Office of the Historian

462.00R/2–546: Telegram

The Secretary of State to the Ambassador in the United Kingdom (Winant)

secret
niact
Washington, February 7, 1946—8 p.m.

1329. Position of Dept on appropriate next step re German assets Austria is set forth in our 778 to London of Jan 2438 and our 96 to Vienna of Feb 1, repeated to London as 1153. Considerations set forth below lead Dept to view that it would be inappropriate for US to approach Vishinsky39 at the present time reurtel 1408 of Feb 5.40

1.
On information available here USSR removals have virtually ceased. Decisive issue appears extent and nature of long run ownership interests that will arise from Potsdam provisions re German assets in Austria. British approach does not seem clear in this respect.
2.
Dept would, of course, be pleased if USSR would agree that removals to date have satisfied reparations claims and would waive further claims on German assets, including alleged ownership rights to oil, Danube shipping etc. We have no objection to its presentation to Vishinsky by British.
3.
In particular Dept believes Vienna negotiation will determine: [Page 304]
a.
the extent of USSR and possible other permanent foreign ownership interests that will result from the Potsdam provisions re German assets in Austria;
b.
the status of such ownership interests; ie., whether they assume the status of official foreign government interests or are derated to something approximating the pre-war status of private foreign interests;
c.
above all, the extent of Austrian freedom of action in controlling the resources within borders, including foreign exchange, regardless of extent of foreign ownership.
It is US intention to insist on application forced transfer clause which will limit permanent foreign ownership rights in Austria, to press for non-governmental status for any rights which do emerge from negotiation and for maximum freedom of action for Austrian government in management of economy.
4.
USSR actions appear firmly to indicate intention to translate Potsdam provisions into permanent ownership interests in oil, Danube shipping, and possibly other basic Austrian economic institutions in a manner similar to that being followed in Hungary and other East European countries. There are some indications that the French may have similar interests (see 230 to Dept from Paris of Jan 15 repeated to London as 3041), as well as some intention to carry out removals.
5.
Dept is convinced that the opening for discussion and negotiation afforded by the Byrnes–Molotov exchange should be exploited and that the Allied Commission Vienna is the appropriate forum for such discussion. We anticipate further approach on a governmental level to cover issues not within Molotov formula or to meet possible future difficulties, or stalemate in Vienna.
6.
In this matter Brit are in effect suggesting a change in Potsdam. The US has taken the position that Potsdam must be interpreted in the light of the Moscow Declaration on Austria and the United Nations Declaration on Forced Transfer. Dept believes that maintenance of US approach will prove the more effective in achieving the results in Austria towards which both US and UK aim.
7.
Question of US position on Austrian external assets now being considered. In general it is envisaged that Austrian assets will be sharply distinguished from German and will be available to Austria. We will inform you when position is fully formulated.

Sent to London as 1329, repeat[ed] for info to Vienna as 120, Moscow as 245 and Paris as 655.

Byrnes
  1. In this telegram the Department informed Ambassador Winant that it was “now inclined to explore the limits of the USSR position by raising specific significant cases, and to reserve further approach on a governmental level until such time as specific approach is proved to be inadequate or unsatisfactory.” (740.00119 EW/1–1846)↩
  2. Andrey Yanuaryevich Vyshinsky, Assistant People’s Commissar for Foreign Affairs of the Soviet Union.↩
  3. Not printed.↩
  4. Not printed.↩