Mr. KENNAN. Yes; and I do draw a strong distinction between the Yugoslavs and the Russians. I think I have some grounds for drawing it because I have served in both places now.

The CHAIRMAN. Yes.

TWO IMPORTANT DIFFERENCES

Mr. KENNAN. I had many years of service in Moscow, and in two important respects, one of which is not our business, and the other of which is, I see great differences between them.

In the first place, the Yugoslavs are not-I am convinced of this-under Russian domination.

Senator WILEY. You say they are?

The CHAIRMAN. They are not.

Mr. KENNAN. No; they follow an independent policy. Very often that policy is a lot closer to the policy of the Soviet Union than I would like to see it.

The CHAIRMAN. Yes.

Mr. KENNAN. But it is closer by their own choice and not because they have accepted any bond of discipline or principle to the people in Moscow.

The second difference is that their economy is being permitted to evolve in the direction of a liberalization, in a direction of competition and openness in its relations with the economies of the Western nations, which does distinguish it very sharply from the economy of the Soviet Union or that of other countries under Soviet control. This is something we want to encourage.

IS ALBANIA COMPARABLE?

The CHAIRMAN. That brings up the question of the case of Albania that is coming up immediately. The morning papers say they are now making feelers for trade with the West. Would you say Albania is approaching the same status as Yugoslavia?

Mr. KENNAN. In the sense that Albania is defying the Kremlin for the moment, yes. But in the other sense of having any liberalization internally, not at all.

The Albanians, if you will forgive my words-and I hope this does not look too bad on the record-are the stinkingest Stalinists in all of Eastern Europe. They are the most vicious, unreliable and nasty people that I know of in all of Eastern Europe, and that is saying a good deal when you think of some of the other characters. Senator CAPEHART. More so than the Russian Government?

Mr. KENNAN. Yes, sir. I think the Albanians are worse from our standpoint. Their views toward us, their attitude toward us is worse than that of the Soviet Union. It is comparable only to that of the Chinese Government.

Senator AIKEN. Isn't it a fact that the Albanians can go only so long without defying anybody? This time they picked a big fellow to defy.

Mr. KENNAN. Yes.

REACTION OF OTHER COUNTRIES

Senator SYMINGTON. What I do not quite understand is how are you going to grade these various communisms. We will call Grade A China; Albania, too. Grade B is Russia, and Grade C is Yugoslavia, and Grade D, no doubt, and so forth. All right. That is fine.

But regardless of whether the Yugoslavs would like to see us under communism or not, we know that the Russians would.

Now, we have over in this part of the world various friends, people who are, I think it is fair to say, desirous of sticking with us. Perhaps that it because they know where their bread is buttered, to some extent, but they are our friends: Turkey, Pakistan, Iran, Syria, Jordan, Israel, these countries.

Then we have the less friendly countries who are treated very kindly and sweetly by the Russians, especially when it comes to getting modern military weapons, like Iraq and Afghanistan.

Our friends say, "Here are the Yugoslavs, here are all these people who are either pro-Soviet neutrals or Soviet or Communist anyway," and in the countries that I mentioned we have a great deal of instability. We are liable to lose some of these countries some morning just like that, just like overnight we thought we were in very good shape in Iraq, and we ended up in quite a mess.

WIN ARGUMENTS AND LOSE FRIENDS

What I do not see is how you can expect to get into this sort of a syllogistic development of the nature of the Communist category and, at the same time, hold your friends over there. Take Iran; for many reasons, including some very important military ones that should not be on the record, it is vital for us to have those people as our friends. We are losing all over, due to the psychological reaction to the way that we treat neutralist countries.

This I know, this is not hearsay, because it comes up again and again. For example, Ayub,5 said, "You let Nehru con you into saying that he is a peaceful man, but you give him all the grain he wants and all the pills and all the books and all the food, and then he takes his army and puts it next to me, and he spends $400 million a year on this army, 85 percent of it against me, your friend, and 15 percent against the Chinese Communists.'

If we are going to win this argument by grading communism, as I say-George, you and I have discussed this for 16 years-I do not see where we are going to end up, because we are going to win all the arguments and lose friends in this part of the world as buffer states against the Soviet. That is what I wish you would comment

on.

QUITE A DIFFERENT PROBLEM

Mr. KENNAN. I will not insist on trying to grade them beyond the Yugoslavs.

All I can tell you is that the Yugoslavs represent quite a different problem from the standpoint of American foreign policy than do the people to the east.

5 Ayub Kahn, President of Pakistan.

We have had a great deal of open exchange with them and discussion with them. Hundreds of Yugoslavs have been in this country. I think if you could come over there and travel in that country, talk to these people, you would realize how much closer they are, really, to us, to the West, than might appear on the surface.

A prominent Yugoslav who is in a high responsible position told me last week, "You know, it is my impression that Yugoslav relations with the Soviet Union are actually much worse than appear on the surface, and our relations with the United States much better than appear on the surface.

TITO'S STATEMENTS; DJILAS

Senator SYMINGTON. Why does Tito back Khrushchev against President Kennedy?

Mr. KENNAN. He does it because he is, himself personally, an old Marxist who grew up in the Communist movement, who is sensitive to the charge that he has become a tool of the imperialists.

He is going to remain this way until the end of his days. He is going to go on making these statements. They are going to upset us; they are going to be a burden on our relations.

I have told the Yugoslavs this, and I think most of them realize it very well.

Senator CAPEHART. How old is he?

Senator AIKEN. Seventy.

Mr. KENNAN. Sixty-nine or seventy years old.

The CHAIRMAN. What has happened to Djilas? 6

Mr. KENNAN. Djilas is at large; lives in Belgrade privately at home; is quite bitter. He walks around the streets. He receives foreign visitors, but the fellows in the party won't have much to do with him.

POLICY FORMULATION

Senator AIKEN. Who determines Yugoslav policy? For instance, who determined that Yugoslav would defy Russia in the matter of the UN Expeditionary Force, the police force in the Holy Land, last year? Yugoslavia introduced a resolution to continue that force, which was strongly opposed by Russia. Who determined that policy?

Mr. KENNAN. Well, they have a government like other governments. Tito has the strongest voice, but he is older, and he spends a good deal of time resting up on the island where he has his summer home. He does not always make these decisions personally.

I would suppose that if it was a question of disagreeing publicly with the Russians on important issues, this would not be done without Tito's approval.

This is not the only issue on which they differ from the Russians. They have not supported the Russians on the troika in the Secre

• Milovan Djilas, former vice President of Yugoslavia, was arrested in April 1961, convicted and sentenced to 5 years in prison for revealing state secrets in his book Conversations With

tariat, and there I think you could break out a large number of issues on which they disagreed with them.

Senator AIKEN. They would stand by us so many times when countries that were supposed to be close friends went over the hill.

INCIDENT AT DIPLOMATIC GATHERING

Mr. KENNAN. Senator, let me tell you something that happened the other day. I think this could go on the record.

I was a guest, as all of us diplomats were, of Tito at a hunting party, shooting party, up in the country. In the middle of the evening, he came over and fetched me and sat me down next to him at the table. A couple of his leading figures were sitting there. As soon as all the Soviet bloc Ambassadors saw that, they crowded around because they were curious to hear what would go on between us. The Soviet Ambassador sat right across the table, and the Soviet Ambassador started in with the usual Soviet propaganda line about American militarism and how we were preparing for

war.

Tito, to my surprise, said to him, in effect-we were not talking English, so I cannot give you the exact words-but he said, "You pipe down," and he said, "These people are not going to make war on you if you don't make war on them."

Senator WILEY. Tito said that?

Mr. KENNAN. Yes, to the Soviet Ambassador. He took me under his protection at this moment, and this is the curious relationship we have with these people.

NOT BAD TO DEAL WITH

Now, I can only say that Tito and I have disagreed, and he said to me that same evening, "I sometimes blame myself for not having told you more frankly or more bluntly in private conversations my own views. You wouldn't have been so shocked when I said them at the Belgrade Conference."

I mean, he is not a bad man to deal with. He is not on our side in the ideological sense. He still considers himself a Socialist and a Marxian Socialist, but he is not what he is often described as being, a thug.

I have found him an acceptable person to deal with, and always courteous and nice in his capacity as a host, a man with whom you can have your differences, but whom you must respect.

Senator AIKEN. I found the Yugoslav representative on the Fifth Committee to the United Nations one of the most cooperative, cordial, and apparently one who would go along with the United States, of any of the members of that Committee.

He could not always do it, and I suppose he had instructions to vote against us. But certainly I would not ask for anybody better to work with.

WORTH WORKING ON

Mr. KENNAN. This is just it. It is my impression that the extreme Leninist-Marxist prejudice, by which this Yugoslav regime was

originally inspired, is a dying thing. This is why I want to see us be a little patient with these people.

I do not want to see us shower them with aid, and the sooner that anything that can be called aid, unequal aid, stops with that country, the happier I will be. I hope this will not be more than 3 or 4 years.

But I do want to see us continue to keep our hand in there. I want to see us continue to talk to these people, to argue with them, to point out where we think they are wrong, to point out the advantages that they could have from a really proper association with the West; in other words, I think they are are worth working

on.

WEST GERMAN-YUGOSLAV TRADE

Senator HUMPHREY. Mr. Chairman, may I ask a question?
The CHAIRMAN. Yes.

Senator HUMPHREY. Speaking about trade, do the West Germans trade with the Yogoslavs?

Mr. KENNAN. They do, indeed. They are one of the two greatest trading partners the Yugoslavs have.

Senator HUMPHREY. Mr. Ambassador, the one thing I found out in my journeys is that we are always being lectured by people about not trading with these Russians, and not trading with these Communists, and not trading with these people, and so on.

I was in Germany, and I was told by some of their leading officials and by their newspapers how we were being sort of soft on communism in the very same week that 50,000 troops were landing, the same time that the Germans were letting their draft act expire because they did not even have a government organized, at the very same time they were stepping up their trade in every conceivable way.

I am not angry about their doing it. I just feel sort of like India when Nehru lectures us on aggression. I do not like to be lectured by some of the most eminent and most active business people in the world on the subject of trade.

It just so happens I sat in Poland and woke up one morning and there were 11 new cars in front of the Bristol Hotel, brand new vehicles, seven Mercedes-Benz and two Czechs. I had only been given 2 days before a lecture on how we were being rather confused about Berlin and confused about this Communist menace and confused about communism, et cetera.

I found out in talking to the Polish officials that the West Germans were selling things over there left and right on credits, every conceivable way.

U.S. TRADE SHOULD BE STEPPED UP

We have a law called the Johnson Act that denies us the opportunity to even do business on credit in Poland, even though they paid.

Do the Yugoslavs pay the West Germans for their goods?

Mr. KENNAN. They do.

Senator HUMPHREY. They would pay us, too, wouldn't they?