EKONOMSKI INTERESI SAD U JUGOSLAVIJI IZMEĐU DVA SVETSKA RATA
US ECONOMIC INTERESTS IN INTERWAR YUGOSLAVIA

Summary/Abstract: The author suggests that post WWII US-Yugoslav relations had at least some of their roots in US-Yugoslav interwar economic relations. Unfortunately, these interwar economic contacts have, until now, received almost no attention by either American or Yugoslav scholars. From a purely interwar perspective, the author sees US-Yugoslav economic contacts as a case study in American activities in what Americans perceived as an economically marginal nation. In the years between the wars Eastern Europe in general and Yugoslavia in specific took a back seat to other parts of the world in terms both of American dollars and of American concern. At the time of its creation, Yugoslavia was not unknown to Americans and American businesses, and it needed foreign commerce and capital for reconstruction and development. Both countries expected a closes post-war relationship but those expectations never fully materialized. Initially at least (1919 - 1921) this was the result of a combination of factors ranging from post-war depression in America through negative press coverage of developments in the Balkans to inflation and trade controls in Yugoslavia. In the main, between 1919 and 1926, the United States government was unable or unwilling to promote economic contacts. When the war ended it stopped lending money itself and it discouraged private American banking institutions from lending money to governments which had not funded their war debts to the United States. The Commerce Department’s skepticism about Yugoslavia’s economic stability discouraged trade and investments. In the late 1920s and early 1930s, the United States government actively encouraged American trade with Yugoslavia but American trade policies made it difficult for Yugoslavia to sell to America. Yugoslavia’s chronic dollar shortage led, in the mid to late 1930s, to Yugoslav trade restrictions against American goods. Nevertheless, contacts did develop. In 1922 and then again in 1927 American banking houses floated major dollar loans to the Yugoslav government. American bankers and investors also loaned Yugoslav municipalities developmental moneys during the 1920s. The world wide economic crisis in the early 1930s led to Yugoslavia’s inability to service its foreign currency debts and brought an end to further American loans. Demands that these pre-war debts be paid would affect post WWII US-Yugoslav relations. In the late 1920s and early 1930s American businesses began increasingly to invest directly in Yugoslavia. Standard Oil of New York built a major refinery and controlled 50% of Yugoslavia’s petroleum supply and distribution. International Telephone and Telegraph and American-Yugoslav Electric Company, both subsidiaries of huge American corporations, invested in or owned facilities in Yugoslavia. The same is true of several other American companies. They were all hurt, in the mid to late 1930s, by Yugoslavia’s imposition of currency controls which made it difficult to impossible to convert dinar profits into exportable dollars. A slow but steady increase in American exports to Yugoslavia during the early to mid 1930s was halted, after about 1935, by Yugoslavia’s imposition of import restrictions on countries with which it did not have clearing arrangements - i.e. it decreased purchases which needed to be paid for in dollar currency. Extensive negotiating between the American and Yugoslav governments was not able to resolve this continuing dollar currency related impediment to bi-lateral economic contacts. German suppliers came more and more to replace American. The author suggests, in conclusion, that American economic involvements in Yugoslavia occurred, that they were more important for Yugoslavia than for the United States, and that they carried little if any contemporary political overtone. American business interests were limited by distance, unfamiliarity with the region, and by Yugoslavia’s marginal importance to America’s economic expansion. Motivated primarily by a desire to preserve its dollar currency reserve, the Yugoslav government was, for its part, willing and able to limit America’s economic penetration of Yugoslavia. Neither the American nor the Yugoslav governments were willing to make any special accommodation to the economic needs and/or practices of the other country in order to encourage greater contact.

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