YUGOSLAV ELECTRONIC FACILITIES AND PROBLEMS                     
           At R. R. Savodi Factory, Nis, Serbia                                
                                                                              
   To finalize the report on R. R. Savodi facilities and problems,             
 the following conclusions are drawn:                                          
                                                                              
   1.  Type A technical assistance in the x-ray field, particularly            
 in the design and application of apparatus, would be helpful to the staff     
 at R. R. Savodi.  It is understood that such technical assistance would      
 not include in-plant training, but rather visits to a number of factories     
 and x-ray apparatus installations.                                            
                                                                              
   2.  Type B technical assistance in the x-ray tube and apparatus             
 field would be helpful after production of tubes and apparatus is established.
 Production in this field will not, be achieved before the early part of      
 1953.                                                                         
                                                                              
   3.  Further Type A or Type B technical assistance in the pro-               
 duction of receiving tubes as might be furnished through the Mutual           
 Security Agency would not be particularly effective until a decision is       
 made in Yugoslavia regarding the procurement of U. S. miniature tube pro-
 duction equipment and the availability of a U. S. manufacturing license is
 fully explored.                                                               
                                                                              
   Production and technical assistance in the form of equipment,               
 its installation, and the training of personnel in the production of          
 receiving tubes, x-ray tubes or apparatus is customarily supplied by direct
 arrangements between American firms and foreign organizations under          
 licensing agreements.  Such a transaction is outside the scope of technical
 assistance dollar financing and can not, be arranged by the Mutual Security
 Agency.  While it is possible to obtain catalogues, price lists, etc. from
 U. S. sources of production equipment through correspondence, it is sug-      
 gested that an engineer from the R. R. Savodi staff be sent to the U. S. A,
 to examine the available U, S. production equipment and to contact U. S.      
 companies relative to licensing arrangements.  The engineer could also be     
 present during the initiation of any program for the procurement of U, S.     
 equipment.   This recommendation applies to resistor and capacitor pro-       
 duction equipment as well as receiving tube equipment.                        

               Since U. S. electronic manufacturers are operating to           
 capacity in connection with the defense effort,, it should be recognized       
 that a program for immediate technical assistance may be difficult to
 conclude and also that some difficulty may be experienced with the approval
 of export licenses.  Therefore, the management of R. R. Savodi should         
 give careful consideration to the technical services and equipment to         
 which it, now has access in Kurope.  It is recommended that the present      
 technical staff be maintained until the possibilities for American            
 technical and production assistance have b en more completely developed       
 and considered.                                                               
                                                                              
           6,  It is not within the scope of Mutual Security Agency         
 operations to finance the services of either a Yugoslavian or American        
 engineer for the purposes of concluding arrangements of the type mentioned
 in paragraph J above,  Therefore, the class B technical assistance            
 rendered on this project up to this time should be considered completed,      
 The Type A assistance mentioned in paragraph 1 and the type B assistance      
 mentioned in paragraph 2 are separate projects and must, be established      
 through the normal MSA channels and by consideration of the criteria          
 upon which such prospects are normally based. The commercial transactions
 of the type mentioned in paragraph 4 must be arranged directly between        
 the U. S. companies and the Yugoslav organization preferentially with         
 the assistance of a Yugoslavian staff engineer who could spend some time      
 in the U. S. A.  The other alternative would be an arrangement, between a     
 U. S. consulting engineer and the proper group in Yugoslavia.                 
                                                                              
                                        MARVIN HOBBS                            
                                        Consultant,                            
                                        Mutual Security Agency