communist Greek rebellions – something which was indirectly requested by the US.19 Clearly,

both sides were in an ideal position to benefit from each other’s co-operation.

In November of 1949, another policy created in accordance with a National Security

Council report, NSC 18-4, expanded the US “wedge” strategy toward Yugoslavia. The NSC

influenced policy suggested that while Yugoslavia could survive communist expansion in the

14 “Paper Prepared for the Under Secretary of State’s Meeting,” in Foreign Relations of the United States,

14 February 1949, Eastern Europe; The Soviet Union, Volume V, Slany, William Z. and Rogers P. Churchill eds.,
(Washington: Government Printing Office, 1975), Document 525.
15 Ibid.
16 Ibid.
17 “Memorandum by the Secretary of State to the Executive Secretary of the National Security Council

(Lay),” in Foreign Relations of the United States, 16 October 1950, Central and Eastern Europe; The Soviet Union,
Volume IV, William Z. Slany, Charles S. Sampson, and Rogers P. Churchill eds., (Washington: Government
Printing Office, 1980), Document 844.
18 Lees, Keeping Tito Afloat, 67.
19 “The Chargé in Yugoslavia (Reams) to the Secretary of State,” in Foreign Relations of the United States,

24 June 1949, Eastern Europe; The Soviet Union, Volume V, Slany, William Z. and Rogers P. Churchill eds.,
(Washington: Government Printing Office, 1975), Document 549.
war, it needed not only full economic support from the United States, but also full military

support.20 The US believed with such help, Tito would not only provide an example for other

satellites of the USSR, but also foster a positive trade relationship.21

The success of Yugoslavia at the time can be measured through the influence of

Yugoslav policy toward other communist countries such as China. During the same period of

increased US involvement in Yugoslav foreign relations, the US had also begun to invest in

some Sino- Yugoslav policies. The first such National Security Council led policy, NSC-34,

outlined the USA’s hopes for China to move in the same direction as Yugoslavia, and in 1949

through NSC48-2 the US, attempted to “exploit” through: “political, psychological, and

economic means, any rifts between the Chinese Communists and the USSR”.22 These policies

geared towards China coincided with the progression of US-Yugoslav relations and illustrated

the value that the United States placed on Yugoslavian independence. The US believed that the

progress made in Yugoslavia was already substantial enough to foster a larger split between the

USSR and other eastern communist countries, and was waiting for the opportune moment to

capitalize on their “wedge” policy geared financial investment.

Despite this, they could not create a further split while danger continuously resided in the

periphery of the Yugoslav border. As conditions in Yugoslavia worsened in 1950 as a result of

food shortages nation-wide and an inevitable food crisis, Yugoslavia became more than ever in

desperate need of US aid, and, in the context of the ongoing Com-inform blockade, military

supplies.23 While the Yugoslavs did not directly assert their need for military assistance, a report

20 “Editorial Note,” in Foreign Relations of the United States, 1949, Eastern Europe; The Soviet Union,
Volume V, William Z. Slany and Rogers P. Churchill eds., (Washington: Government Printing Office, 1975),
Document 595.
21 “Memorandum of Conversation, by the Deputy Director, Office of European Affairs (Thompson),” in

Foreign Relations of the United States, 17 February 1949, Eastern Europe; The Soviet Union, Volume V, Slany,
William Z. and Rogers P. Churchill eds., (Washington: Government Printing Office, 1975), Document 529.
22 Beatrice Heuser, Western "Containment" Policies in the Cold War: the Yugoslav Case: 1948-1953,

(London: Routledge, 1989),70-75.


23 Lees, Keeping Tito Afloat, 84.
by the PPS concluded that by 1950 the USSR threat had not seized but was rather becoming

more militant, and should be countered with the USA’s “political, economic, and military”

support.24 The USA’s concern over losing Yugoslavia had already led to aforementioned policy,

NSC-18-4, which stipulated that if there was an attack against Yugoslavia the US would

intervene indirectly through military support.25 Due to the policies directive which enforced aid

for Yugoslavia’s defensive security, Yugoslavia’s desperate situation, it’s inability to feed its

population and subsequently allocate resources for defensive organization, required the US to

provide any aid necessary for its political independence (both military and economic). Over the

following year, the US authorized a shipment of military supplies to be sent from the US to

Yugoslavia, provided them with over $100 million in economic support and emergency food

assistance, and proceeded to help Yugoslavia build a much-needed iron mill.26

As Yugoslavia continued to struggle against the Soviet-led blockade, the US found new

ways of providing them with indirect assistance. By stressing humanitarian reasons but also

focusing on Yugoslavia’s vulnerability to Soviet occupation the United States were able to

secure for Yugoslavia substantial aid from the Export-Import Bank, the Economic Cooperative

Administration, and most importantly the Mutual Defence Assistance Program (MDAP).27 To

access such funds however Yugoslavia could not remain impartial, but instead had to forge

diplomatic ties with the US. In order to receive access to any funds the US requested a mutual

bilateral defence agreement between the two nations.28 After deliberations between Ambassador

Allen and the Yugoslavian deputy foreign minister Mates, an agreement was reached which

24 Lees, Keeping Tito Afloat, 85-86.


25 “Editorial Note,” in Foreign Relations of the United States, 1949, Eastern Europe; The Soviet Union,
Volume V, William Z. Slany and Rogers P. Churchill eds., (Washington: Government Printing Office, 1975),
Document 595.
26 Lees, Keeping Tito Afloat, 87-89.
27 Lees, Keeping Tito Afloat, 92-93.
28 “Memorandum Prepared by the Department of State,” in Foreign Relations of the United States, 25

October 1950, Central and Eastern Europe; The Soviet Union, Volume IV, William Z. Slany, Charles S. Sampson,
and Rogers P. Churchill eds., (Washington: Government Printing Office, 1980), Document 847.
included rights for America to distribute goods sent to Yugoslavia, annual reports on use of

goods by Yugoslav governments, and an agreement that the goods be used in Yugoslavia alone.29

In return, Yugoslavia promised to provide raw materials to the US, and agreed to defend and

supply the US “reciprocal(ly)” if such a “deficiency in its own resources” should arise.30

Following the agreement, the United States sent out subsequent economic aid provisions to

Yugoslavia totalling in 38 million dollars.31 The political and economic situation of the time was

beneficial in closely tying these two countries together.

As the aid from the US increased, so did the willingness of Yugoslavia to co-operate with

the country. In the weeks after the military aid program, Tito proclaimed his support for the UN

against Soviet aggression, and supported the UN in their “united action” which promptly

resolved military conflict in Korea; a statement largely in support of peaceful co-existence of

ideologies rather than the democratic invasion of Korea (yet also filled with connotative

meaning).32 Yugoslavia also began to shift into internal policies guided by Western influence.

They began to release thousands of political prisoners, including the Archbishop Stepinac, who

was arrested at the start of the communist revolution against American wishes.33 Additionally,

Yugoslavia allowed for churches and religious practices to resume their services, removed

housing privileges of those who work in government, and slowly started to decentralize their

industries.34 These actions were significant in the context of Yugoslavian-US relations as they

marked an official departure from communist policies followed by the USSR and other eastern

29 “The Ambassador in Yugoslavia (Allen) to the Yugoslav Deputy Foreign Minister (Mates),” in Foreign
Relations of the United States, 20 November 1950, Central and Eastern Europe; The Soviet Union, Volume IV,
Slany, William Z., Charles S. Sampson, and Rogers P. Churchill eds., (Washington: Government Printing Office,
1980), Document 865.
30 Ibid.
31 Lees, Keeping Tito Afloat, 94.
32 “The Ambassador in Yugoslavia (Allen) to the Secretary of State,” in Foreign Relations of the United

States, 23 October 1950, Central and Eastern Europe; The Soviet Union, Volume IV, Slany, William Z., Charles S.
Sampson, and Rogers P. Churchill eds., (Washington: Government Printing Office, 1980), Document 846.
33 Lees, Keeping Tito Afloat, 91-92.
34 Lees, Keeping Tito Afloat, 91-92.
European communist countries, and subsequently an official social integration into the Western

sphere of influence At this time the two countries were at this time almost at their peak of

mutual relations.

However, by 1951 the Soviet threat had not ceded, and an invasion by the Soviet army

seemed imminent. Yugoslavia was weary of asking the US for direct large-scale military

assistance, due to the alleged military neutrality between the two states. They were worried that

such a level of military involvement would threaten their authority as a communist regime.

Despite this, Lees states that there were private discussions between the CIA and Yugoslavia

which eventually led to small shipments of military aid being sent out.35 As Yugoslavia

continued to hesitate asking for help, the US took matters into their own hands and shipped

surplus military goods to Yugoslavia.36 A couple of months later Truman adopted another

National Security Council report in which the US stated its intent to provide Yugoslavia with

complete military support, if war were to break out in the East.37 In Julу of 1951 Yugoslavia had

finally made a formal agreement and military supplies were quickly shipped overseas, with an

additional $30 million in economic support, and $60 million set aside for the following year.38

By the end of 1952, the United States were no longer Yugoslavia’s economic support; they were

also their military partners.

During the next two years, Yugoslavia began to affiliate themselves with the remainder

of the Western World. Due to the looming USSR threat, Yugoslavia began to actively discuss

joint defences between themselves, Turkey, and Greece.39 This led to the hope that Yugoslavia

would fully shift allegiances to the Western World and join NATO. In 1952, The US joint-chief

35 Lees, Keeping Tito Afloat, 99.


36 Lees, Keeping Tito Afloat, 99.
37 Lees, Keeping Tito Afloat, 102-103.
38 Lees, Keeping Tito Afloat, 103-108.
39 Lees, Keeping Tito Afloat, 111.
staff recommended that NATO should become involved in Yugoslavia “as soon as politically

possible”.40 The US had also begun to make contingent plans, despite Yugoslavia’s clear

opposition, to gradually “integrate” the former into NATO.41 Yugoslavia responded quickly with

their complete refusal to join NATO and condemned the US for taking advantage of

Yugoslavia’s situation.42 This crossroads was then unknowingly, the beginning of a degradation

of US-Yugoslav relations. The threat of the USSR blockade was diminishing, and Yugoslavia no

longer required much military assistance, they were decidedly against joining NATO, and their

Cold War political value seemed to have reached its limits.

Everything changed in USA-Yugoslav relations when Eisenhower came into office in

1953. This sudden shift was a result of Eisenhower’s foreign policy, which alongside his political

strategies varied greatly from that of Truman. Eisenhower, a Republican, campaigned on a more

forceful “New Look” in foreign policy, and specifically applied this perspective to communist

aggression and communist political relationships.43 Eisenhower was less understanding of

Yugoslavia’s unwillingness to join a collective defensive system or incorporate themselves

directly into the Western world.44 To Eisenhower Yugoslavia would have to add to the defences

of the West for continued economic support, rather than serve its previous purpose in stagnantly

exploiting ideological weaknesses of the USSR (which by 1953 had lost interest in militantly

incorporating Yugoslavia back into its regime). Eisenhower also argued for a hard-line

negotiation strategy.45 Tito would have to join NATO, inspire other satellite movements, or

otherwise provide tangible political gains for the West in order to receive any further aid from

40 Lees, Keeping Tito Afloat, 114.


41 Lees, Keeping Tito Afloat, 114.
42“The Ambassador in Yugoslavia (Allen) to the Department of State,” in Foreign Relations of the United

States, 25 September 1952, Eastern Europe; Soviet Union; Eastern Mediterranean, Volume VIII, Edited by Baehler,
David M. et al. eds., (Washington: Government Printing Office, 1988), Document 655.
43 Lees, Keeping Tito Afloat, 121-123.
44 Lees, Keeping Tito Afloat, 121-123.
45 Lees, Keeping Tito Afloat, 121-123.
the US.46 The new policies enacted by Eisenhower would be reminiscent of the initial policies

enacted by the PPS in 1948. There would have to be reciprocity between the two nations for

either to gain ground.

This new approach was problematic from the start. Stalin’s death in 1953, gave little time

for the Eisenhower administration to prepare the anticipated policies and implement them into

US-Yugoslav relations. While the CIA predicted that USSR-Yugoslavian relations would not be

affected by Stalin’s death, the new USSR leader’s modernized approach soon proved

otherwise.47 Khrushchev’s ascent to power signalled a change in the USSR’s relations with its

satellites. With many countries protesting following the death of Stalin, Khrushchev’s policies

allowed for an open relationship between the USSR and its controlled states.48 The USSR’s

strong desire to rebuild ties with Yugoslavia as well as their new policies which allowed for each

satellite to find its own road to communism, as opposed to Eisenhower’s hard-line strategy,

proved to be more favourable in fostering Yugoslavian allegiances/relations. This ultimately led

to Yugoslavia’s slow separation from the western sphere.49

Thus, by 1954, the United States had begun to adopt a less ambitious view towards US-

Yugoslav relations. They no longer attempted to incorporate Yugoslavia into NATO and did not

aim to provide them with aid. The adoption of report NSC 174, outlined new hopes for the

satellite. It stated that although Yugoslavia remained a threat to USSR’s authority, there was a

very limited chance that any other states would follow their example.50 As USSR relations with

Yugoslavia continued to improve, US changed the conditions for Yugoslavian aid. In short, the

46 Lees, Keeping Tito Afloat, 122.


47 “Probable Consequences of the Death of Stalin and of the elevation of Malenkov to Leadership in the
USSR,” March 12,1953, (Washington, DC: Central Intelligence Agency, 1998).
48Lees, Keeping Tito Afloat, 124-125.
49Lees, Keeping Tito Afloat, 124-125.
50Lees, Keeping Tito Afloat, 134.
new process required Yugoslavia to pay for goods, rather than receive hand-outs from the US.51

In a decisive moment when Yugoslavia requested aid from the US in the amount of 700 000 tons

of wheat, the US replied that they would sell them 500 000 tons for 10 million.52 The free-

support of the US was running out. The rate of exchange between Yugoslavia and US fluctuated

for a number of years following the policy shifts. Those mostly depended on the Yugoslav’s

relationship with Russia, however overall, Yugoslavia proffered to deal with other communist

factions over the Western World.53 Yugoslavian and US relations would not reach another high

point and would gradually diminish by 1956.

Although the “wedge strategy” from 1948-1956 had to some extent created a positive

relationship between the US and Yugoslavia, its ultimate failure in beginning a Com-inform split

illustrates one of the core downfalls of American Cold War foreign policy in the 1940’s and

1950’s. It was not so much an issue of negotiation or incentives that prevented other nations

from following Yugoslavia’s example or Yugoslavia from joining NATO. What the US provided

to Yugoslavia was in fact largely central to their political independence and the development of a

mutual relationship. Rather it was the inability of the US to understand the political, emotional,

and symbolic ties of Yugoslavia and the other satellites to their communist ideology that

hindered the strategies success. The US “wedge strategy” was centred on an unwavering

assumption that an incentivized relationship with Yugoslavia, promoting the virtues of a

“westernized” ideology, would in itself be enough to foster a split between the USSR and its

satellite nations. Their approach however failed to account for deep-rooted cultural and social

issues which resulted in the preceding communist uprisings in these nations, the strongly held

51Lees, Keeping Tito Afloat, 144-145.


52 “The Secretary of State to the Embassy in Yugoslavia,” in Foreign Relations of the United States, 18
November 1954, Eastern Europe; The Soviet Union; Eastern Mediterranean, Volume VII, Baehler, David M. et al.,
eds., (Washington: Government Printing Office, 1988), Document 715.
53 Lees, Keeping Tito Afloat, 145-150.
political views of the nation’s leaders (like Tito), the relationships between the people and the

state, and the inherent risks in opposing the Soviet regime. By focusing solely on the financial,

military, and political implications of their support the US was only able to establish a mutual

cost-benefit relationship with Yugoslavia, something that would hardly displace the strong

ideological ties between the eastern communist countries.

Bibliography

Primary Sources

Truman (1945 -1952)

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Office, 1969. Document 1043.

1948

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Herbert A. Fine, and Rogers P. Churchill. Washington: Government Printing Office, 1974.
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1949

“The Ambassador in Yugoslavia (Gannon) to the Secretary of State.” In Foreign


Relations of the United States. 10 January 1949. Eastern Europe; The Soviet Union. Volume V.
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(Thompson).” In Foreign Relations of the United States. 17 February 1949. Eastern Europe; The
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1950

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Slany, William Z., Charles S. Sampson, and Rogers P. Churchill Washington: Government
Printing Office, 1980. Document 847.

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(Mates).” In Foreign Relations of the United States. 20 November 1950. Central and Eastern
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Rogers P. Churchill. Washington: Government Printing Office, 1980. Document 865.

1952
“The Ambassador in Yugoslavia (Allen) to the Department of State.” In Foreign
Relations of the United States. 25 September 1952. Eastern Europe; Soviet Union; Eastern
Mediterranean. Volume VIII. Edited by Baehler, David M. et al. Washington: Government
Printing Office, 1988. Document 655.

Dwight D. Eisenhower (1953 -1960)

1953
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1954
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Secondary

Heuser, Beatrice. Western "Containment" Policies in the Cold War: the Yugoslav case:
1948- 1953. London: Routledge, 1989.

Lees, Lorraine M. Keeping Tito Afloat: The United States, Yugoslavia, and the Cold War.
University Park: Pennsylvania State University Press, 1997.

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