800.515/1060: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Winant)
4388. For Phillips.82 We are somewhat puzzled by the situation which has developed with reference to the proposal to use a military schilling in Austria, Several months ago the British approached us with the suggestion that we should use a military schilling. While it had been our thought that military marks should be used in initial operations in that area we agreed to the proposal and indicated we would support a British approach to the Soviet Government on the subject. As it appeared that the British had in mind not only using the military schilling for military expenditures but also for supplanting the mark entirely in the area, we asked for more information on their thinking on the subject.
The British informed us that they wished to defer approaching the Soviets until agreement had been reached between the two Treasuries on all technical details concerning the currency. We understand an agreement was reached some weeks ago.
In the meantime, reports have reached us through the U. K. Treasury Delegation in Washington of differences of opinion within the British Government regarding the use of the schilling which appeared to be confirmed by the Embassy’s 3969 of May 1683 from Taylor84 to Treasury. Within the past several days we have learned from the U. K. Treasury Delegation that the British are inclined to believe that the schilling should be introduced immediately for use by the troops but are reluctant to make a final decision. We understand the British view to be based upon political considerations and gather that it may represent foreign office views as against contrary views of the Bank of England. We have also gathered that, despite the foregoing, the British have no immediate intention of proceeding with the printing of schillings, since they do not wish to discuss the matter with the Russians until they are able to give the Russians a better idea of our views with respect to Austria, We are not clear whether the British have in mind more definite political plans or financial plans.
Any background which you could give us on this subject would be most helpful. We assume that Taylor will report fully to Treasury on the technical aspects of the subject and that copies of relevant papers (such as minutes of Austrian working party mentioned in paragraph 1 of Embassy’s 3969) will be sent to Washington in sufficient number for distribution to interested agencies here. The only [Page 834] copies of these minutes the Department and the Treasury have received so far have come to us through the U. K. Treasury Delegation.