863.6363/9–1445: Telegram

The United States Political Adviser for Austrian Affairs (Erhardt) to the Acting Secretary of State 87


PV 7431. The proposed Austrian-Soviet Agreement further developments, re my PV 7303, PV 7304 and P 2045, Sept. 8,88 given. Gruenther informed Zheltov on 8 Sept. that arrangements for long-term disposition of oil resources of Austria which Renner government was considering should be considered by Allied Council. An oral informal message delivered to State Secretary for Industry and Trade Heinl on Sept. 10 on behalf of General Clark stated any agreement for long-term disposition Austrian resources would unless examined by Allied Council be invalid. On lines of Department’s 100 of 9 Sept.,89 a letter was addressed to Koniev by Clark. Clark stated repeated reports had been received by him and his Government that Renner government was considering measures concerning partial control by Soviets of Austrian oil; indicated he would not agree to any action of Renner government disposing of resources without consulting him; referred to Article 5, Control Machinery Agreement; recalled that directly involved in ownership eastern Austrian oil properties were U.S. interests and that these interests had not been at Potsdam renounced.

No reply had been received up to 5 p.m. today from Koniev by General Clark.

Following has been learned from reliable outside source: Contract was presented on 10 Sept. to Renner by Soviet trade representatives [Page 592] after Renner was summoned to Soviet Headquarters. Saying that other Allied Powers should be consulted, Renner would not sign. Renner stated that a provisional government could not act on a long-term agreement affecting the whole of Austria. Becoming angry, Soviets stated contract of no concern to other powers and exerted strong pressure, threatening in particular to isolate Austria from Western Europe economically and also to refuse to accept proposed Austrian trade delegation in Moscow. On Sept. 11, Renner made following points in conversation with Clark and I.

Upon Potsdam Communiqué, Soviet demands were based. Renner agreed with us when we advanced arguments the Department set forth in its 100. In absence of formal U.S. statement on subject, however, Renner said Soviet interpretation to him seemed rather plausible;
Proposed contract would be advantageous to Austria;
He did not want to displease Western Allied Powers.

Negotiations were opened on a new contract when on Sept. 11, Soviets announced they would postpone return to Moscow. Because of their American bias, Doctors Janoschek90 and Friedl91 were barred from the discussions at Soviet demand. By Sept. 14, Soviet representatives demand Renner Government sign. Janoschek is an official in the half of Socony-Vacuum owned Rohöl-Gewinnungs AG. New contract contains provisions for 50–year concession same source reports and also provisions as follows for the $27,000,000 U.S. capital for the corporation.

From Austria, $1,000,000. in cash; $12,000,000. worth of new machines to be installed and half a million in oil lands.
From Russia, half a million in cash; former German properties worth $12,000,000.; and new installations worth $1,000,000.

Soviets maintain that oil law placed in effect in 194092 is still in effect. Same source reports also that transfers of American and other properties made under 1940 law still valid and on this basis under Potsdam agreement Soviets claim such properties.

That a contract which would endeavor to protect interests of the United States another source states Austrians are drawing up. Consumption estimated at 32,000,000 tons for 1945 and production at [Page 593] 40,000,000. Russia says no need of oil from Austria according to information available here.

No reply was forthcoming from Zheltov late on 12 Sept. when Gruenther called him and reiterated our position emphatically.

Kleinwächter said today he did not believe Renner would sign contract. He is Renner’s adviser on American affairs from the Foreign Office and came at my request to see me.

  1. Repeated to London for the Secretary as telegram 8016, September 14.
  2. None printed. PV 7303 and 7304 gave the text in unofficial translation of the proposed Austro-Soviet oil agreement. Regarding P 2045, see telegram 7749, September 9, 7 p.m., to London, p. 585.
  3. See footnote 78, p. 585.
  4. Dr. Robert Janoschek, chief geologist of Rohöl-Gewinnungs AG.
  5. Dr. Karl Friedl, 25 percent owner of Erdölproduktions–Ges. m. b. H., and chief geologist of the company.
  6. Presumably a reference to the German Bitumengesetz of August 31, 1938, which provided that all exploration rights which had not been utilized by the actual development of oil fields were to expire on July 31, 1940. Thereafter all exploration rights reverted to the German Government and could be disposed of only by it. Ownership of developed property was not disturbed, but existing companies lost the right of further exploration. The Bitumengesetz had not been abrogated by the Renner government.