Paris Peace Conf. 184.011102/696
Mr. Albert Halstead to the Secretary of State63
Subject: Austria and America, the unfavorable position in which the United States has been placed.
Sir: I have the honor to inform the Department that for a considerable time the Viennese newspapers have been almost daily printing reports about what the United States would do for the salvation of Austria. It was first assumed that the American Government would grant a credit to the Republic of Austria. Some time ago when I saw Dr. Renner I told him just why a credit from the American Government was practically impossible, stating that tax-payers’ money could not be extended without the consent of Congress, and that the granting of money to a country with which the United States had lately been at war and with which she was still in a legal state of war, would be establishing a new precedent and therefore the more difficult. After this conversation with the State Chancellor, in which the remark about American credits was only incidental, reports of what the American bankers were certain to do began to appear in the papers, and a few days later there was a statement that the American Government itself could do nothing. The speech of some days ago by Mr. Lloyd George in which the financing of Austria was put up to America, was published in the newspapers, and one or two days after it was reported that the Americans were going to buy one or another great industry, for example, a company with $100,000,000 had been formed to exploit Austria, take over all its public services, and in general manage affairs. Again there came the report, said to be from official sources, of a gift of 30,000 bales of cotton, and to-day it appears that American capital has suddenly discovered value in the most inefficient telephone service in the world.
Rumors fly around Vienna, particularly in financial circles, as to what is to be expected from America. There is no idea so impossible as not to be immediately believed. The whole atmosphere has been fraught with menace to friendliness for the United States, and has placed the American people in a false and absurd position. Cross currents of feeling have been created; the one, that the United States, as a great capitalist was about to buy everything worth while and [Page 602] fetter Austria with a load of debt which would make the people practically slaves to American capitalists. The harmfulness of this report is the more evident when it is remembered that the United States alone of the four great powers has not been purchasing Austrian industries and banks at prices far below their value at the time when each of these other powers was represented as too poor to assume any financial responsibility in connection with assisting Austria. It was the more unfortunate also because the Americans, unlike the Italians and the French, had not assisted in the exporting of Austrian securities and other values to the benefit of the exporters. The other cross current was that America alone could save the Austrian people from death through freezing and starvation and from utter anarchy, and that it was the duty of America to be that lifesaver. Again when the Austrian Government took an American connected with the Child Feeding as an adviser in the matter of the soup kitchens which the Vienna municipality and the Austrian Government had financed, it was immediately called an “American” undertaking.
It will be seen from the above that the United States has been put in the position of being expected to do the impossible, and when it had become realized that none of the things anticipated could be done it would have meant that the United States would be charged with having been guilty of “another bluff”, and would have been placed in a most unlovely position. Even as it is, one notices a growing unfriendliness.
In conversations with business men and with other persons including officials, when the remark has been made as to what “America would do”, I have lately distinctly indicated how unwarranted reports had been and how difficult it would be to accomplish anything because practically all Austria’s assets had been offered a number of times to every nation that had a possibility of raising money, and I have at the same time politely protested against the general disposition to load upon the back of America all the unbearable burdens resulting from the struggle. For some days it has seemed as if a statement should be made, and I yesterday forwarded the following to the Foreign Office with the request that it be issued through the Official Correspondence Bureau:
“The American Commissioner, Mr. Halstead, expressed regret today at the frequent publications in Vienna newspapers of unfounded reports of what the United States proposes to do for Austria. Such reports place the United States in a false position. At the same time they also make an unfavorable impression in America.
“The sympathy of the United States for Austria and for all of Europe has been sufficiently evidenced by what has already been done. The continuance of the Child Feeding and the recent gift of 12 cars of Red Cross supplies to the Vienna hospitals, are sufficient indications [Page 603] of that sympathy. It is to be hoped that there will be an end to publications which are described as coming from official sources for which there is no basis in fact.
“The American Commissioner further stated that the American Mission, notwithstanding reports to the contrary, is to remain at Vienna until the resumption of regular diplomatic relations between the United States and Austria.”
In the afternoon I asked Mr. Heingartner to telephone the Acting Foreign Secretary, Minister Ippen, and ask if my note had been received. Mr. Ippen was quite worried by the proposed publication and said that it would create great consternation. He also said that he proposed to modify my statement, and Mr. Heingartner switched him over to my telephone. I told Mr. Ippen that my notice could not be amended without my approval and that I would go over to the Foreign Office to see him. I went, accompanied by Mr. Heingartner, and the whole situation was very carefully discussed. Mr. Ippen was unfortunately overwrought by his heavy responsibilities. He said Austria had hoped very much from America, and I told him that that was to be regretted. I mentioned what America had done and stated that those things had apparently been forgotten. I spoke of the heavy financial burdens that the American people were bearing and the fact that they were not responsible for the conditions in Austria or for any of the acts that had brought on the war. He said “But we relied on President Wilson’s fourteen points”. I told him that those fourteen points were an ideal and not a promise, but regardless of them the result would have been the same; that the military and domestic positions of Austria were impossible, and I remarked that I need not remind him of what Dr. Renner had said as to the friendly attitude of the American Commissioners to negotiate peace during the consideration of the Austrian treaty. The whole discussion was very friendly, but our impression was that the name of America had been used with at least the tacit assent of the Government in the hope of lessening the nervousness throughout the country. I also felt that the other Missions had indicated that America was the only possible source of help for Austria. I agreed to a delay of the publication for 24 hours.
Before preparing the statement all phases had been considered and I had consulted with Colonel C. B. Smith of the Sub-Committee of the Reparation Commission, who agreed that it was imperative that these reports should be denied and in such a way as not to have it appear that nothing would be done, but rather to show the unwisdom of publications for which there was no real ground. Accordingly, I to-day requested the publication of the statement, which Mr. Ippen agreed to do with the remark that he had already indicated the consternation that it would cause.
I have [etc.]
- Copy transmitted to the Commission by Mr. Halstead.↩