740.019 EAC/1–3045: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Winant)
Washington, March 15,
1945—midnight.
207. ReUrtel 1051 January 30, 8 p.m. 1. In connection with the discussions on the control machinery for Austria the Department has noticed several statements by members of the EAC which apparently assumed that Austria would be required to pay reparation.
- 2.
- The Department is highly skeptical of Austria’s capacity to make
substantial reparation payments. In this connection your attention
is called to the following considerations:
- (a)
- In the process of being separated from Germany and reconstituted as an independent national state, Austria will lose the bulk of its most important market.
- (b)
- Austria had a consistently unfavorable balance of trade throughout the inter-war period.
- (c)
- The Allies’ virtual cancellation of Austria’s World War I reparation obligations as early as 1923 indicated their appreciation of Austria’s difficult international economic position.
- It is realized that the foregoing circumstances are not absolutely conclusive since Austria had a considerable number of unemployed before the war who might be put to work producing reparation goods, especially if the claimants devised means whereby to furnish Austria with the necessary raw materials. It seems to Department, nevertheless [Page 25] that the facts of the situation give little support to belief that much reparation could be obtained from Austria.
- 3.
- Because of the dislocation of the Austrian economy which will probably ensue as a result of the country’s separation from Germany, and because Austria is a food deficit area, there is a strong possibility that the country will stand in need of substantial relief and possibly also financial assistance in the early post-war years. While it is too early to state definitely whether or not the United States will desire to participate in such measures of assistance, it can be said with certainty that if the United States should furnish such aid it would expect that the repayment of its advances would enjoy priority over the payment of reparation. Moreover, the possibility of Austria’s receiving financial aid from this country will be greater in the event that Austria has no reparation burden, for otherwise there would be the well justified apprehension that this country was in effect financing the payment of Austria’s reparation.
- 4.
- By announcing their intention in the Moscow Declaration to establish an independent Austria the powers implicitly undertook to create economic conditions favorable to the preservation of Austrian independence. The Department believes that accomplishment of this task will be difficult enough even if Austria is not obliged to pay a significant amount of reparation.
- 5.
- It is believed that in your discussions of control machinery for Austria you should not continue to imply approval of the principle of Austrian reparation. Instead you should apprise the other members of the EAC of our views of the matter, as otherwise this Government may be placed in the false position of seeming to approve Austrian reparations when in fact we oppose them. It is therefore suggested that you discuss this matter with your British colleague on the Commission with a view to obtaining his support and that thereafter you take the earliest opportunity to set forth in the Commission this Government’s position as stated above. You should emphasize strongly, however, that this Government does favor and expects the restitution of identifiable looted property found in Austria.77
Stettinius
- In telegram 2823, March 19, from London, Ambassador Winant said that he was glad to have the statement on United States policy with respect to reparation and restitution in Austria, but sought to make it clear that he had never indicated in any meetings of the European Advisory Commission that the United States expected that reparation could or should be obtained from Austria (740.00119–EAC/3–1945).↩