740.00119 EW/l–946: Telegram

The Acting Secretary of State to the United States Political Adviser for Austria ( Erhardt )

secret

25. Following is text of correspondence between Byrnes and Molotov re German Assets in Austria.

“My dear Mr. Molotov: You will recall our recent conversation with regard to Austria10 and I understand that we are in agreement that we should instruct our representatives on the Allied Control Council for Austria to take up in the next session of the Council the question of the interpretation and application of paragraph 9 of the section on reparations agreed to at the Berlin Conference in so far [Page 290] as concerns German assets in Austria.11 I know that you will agree with me that the question is an important one and that we should take prompt action.”

“Secretary of State: On December 30 I received letter dated December 27 addressed by Molotov to the Secretary. Contents were as follows:

‘Dear Mr. Byrnes: In connection with your letter of December 26 in regard to German assets in Austria I recall that at the time of our conversation, you proposed to authorize the [representatives?] of our Governments in the Allied Council to make a study of the question of the interpretation and application of the Berlin Conference decisions, in particular paragraph 9 on reparations concerning German assets in eastern Austria. However, we did not have an opportunity to conclude this talk and to come to some common conclusion.

As you know, in accordance with the decisions [of?] the Berlin Conference, reparations are not collected from Austria but the zonal principle has been established for the extraction of German assets on reparations account. The above does not exclude, however, the possibility of consideration by the Allied Council of concrete cases of the origin of this or that kind of German assets in Austria, if their various portions are distributed in different zones of occupation of Austria and if their origin provokes doubt.

In accordance with this, the Soviet representative on the Allied Council in Austria will be given the necessary instructions in the event that concrete question of this sort may arise. With sincere respect.’”

You will note that Molotov agrees to concrete discussion within Control Commission of cases within that limited category of German assets which are distributed in different zones and where the origin of the assets provokes doubt.

We appreciate ambiguity of category of assets “distributed in different zones” and welcome your suggestions with respect to those types of assets which, in general, could, might, or could not fall within the category. We propose, further, that you promptly investigate and report possible specific cases which, in your judgment, could fall within this category.

It is our intention to exploit this limited opening and simultaneously to reaffirm our position, through diplomatic channels in Moscow, in the over-all settlement of the question of German assets in Austria set forth in our note of November 29, 1945, repeated to Vienna as 316.12

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In survey of possible cases for initial discussion, we suggest that, if feasible, you select those which involve:

(a)
unambiguous forced transfer to German ownership;
(b)
resources which, if retained, would be of significance to postwar Austrian economy; and/or
(c)
ownership rights which, if transferred to USSR would compromise independence of Austrian economic operations.

For purposes of formulating reply through diplomatic channels would you report as soon as possible within limits of information present state of USSR removals program. In general, to what extent and in which industries have removals taken place from Austria? Are removals still proceeding? If so, at what rate, in what industries?

With respect to oil would you report if any Austrian oil is presently being allocated to the Austrian civilian economy by USSR authorities or for export on Austrian behalf?

Sent to Vienna as 25, repeated for information to Moscow as 52, to London as 269, Paris as 137 and to Berlin as 69 for Angell No. 127.

Acheson