Truman Papers

No. 275
Memorandum by the Joint Civil Affairs Committee of the Joint Chiefs of Staff1
top secret

Financial and Economic Policies With Respect to Treatment of Austria


Decision has not been reached concerning the question whether Austria is to be required to pay reparations, and if so, whether the reparations should consist of money, capital goods, labor or current production. Inasmuch as it is the United States policy to favor the development of a sound, integrated economy for Austria as a whole, not dependent on Germany, the form and amount of Austrian reparation should be geared to the accomplishment of this objective. It seems that the exaction of labor or financial reparations from Austria would not be in accord with this policy. Reparations in the form of capital goods should be limited to items redundant to a stable Austrian economy. Recurrent reparations should, insofar as possible, be confined to items the production of which tends to support a sound Austrian economy.
In order to accomplish the objective of divorcing the Austrian economy from that of Germany, Austrian private export trade should be encouraged.
Agreement should be sought concerning the extent to which an economic disarmament program for Austria is desirable or necessary as a corollary to the elimination of Germany’s war potential. Agreement should be reached for a close coordination between the Control Council for Germany and the Governing Body for Austria in this field. The Governing Body for Austria, in consultation with the Control Council for Germany, should establish procedures to control [Page 346] the establishment or expansion of industries in Austria which are of a type prohibited or eliminated in Germany.


In order to permit the military authorities to administer Austria, decision at governmental levels be sought on the questions of:
Reparations policy for Austria.
Economic disarmament.
Extent to which Austrian economy will be affirmatively supported or subsidized.
  1. This memorandum was forwarded to Leahy by the Secretary of the Joint Chiefs of Staff on June 26, together with other reports, under cover of a memorandum which stated explicitly: “These reports represent the views of the committees only and have not been approved by the Joint Chiefs of Staff.” Leahy subsequently passed it to Truman.