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

800.515/10–1545: Telegram

The Secretary of State to the Ambassador in the Soviet Union (Harriman)

Washington, October 15, 1945—3 p.m.

2162. After Quadripartite Financial Committee in Vienna had approved all details of projected conversion of Reichsmarks in Austria into AM schillings scheduled to begin Oct 15 Soviet representative on ACC insisted on Oct 4 that currency conversion be postponed. Subsequently, Marshal Koniev proposed in Oct 8 meeting of ACC direct conversion of Keichsmarks and AM schillings now circulating into Austrian national schillings. Koniev argued desirability of such program on ground that Allies are on eve of recognizing Austrian Provisional Govt hence conversion into AM schillings has “lost its meaning” and Austria should be permitted to have its own national currency.⁴⁸

You are requested to impress the Soviet authorities with this Govt’s concern with developing situation. Objective of proposed conversion into AM schillings was to effect immediate separation of Austrian currency system from that of Germany as necessary concomitant to Austrian independence from Germany. Conversion would also permit regularization of Austrian currency situation pending eventual conversion into indigenous Austrian currency. Possibility that Austrian Govt may be recognized by Occupying Powers does not reduce the importance of these considerations. This Govt agrees with position taken by Soviet representative in ACC that Austria should have own national currency and does not expect that AM schillings will be maintained in circulation indefinitely. However, conversion directly into Austrian national schillings not possible for extended period during which feared that heavy movement of Reichsmarks into Austria will continue thus blocking effective financial reconstruction. In view these considerations this Govt urges that Soviet accept plan for immediate conversion already agreed upon.⁴⁹

For your info USACA⁵⁰ estimates last practicable date for beginning conversion into AM schillings is about Nov 5 owing to scheduled Austrian elections in later Nov and subsequent winter weather which will impede necessary transport and communications.

Repeated to AmPolAd, Vienna as 185.

Byrnes

48. This information had been reported to the Department in telegram 309 from the Political Adviser in Vienna, October 9. In the same telegram the Department was also informed that U.S. financial authorities in Austria felt that because of the inability of the Austrian Provisional Government to print currency rapidly enough there would be an insufficient stock of Austrian notes available to cover Allied expenditures if conversion directly into Austrian schillings were undertaken. Such direct conversion would run the risk of being excessively deflationary and might lead to failure unless it were delayed an undesirably long period. Accordingly Mr. Erhardt intended to continue to press for conversion into Allied Military schillings prior to conversion into Austrian national schillings. (863.51/10–945)
49. Telegram 3578, October 17, from Moscow, informed the Department that a letter had been sent on October 16 to Assistant Commissar for Foreign Affairs Vyshinsky requesting that the conversion program already agreed upon be carried out (863.51/10–1745).
50. United States Element, Allied Commission in Austria.