Foreign Relations of the United States: Diplomatic Papers, 1945, European Advisory Commission, Austria, Germany, Volume III

740.00119 Control (Austria)/3–2445

The United States Political Adviser on Austrian Affairs (Erhardt) to the Commanding General, Mediterranean Theater of Operations, United States Army (McNarney)⁸⁰

London, March 23, 1945.

Dear General McNarney: In a letter of March 12, 1945,⁸¹ which reached me in London on March 15, 1945, Mr. Gray communicated the substance of a conversation of March 12th between you, General Flory, and himself on Austrian Affairs.

Gray informed me that during the course of the conversation, you had invited attention to a number of interesting and highly pertinent questions of policy and had indicated that you would be pleased to have an expression of my views in regard to them. The questions concerned,

(A) Reparations, Restitution and Removal of Property;

(B) Deportation of Labor;

(C) Reform of Land Ownership; and

(D) Allied Efforts to Influence Election Results.

I enclose herewith, for your consideration, a memorandum in which I have endeavored to cover the points raised. The memorandum embodies my personal views, and is based on discussions with Mr. Philip E. Mosely, Political Adviser to the United States Delegation, European Advisory Commission. Mr. Mosely returned to London on March 20, 1945, from a two weeks’ consultative visit to Washington. I have also consulted, in general, with Ambassador Winant on these questions.

My discussions with the above two gentlemen, as well as with Colonel McCaffrey and members of our own planning group here, led to an examination of related topics, and for that reason the memorandum likewise includes brief observations on the “Nationalization of Industry and Other Property.”

Perhaps you may care to have the statements of principle enunciated in the memorandum incorporated in the proposed MTOUSA Directives⁸² which are being prepared for your approval. The Directives are then, as you know, cleared through the Joint Chiefs of Staff and the Secretary of State in Washington, and thereupon come for endorsement before the European Advisory Commission.

Our method of operation continues to be through the European Advisory Commission in the final stage, as a means of securing agreement on the part of the Allied powers, and I agree with you and General Flory that the best way to obtain prompt action by the E.A.C. is to submit to that body draft proposals in the form of Directives. Our thought would be that the E.A.C. will approve the Directives and then recommend them to the four interested Governments.

The principles regarding the removal of equipment and other property from Austria might be incorporated in the proposed Directive No. 17, “Property Control.” The principles on deportation of labor could be incorporated in the proposed Directive No. 22, “The Control of Labor.” The policy of not attempting to influence the results of elections in Austria is to be included in a proposed Directive which is being prepared on the subject of local elections.

If we are fortunate enough to secure prompt action and agreement in the E.A.C. on our Directives, the situation in Austria after the Allied Commission has been established would appear to be adequately taken care of. In handling the problems which may arise in the preceding period of military operations, that is to say before the Allied Commission has been established, it seems to me that the best we can do is to try to make sure that this period is as short as possible. I think it is urgently necessary to achieve agreement among the major powers to the effect that as soon as the forces of one of them enter Vienna, the forces (or token forces) of the others should enter also, and that the Allied Commission should be established right away. Obviously, the key to this situation is an agreement with the Soviets. Your suggested military liaison group may find it possible to work out such an agreement with the Soviet representatives, if and when they meet.

Since the beginning of November 1944, it has been understood among the three Allied Governments that arrangements for participation in the pre-surrender control of Austria should be worked out in the European Advisory Commission subsequent to the negotiation of the agreement on Allied control machinery. In several informal discussions, the United States and the United Kingdom representatives on the E.A.C. have stressed the importance of providing for Allied participation in the control of Austria to begin upon the occupation of Vienna. The Soviets have so far given no indication of their attitude toward U.S. and U.K. participation in the control of Austria in the period prior to the surrender or collapse of Germany; this is a matter which will shortly be considered in the E.A.C. The U.S. delegation on the E.A.C. would be glad to have any informal comments which we may care to send to it directly on subjects relating to the extent of U.S. participation during this interim period. Obviously, General Flory and his staff would have suggestions in respect of the number of men required to make an appraisal of the situation in Austria at that time, solely from the point of view of military government, including questions of supply, displaced persons, refugees, public safety, and the re-establishment of border control.

Colonel McCaffrey concurs in this letter and in the memorandum, and I am sending copies of this correspondence to the State Department, for its information.

Faithfully yours,

John G. Erhardt

[Enclosure]

Memorandum by the United States Political Adviser on Austrian Affairs (Erhardt)

[London,] March 23, 1945.

A. Reparations, Restitution, and Removal of Property

1. The Commission for the Compensation of Damage, agreed upon at Yalta,⁸³ is by its terms of reference confined to Germany. However, the terms of reference could be extended by tripartite agreement to cover Austria as well. So far it has been assumed that the problem of restitution, as distinct from reparations, will be handled in the EAC. (As used by our Government, “restitution” means restoration of identifiable looted objects, or, in the case of unique cultural objects only, transfer of objects of equivalent significance and value. “Reparation” covers all other forms of compensation for war damage and losses, including deliveries of non-looted equipment and property, deliveries out of current production, transfers of property owned abroad by Axis nationals, payments in money or foreign exchange, and performance of labor service.

2. Austria should not be required to make any substantial deliveries or payments on reparation account, but should be required to make restitution of looted property. No decisions have been reached as yet on the procedures for effecting restitution in an equitable manner; if deliveries of property by Austria are made only on restitution account, it might be desirable to pool all property subject to transfer or restitution, for equitable distribution among the claimants instead of applying the straight principle of transfer of identified property to former owners. For example, it would be unfair to French claimants if property removed from France at an early date had become used up or no longer identifiable and, therefore, could not be restored, while property removed more recently from Czechoslovakia was available for return to its owners.

3. We would have no objection to the removal from Austria of plants and equipment useful only for the production of war material, but we are definitely opposed to the removal of facilities essential for the civilian economy (other than facilities looted from Allied Countries).

4. In the period after the Allied Commission is established and has commenced operation, all proposals for the removal of equipment or property from Austria should be referred to the Commission before any action is taken; any such property removed as war booty during the preceding period of military operations should be accounted for and offset against claims for restitution. Agreement on these principles should be arrived at among all the occupying powers. It is hoped that the Allied Commission will be established very soon after the forces of any of the major powers have entered Vienna.

5. Any request by a commander-in-chief for the delivery of equipment or other property for the purpose of removing it from Austria should be passed on by the appropriate division of the Allied Commission. All other transfers of equipment and property between zones should be arranged through the Allied Commission. (All rolling stock, motor transport equipment, and telecommunications equipment in Austria should be operated on a nation-wide basis.)

B. Deportation of Labor

1. No general or indiscriminate draft should be made upon Austrian man-power for labor service abroad. However, ardent Nazis of Austrian nationality should be subject to labor service. For this purpose, categories such as the following might be employed: persons who were members of the Nazi Party prior to March 13, 1938; persons who were active proponents of Naziism thereafter; and persons who authorized or participated affirmatively in racial persecutions.

2. No commander-in-chief of any zone should deport Austrians for labor service by unilateral action. No action of this kind should be taken until the Allied Commission has been established and has passed on the question.

3. Relocation of labor within Austria, and conditions of labor, should be determined by the Allied Commission.

C. Reform of Land Ownership

1. As compared with certain other countries in central and eastern Europe, the ownership of farm land in Austria is not characterized by concentration in large estates. There are, however, large private holdings of forest land. It is possible that movements will develop to break up or nationalize holdings of either type. Also, the Allied Commission may find it necessary, as a part of the de-nazification program or otherwise, to take farm or forest estates into custody. In any such case, the Allied authorities should not promote or put into effect any program of reform of land ownership, but should leave this problem to be dealt with by the future Austrian Government. Any landed property taken into custody should be held in trust for the future Austrian Government, to be restored by the latter to the former owners, retained with compensation to the owners, or otherwise disposed of, as that Government may decide.

D. Allied Efforts to Influence Election Results

1. Control or supervision of elections by Allied authorities should be exercised solely for the purpose of insuring that they are honestly and freely conducted. The Allied authorities should make no attempt to influence the results of elections. Elections should be held as early as is practicable, at times and under safeguards agreed upon by the Allied Commission. It may not be feasible for local and provincial elections to be held simultaneously throughout the country. For example, firm registers may be established sooner in some areas than in others and relocation of populations may be completed more rapidly in some areas than in others.

E. Nationalization of Industry and Other Property

1. All industrial and other property seized by the Allied Commission from the Germans and from Austrian Nazis, or taken into custody for any other reason, should (except in the case of property needed for the use of the occupying forces and subject to restitution) be held in trust for the future Austrian Government, to be restored by the latter to the former private owners, retained with compensation to the owners, or otherwise disposed of, as that Government may decide.

80. This letter and the enclosed memorandum were transmitted as enclosures to Mr. Erhardt’s letter of March 24 (not printed) to the Director of the Office of European Affairs (Matthews).
81. Not printed.
82. Mediterranean Theater of Operations, U.S. Army Directives, i.e., policy directives prepared by the United States Group, Control Council—Austria; see despatch 6, April 23, from Caserta, p. 86.
83. See Conferences at Malta and Yalta, pp. 971, 978.