740.00119 EW/2–146: Telegram

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

secret

96. Following is tentative view of Dept for your urgent comment on appropriate next stage of action concerning German assets in Austria, reurtels 117 of Jan 25 and 131 of Jan 28.32

1.
We intend, in the near future, to take up this question again in Moscow and with other Governments. We envisage, however, that specific cases be taken up in Vienna promptly, as indicated below.
2.
We suggest that the Allied Commission set up immediately adequate machinery for prompt and efficient dealing with specific cases within framework agreed by Molotov. U. S. representative may wish to express view that while we regard this framework as inadequate to settle all outstanding issues, we are anxious to begin settlement of the problem in interests of Allied cooperation and Austrian economy and trust that treatment of particular problems will develop agreement on principles which will be of wider applicability. U. S. Government further regards the issue as one in which all the Occupying powers, and Europe as a whole, have a large and legitimate interest and hopes negotiations will prove ability of Allies to disentangle consequences of German aggression in a manner consistent with the independence [Page 301] of Austria, the various national interests, and the overall interest of Europe.
3.
We suggest, on the limited data available here, that the DDSG case would make a useful beginning, for the following reasons:
a)
it apparently involves forced transfer after Anschluss, before outbreak of war, and should therefore generate a useful definition of a “German asset” in terms of Forced Transfer Declaration;
b)
it raises issue of accretion to capital value, and the appropriate disposal of such accretion;
c)
it raises question of treatment of such payment as Germans did make in the course of forced transfer; in this instance 30 percent of par value of stock, on our evidence;
d)
it raises question of treatment of Credit Anstalt,33 pre Anschluss shareholder in DDSG, and thereby the treatment of banks and insurance companies that were nazified;
e)
it raises question of appropriate form of post-war organization for major Austrian national assets; and the role, if any, of foreign ownership interests;
f)
it raises question of unified treatment of Danube within Austria, and may well raise question long run representation on Danube control if Allied Commission seeks temporary representation.
g)
it concerns an issue; namely, transport on the Danube, of obvious immediate importance to Austrian and European economic revival;
h)
the physical possession by the U. S. Army of about 300 Austrian barges gives us special status and interest in this matter.
4.
On our limited evidence the issues of principle involved in the DDSG case should generate common law applicable to virtually all the problems of German assets in Austria, with the exception of certain aspects of the oil question. We shall raise this question on governmental level should conditions not permit treatment in Allied Commission.
5.
Our 316 of Nov 2934 appears to cover US principles for initial negotiation position, with exception issues b) and c) above, on which we request your views. We will shortly forward our reaction to British and French positions, and would appreciate any comments you may care to make.
6.
Subject to your agreement would you proceed urgently to collection of facts and formulation of DDSG case.

Sent to Vienna as 96, repeat[ed] to London as 1153, Paris as 543, Moscow as 206 and Berlin as 311, for info.

Byrnes
  1. Neither printed. In telegram 117 of January 25 (863.6363/1–2546) Gray reported that the Soviets refused to make available figures of oil production or refinery output but that the mission had fairly accurate estimates. He also stated that he and General Clark considered it most important that the whole subject of German assets be pressed at governmental level without delay. In telegram 131 of January 28 (740.00119 EW/1–2846) Erhardt reported that the British representative “has received word informally from London that whole question of German assets in Austria is now being considered at governmental level on new basis and that until decision has been reached there UK Government would prefer not to have subject discussed in ACA unless there is reason to believe a complete overall solution would result.” Erhardt also stated “that the category of concrete cases which Soviets are wiling to discuss is limited to cases where doubt arises as to origin and where the property is located in two or more zones.”
  2. A major Austrian bank.
  3. Same as telegram 10380, November 29, 1945, to London; for text, see Foreign Relations, 1945, vol. iii, p. 668.