740.00119 (Potsdam)/5–2446

No. 273
Briefing Book Paper
top secret

Payment of Reparations by Austria

Agreement should be reached by the three powers on the question of reparation payments by Austria.

The United States Government is opposed to the exaction of reparations from Austria despite her contribution to the German war effort. It feels that such an attempt would be economically unrealistic and would have dangerous political implications in Central Europe.


The policy of this Government is based on these considerations:

A program of reparations for Austria analogous to that projected for Germany would be inconsistent with the sense of the Moscow Declaration1 and would require a reversal of the policy on which the Declaration is based. This policy implied an undertaking on the part of the subscribers to the Moscow Declaration to create economic conditions favorable to the preservation of Austrian independence.
It is believed that an attempt to force reparations from Austria would turn the Austrians against us and tend ultimately to strengthen Germany in future years by forcing Austria back into her arms.
This Government is highly skeptical of the ability of Austria to make substantial payments of reparations. In this connection it is [Page 343] recalled that Austria’s World War I reparation obligations were virtually cancelled by the Allies as early as 1923 in appreciation of her difficult international economic position.
The dislocation of Austrian economy ensuing from her separation from Germany and the fact that Austria is a food deficit area indicate that in the early post-war period the country will require substantial relief and possibly also financial assistance. If the United States should participate in such measures of assistance while Austria is forced to carry a reparations burden, this country would, in effect, be financing in major part the payment of Austria’s reparations.
This Government feels that the Austrian people cannot be judged now to have failed to aid in their own liberation, considering the power of the Gestapo in Austria and the little aid received from outside until the entry into Austria of the Soviet Army in April 1945.

A program limited to the transfer of existing capital equipment clearly in excess of the healthy peacetime requirements of the Austrian economy, such as machinery in armament plants erected since 1938, might be advanced for consideration by the three powers and need not necessarily conflict with the policy of this Government as stated.

  1. Text in Department of State Bulletin, vol. ix, p. 310.