863.00/935
Memorandum by the Secretary of State
The Austrian Minister called, he having returned last Friday from a visit to Austria, and delivered a message of greeting and goodwill from Chancellor Dollfuss.
The Minister said that he had many things in his mind about conditions over there. He proceeded then to refer to the hemmed-in condition of Austria, between Germany on the one side and Yugoslavia, Italy and certain other states on the other, and stated that Austria was obliged to do just the best she could in the circumstances; that she should try to keep on working relations with all, especially Germany. He said that Dollfuss did not care any too much for the Heimwehr; that he was obliged, of course, to work with that group for the present, but by degrees he hoped to free himself from this special relationship and govern all groups and elements impartially and with an appeal to all. He said he did not know how long the Hitler regime would last; that he was not in favor of its continuance.
The Minister then referred to the economic condition of Austria, stating that it had considerably improved since the regional arrangements with Hungary, Czechoslovakia, and Yugoslavia for exchanges of certain kinds of their respective production. He added that conditions were not, by any means, yet what they should be, and that his country had already carefully listed a number of commodities they produced which were not competitive with this country; also a list that were very slightly competitive, and finally a third list of frankly competitive products. He expressed the hope that, as soon as practicable, arrangements might be made between our two countries for some trade with respect to the first class of products and probably some of the second, while the third could await future developments. I stated that when we reached a suitable stage to take up conversations with his government on this general subject of reciprocity trade relations, we would be much interested in doing so.