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

740.00119 Control (Austria)/11–1145: Telegram

The United States Military Commissioner for Austria (Clark) to the Joint Chiefs of Staff ⁹⁰

Vienna, November 11, 1945.

P 5538. Allied Council meeting held 10, Nov. General relations good. Evident Russians operating under Moscow orders on currency conversion and reservation of governmental powers. On basis of conversation today with Koniev I feel more hopeful of satisfactory agreement on currency conversion. Koniev expressed hope I was not serious about conversion by zones.⁹¹ I assured him I was unless he would be reasonable. Koniev will report our conversation to his Government and hopes for favorable instructions by middle of next week. Koniev expressed personal agreement in general with following principles insisted upon by US, British and French elements and accepted by Austrians.

a. Conversion of reichsmark and Allied Military schilling notes above five reichsmarks or five schillings into Austrial National schillings to begin 10 Dec.

b. Allocation of 2,500,000,000 schillings for civilian needs at outset of conversion, to be supplemented by proportion of current note production in weeks immediately following until total of 3,300,000,000 schillings for civilian needs is reached.

c. Military needs to be taken from balance of estimated stock of 4,500,000,000 schillings expected to be available in Dec if allocation among four powers to be on reasonable basis.

d. If 4,000,000,000 not then available allocation for civilian needs will not be reduced below initial 2,500,000,000 considered minimum necessary for Austrian economy.

e. In deciding on amount and nature of blocking necessary we should take advice of Austrians and in any case include a clause giving Austrians discretion in releasing stringency of blocking measures.

On question of governmental powers reserved by Allied Council each member stated he had consulted his Government and still maintained the position he had taken at 30 Oct meeting, reported in my P 4752,⁹² that is, Koniev insisted on points 1 and 6 as they stand in para 2 therein,⁹³ other powers would not accept either of them with exception clauses therein.

I asked Koniev whether I was to understand he wanted unilateral action on important things like trade and financial relations with which each agreement charges Allied Council. He argued his formula did not do this saying Council had recognized Renner government de facto and USSR had done so de jure. I pointed out this meant recognizing supreme authority in Renner government rather than in Council. He merely referred to 20 Oct letter to Renner.

In discussion of practical effects of unilateral versus joint action he digressed to Potsdam agreement “by which Soviet Government was given right to all German assets in Eastern Austria”, saying that any differences about its meaning were for settlement between governments and not by Allied Council.

I pointed out I was discussing methods not substance and suggested political advisors with DRAA [withdraw?] to try to reword proposal. When they were unable to agree I suggested we may have been mistaken in trying to list specific powers to be reserved and that we had perhaps better drop the attempt and try a new approach based upon fact Allied Council is supreme authority and specific reservations therefore unnecessary. This threw consternation into Soviet group which then began pressing for immediate adoption of the first five points leaving sixth to later consideration.

We decided to let political advisors reconsider whole question for special meeting of Council on Friday next.

Before adjourning I announced that my Government will designate Erhardt as political representative to the Austrian Government and receive a political representative of it in Washington. McCreery made similar statement about Mack. Unfortunately Koniev seized this opportunity to say our action paralleled theirs and there was therefore no longer any reason not to agree with their formula for representation. I stressed that this was in no way to circumvent Council, that Erhardt would continue to sit beside me as my political advisor and that Austro-American affairs would continue to be handled through the Council as heretofore.

In addition Allied Council approved:

(1) 119 decrees of Renner Government found unobjectionable by all powers and five decrees with certain amendments;

(2) Disposal of war material according to Berlin agreement;

(3) Quadripartite censorship of civilian communications in Vienna;

(4) Acceptance of military missions from Czechoslovakia and Yugoslavia under article 12 each [EAC] agreement;^93a

(5) Asking respective governments to make representations to Yugoslavia, Hungary and Czechoslovakia concerning expelling Germans into Austria and letter to German Control Council on repatriation Reichsdeutsche and disposal of Sudetens and other Volksdeutsche.

90. This telegram was also sent for information to the Secretary of State.
91. See footnote 77, p. 644.
92. See footnote 80, p. 646.
93. Same as points enumerated in telegram 404, October 31, from Vienna, p. 644.
94. For text of European Advisory Commission Agreement on Control Machinery in Austria, see Conference of Berlin (Potsdam), vol. i, p. 351.