740.00119 Control (Austria)/10–2645
The United States Political Adviser for Austrian Affairs (Erhardt) to the Secretary of State
Sir: I have the honor to report that on October 22 I called on Dr. Karl Renner by appointment at his villa. I told him I was happy to be able at last to make an official call, and in reply he expressed his pleasure that since the Provisional Government had been recognized by the four powers it was possible for him to talk officially with all of the Political Advisers.
Our conversation touched first upon the Soviet request for an exchange of diplomatic representatives. In this connection, I have the honor to refer to my telegrams no. 376 of October 2376a and no. 394 of October 26. Dr. Renner stated that after the close of the Allied Council meeting on October 20, Mr. Kiselev76b had asked him to call a meeting of the Austrian Cabinet that same evening, and had later added that Marshal Koniev wished to arrange an exchange of diplomatic representatives. Dr. Renner, after objecting that more time would be needed, had finally agreed to call a cabinet meeting for October 22. Mr. Kiselev had asked that the Soviet Government be notified at once of the name of the man who was to be the Austrian diplomatic representative. Dr. Renner had replied by asking who the Soviet representative in Vienna would be, whereupon Mr. Kiselev had explained laughing that he was not authorized to discuss that question.
[Page 642]Dr. Renner said it was realized at the meeting of the Austrian Cabinet on October 22 that the Provisional Government was in a difficult position. He explained that he had angered the Russians by his refusal to sign the Soviet-Austrian oil agreement, and that it would therefore be especially embarrassing to persist in denying the Soviet request for an exchange of diplomatic representatives. The Cabinet was unable to agree upon an appointment since the number of suitable candidates for diplomatic representation abroad is very limited, but it was conceded that the Soviet request could not be denied.
In the conversation, which is the subject of this despatch, Dr. Renner voiced his opinion that the Soviets did not expect a Communist party member to be appointed. Moreover, as stated in my telegram no. 394 of October 26, reports have since reached me that Marshal Koniev has indicated a preference for a non-Communist and that Dr. Renner is giving favorable consideration to the appointment of General Julius Deutsch.
In the course of our discussion I indicated to Dr. Renner that I did not consider it necessary to have diplomatic representatives at this time, that consular or trade missions abroad would be more appropriate for the present, and that in any event the matter should be referred to the Allied Council for decision. Dr. Renner agreed, but said that in view of all the circumstances he would have to meet the Soviet request. I asked Dr. Renner if I could bring the subject to the attention of General Clark officially, and he replied that that would place him in an embarrassing position with the Soviet authorities. He finally stated that he would announce in the press the names of several men who were under consideration for the Moscow appointment, and that he hoped we would then take some action on the matter.
In reply to a question as to possible Austrian representation in the Balkan countries, Dr. Renner said he thought it would actually be more useful for Austria to have representation there than in the countries whose forces were occupying Austria. However, he added that trade representatives or consuls general would be more appropriate than diplomatic officers. I pointed out that it would place the Provisional Government in a difficult position if it were asked to send diplomatic representatives to countries whose governments had not been recognized by two of the occupying powers. He agreed that this would be an embarrassing position for his Government.
The conversation then turned to the proposed Soviet-Austrian oil agreement. Dr. Renner reported that he had had a meeting recently with Marshal Koniev at which this subject was discussed. The Marshal had adopted a serious tone and spoken sharply of Dr. Renner’s failure to sign the agreement in September, pointing out that the Provisional Government had had an opportunity then to secure a 50 per cent interest in the oil industry in Austria but had listened to advice [Page 643] from other countries with the result that Austria lost control of the industry entirely. Nevertheless Dr. Renner seemed to expect (as others do) that negotiations would probably soon be resumed by the Soviets looking toward the execution of an agreement.
In seeking to justify his action in rejecting the Soviet proposals, Dr. Renner explained to me that he had not been motivated merely by a desire to protect American, British, and Canadian oil interests, since it was not Austria’s task to become involved in a conflict with the Soviets over such a matter. Instead, his principal reason, he said, had been that the Soviets were demanding oil rights not only in Zistersdorf but in all parts of Austria, including the Western provinces, and that prior to the Laender Conference he had had no authority to dispose of resources located there.
Dr. Renner then mentioned that in his opinion the Soviets would soon demand a half interest in Danube shipping, an industry of great importance to Austria.
The question of the delayed currency conversion was also discussed briefly. Dr. Renner declared it was a catastrophe for Austria to be unable to secure the withdrawal of Reichsmarks without delay. He had tried to understand the Soviets’ last-minute disapproval of the agreed conversion plan, and had come to the conclusion that there were only two important reasons which might account for their attitude: (1) the Soviets were in possession of large supplies of Reichsmarks obtained in Germany, and which they wished their troops to be able to spend freely in Austria, and (2) if the proposed conversion were carried out each Allied Commander would have to obtain from the Austrian authorities currency to meet his military requirements, with the result that it would be brought to light that the Soviet forces were spending a great deal more in Austria than the other Allied forces. After mentioning some of our estimates on this subject, I observed that the Soviet forces perhaps paid in Allied Military Schillings for many goods which the other Allied forces were simply requisitioning without payment. He replied that this was not the case, and that in the last three weeks the Soviets had not paid for anything. He appreciated that the Soviet soldiers were not very well provided for, and so robberies appeared to be increasing rather than decreasing.
During the conversation, Dr. Renner expressed his great anxiety over the fact that Austria was one of the areas where a conflict between the USSR and Great Britain was taking place. He hoped that the United States as a disinterested power would be able to help and support his country in this dangerous situation.
On leaving, I remarked to Dr. Renner that my Government hoped that Austria could develop in a way which would make it free from political domination, and if possible free from economic domination, [Page 644] by any country. Referring to the possible exchange of diplomatic representatives, I pointed out that such a development would tend to reduce the influence of the Allied military forces in Austria and of the Allied Commission.
Respectfully yours,